The government is setting up a wholly-owned firm — National Land Monetisation Corporation (NLMC) — with an initial authorised share capital of Rs 5,000 crore and subscribed share capital of Rs 150 crore, according to the Survey.
Since the desired skill on monetisation of non-core assets in the government is limited, finance minister Nirmala Sitharaman had announced in the Budget for 2021-22 that s special purpose vehicle (SPV) would be set up for monetisation of the land and other non-core assets of CPSEs/departmental arms in line with international best practices. However, the contours of the SPV are still awaited.
“So far, CPSEs have referred about 3,400 acres of land and other non-core assets to DIPAM/MoF for monetisation. Monetisation of non-core assets of different CPSEs i.e., MTNL, BSNL, BPCL, B&R, BEML, HMT Ltd, Instrumentation Ltd etc. is at present under various stages of the transaction,” the Survey noted.
Monetisation of non-core assets envisages unlocking of value of these thus far unutilised or underutilised assets and generate returns on equity that the government has invested in them. NLMC will likely be set up with a chairman from private sector and a CEO from the government, sources had told FE. The lean entity will likely have manpower of about two dozen drawn from the private sector as well as the government. The SPV, which will come under DPE, will help in de-linking process of closure of a CPSE from disposal of its immovable assets such as free-hold land to avoid any delay in closure of the loss-making entity.
Separately, on August 23 last year, the government had unveiled a National Monetisation Pipeline (NMP), seeking to generate upfront revenues of Rs 6 lakh crore in four years starting from FY22, out of operational infrastructure projects, under various innovative log-term lease plans that involve minimal ceding of government’s ownership of the assets. The move is in step with a plan to revert to the path of fiscal consolidation without any lapse of time and create the fiscal heft to finance the Rs 111 lakh crore National Infrastructure Pipeline (FY21-25)and other capital-intensive ventures.