The Centre has firmed up a plan to accelerate monetisation of surplus land parcels held by various wings of the government, including the defence department, railways, salt commissioner’s office and various Central Public sector Enterprises.
The move will complement its efforts to raise more non-debt receipts to expedite fixed asset creation in the economy through monetisation of brownfield assets sans ownership transfer under the National Monetisation Pipeline (NMP) scheme.
“Several government departments have already conveyed their willingness to the National Land Monetisation Corporation (NLMC) to offer their surplus lands for monetisation,” an official aware of the matter told FE.
NLMC, with a seed capital of
150 crore, was incorporated last week as a wholly-owned government company. The entity will have a CEO from the government and a chairman from the private sector, both of whom are likely to be appointed by June-end, the source said. A search and selection committee headed by Cabinet secretary is currently in the process of selecting the board members of NLMC. To start with, NLMC will likely get about 5,000 acres of land for monetisation from a clutch of sick CPSEs namely MTNL, BSNL, BPCL, B&R, BEML, HMT and Instrumentation, among others. These land parcels are located in urban as well as semi-urban areas, good parts of which prime property that could fetch a lot of value. The government also reckons that the land parcels to be made available to industries and commercial ventures via this route will spur private investments. Problems associated with land acquisition are a major hurdle for industries or infrastructure development. The land monetisation drive will make available tens of thousands of acres of land for development, giving a boost to111 trillion National Infrastructure Pipeline (NIP) and Gati Shakti connectivity projects as well as the housing sector, the source added.
To raise resources for capital expenditure requirements for defence forces, the defence ministry is looking forward to take the help of 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 Salt Commissioner’s Organisation, owns about 60,000 acres of salt pan land in Maharashtra, Gujarat, Karnataka, Tamil Nadu, Odisha, West Bengal, Haryana and Himachal Pradesh. About 20,000 acres of these land parcels are being offered for monetisation, the official said.
Railways land development is a key component of Gati Shakti, an initiative launched with 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 1.1 million acres with it. Of these, about 1,00,000 acres of land parcels are ‘vacant”, even though due to the largely linear nature of railway land, only a fraction of such vacant land may be conducive for commercial development. Railways has its own Rail Land Development Authority, tasked with mandate of land monetisation, but it has made limited headway. The railway ministry, the source said, wants to rope in NLMC to accelerate the pace of commercial exploitation of land utilisation.
While the government sold the so-called “enemy shares” worth about
2,800 crore in FY19-FY20, it is still saddled with immovable property worth1 trillion in land and buildings. Of these, thousands of acres of land is spread over India, another official said. With the entire proceeds from enemy properties accruing to the Centre, it wants the sale of such land at the earliest for the development of the country by making available such land for public and private sector projects.
The government had informed Lok Sabha on January 2, 2018, that a total 9,280 enemy properties had been left behind by Pakistani nationals, and 126 by Chinese nationals.
Immediately after the Narendra Modi government unveiled the
6 trillion NMP target for four years in August 2021, this ambitious project to boost the resources of the public sector got off to a quick start with1 trillion realisations in FY22.
Land monetisation 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 NIP and other capital-intensive ventures. The idea is to crowd in private investments in infrastructure development.
Since the desired skill in the monetisation of non-core assets in government is limited, the NLMC is being set up for monetisation of the land and other non-core assets of CPSEs/departmental arms in line with international best practices. The 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 related fields.