Union Cabinet on Wednesday has approved the formation of National Land Monetization Corporation (NLMC) as a wholly owned government of India company to fast track the monetisation of land and non-core assets of public sector entities. For setting up NLMC, the Centre allocated an initial authorised share capital of Rs 5,000 crore and paid-up share capital of Rs 150 crore.
National Land Monetization Corporation will undertake monetisation of surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other Government agencies. So far, the CPSEs have referred 3,400 acres of land and other non-core assets for monetisation from CPSEs comprising Bharat Sanchar Nigam Limited (BSNL), Mahanagar Telephone Nigam Limited (MTNL), B&R, Bharat Petroleum Corporation Limited (BPCL), BEML Limited, HMT Ltd among others.
National Land Monetization Corporation: How it Will Work
The new entity will work as an asset manager for lands owned by the Union government and central public sector enterprises, according to previous reports. There will be a chief executive officer (CEO) and a technical team to facilitate land monetisation. The corporation will be allowed to raise capital from the equity market, based on the value of its leased assets, the report suggested. There will members from senior officials of the finance ministry, department of public enterprises, ministry of housing and urban affairs and independent directors from finance, real estate industry in the corporation.
Sharing a glimpse of central government’s asset monetisation plan, the Economic Survey 2022 said, “There is an aggregate monetisation potential of Rs 6 lakh crore through core assets of the central government over a four-year period from 2021-22 to 2024-25.”
National Land Monetization Corporation: The Next Big Reform?
During Budget 2021, finance minister Nirmala Sitharaman proposed to form an special purpose vehicle (SPV). “Monetising of land can either be by way of direct sale or concession or by similar means. This requires special abilities and for this purpose,” finance minister had earlier said while proposing the new corporation.
The SPV is likely to operate on the fee-based model and may become a permanent entity to monetise land on regular basis. according to reports. “I think that value can be discovered and unlocked if we demerge some land assets and actually look at it as a real estate, rather than as a part of an operating company,” department of investment and public asset management (DIPAM) secretary Tuhin Kanta Pandey earlier told.
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