While land acquisition is still acting as a hurdle for private sector investments and infrastructure creation, the Centre’s ambitious land monetisation will likely gather steam only after the May 2024 general elections.
Even though the Cabinet gave its nod in March 2022 for setting up of a dedicated National Land Monetisation Corporation (NLMC) for monetisation of surplus land and building assets of central public sector enterprises (CPSEs) and other government agencies, the entity is still lacking the requisite manpower; it doesn’t have a full-time CEO yet. The NLMC was announced in the finance minister’s Budget speech on February 1, 2021.
Monetisation of several lakh acres of the land pool with various central government agencies is expected to give a fillip to the Rs 111-trillion National Infrastructure Pipeline (NIP) in five years through FY25 and Gati Shakti connectivity projects, as well as the housing sector.
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“The delay in fully operationalising the NLMC with a full-time CEO and chairman means any meaningful land monetisation would happen after the next general elections,” an official said.
The NLMC, with a seed capital of Rs 150 crore, was incorporated in June 2022 as a wholly-owned government company. The entity will likely have a CEO from the government sector and a chairman from the private sector. A search and selection committee headed by the Cabinet secretary is still in the process of finding suitable candidates for the top two posts.
Currently, Sanjay Kumar Jain, joint secretary in the department of public enterprises (DPE), is holding the charge of the NLMC’s CEO. The DPE is the administrative ministry for the NLMC.
In December, the NLMC hired four people including two consultants and two young professionals.
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Since the desired skill in the monetisation of non-core assets in government is limited, the NLMC would carry out monetisation of the land and other non-core assets of CPSEs/departmental arms in line with international best practices. The lean organisation will recruit about three dozen staff for the special purpose vehicle drawn from government officials and eminent professionals in the field of real estate, banking, investment banking, construction, legal and other related fields.
The CPSEs, departments and ministries are eagerly looking forward to the full operationalisation of the entity.
The NLMC will likely get about 5,000 acres of land for monetisation from a clutch of sick CPSEs i.e., MTNL, BSNL, BPCL, B&R, BEML, HMT and Instrumentation Ltd, among others, in urban and semi-urban areas.
The defence ministry might take the help of the NLMC to monetise about 32,000 acres of land belonging to military farms, abandoned airfields and camping sites, grounds and encroached land.
The Centre through the Salt Commissioner’s Organisation could monetise about 20,000 acres of salt pan land in spread across many states including Maharashtra, Gujarat and Karnataka.
Railway land development is a key component of Gati Shakti, an initiative launched with the aim of coordinating infrastructure projects across all key infrastructure ministries, for the planning as well as execution of national infrastructure projects including all state governments.
Among the civilian government agencies, the railways is the largest landholder with 1.134 million acres. Of these, about 100,000 acres were vacant land. It might rope in the NLMC to accelerate the pace of commercial exploitation of land utilisation.
While the government sold enemy shares worth about Rs 2,800 crore in FY19-FY20, it is still saddled with immovable property worth Rs 1 trillion in land and buildings. Of these, lakhs of acres of land is spread over India, which is to be made available for public and private sector projects.