The Union Cabinet on Wednesday approved the formation of National Land Monetization Corporation (NLMC) as a wholly owned Government of India company to fast-track monetization of land and non-core assets of public sector entities. For setting up the NLMC, the Center allocated an initial authorized share capital of Rs 5,000 crore and a paid-up share capital of Rs 150 crore.
National Land Monetization Corporation will monetize surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other government agencies. So far, CPSEs have taken 3,400 acres of land for monetization from CPSEs including Bharat Sanchar Nigam Limited (BSNL), Mahanagar Telephone Nigam Limited (MTNL), B&R, Bharat Petroleum Corporation Limited (BPCL), BEML Limited and other non-core assets. referred to. , HMT Ltd., among others, have been mentioned in the Eco Survey.
National Land Monetization Corporation: How it will work
Monetization of non-core assets is envisaged to unlock the value of hitherto untapped or underutilized assets and generate returns on the equity that the government has invested in them. As per previous reports, the new entity will act as an asset manager for land owned by the central government and central public sector enterprises. There will be a Chief Executive Officer (CEO) and a technical team to facilitate land monetization. The report suggested that the corporation would be allowed to raise capital from the equity market based on the value of its leased assets. The corporation will have members from the Ministry of Finance, Department of Public Enterprises, senior officials from the Ministry of Housing and Urban Affairs and independent directors from the finance, real estate industry.
Sharing a glimpse of the central government’s asset monetization plan, the Economic Survey 2022 said, “The central government has a total monetization potential of Rs 6 lakh crore through core assets over a period of four years from 2021-22 to 2024-25. . “The top five sectors, including roads, railways, power, oil and gas pipelines and telecommunications, account for about 83 per cent of the total value.
National Land Monetization Corporation: The Next Big Reform?
During Budget 2021, Finance Minister Nirmala Sitharaman proposed to create a Special Purpose Vehicle (SPV). “Monetization of land can be done either through direct sale or concession or similar. It requires special qualifications and for this purpose,” the Finance Minister had said earlier while proposing the new corporation.
The SPV is likely to work on a fee-based model and may become a permanent entity to monetize the land on a regular basis. According to reports. “The next 5-10 years will turn out to be a big deal, as we have not yet started the valuation of the land that we have. And a lot of land can be used for urban renewal.. and good strategic land can be made available,” Tuhin Kanta Pandey, Department of Investment and Public Asset Management (DIPAM) secretary told earlier.
As per the report, the corporation will also develop concession agreements for land development and sale, legal management of litigation/barriers, development planning, design and bidding process management.
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