Union Cabinet Approves National Land Monetisation Corporation

The Union Cabinet has approved the establishment of the National Land Monetisation Corporation (NLMC) as a wholly-owned government of India company to expedite the monetization of public sector land and non-core assets. The Centre provided an initial authorized share capital of Rs 5,000 crore and a paid-up share capital of Rs 150 crore for the establishment of NLMC.

Surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other government entities will be monetized by the National Land Monetisation Corporation. According to the Eco Survey, CPSEs such as Bharat Sanchar Nigam Limited (BSNL), Mahanagar Telephone Nigam Limited (MTNL), B&R, Bharat Petroleum Corporation Limited (BPCL), BEML Limited, and HMT Ltd have referred 3,400 acres of land and other non-core assets for monetization.

NLMC: How it Will Work?

The goal of monetizing non-core assets is to unlock the value of these assets that have been sitting idle or underutilized, as well as to produce returns on the equity that the government has invested in them.

According to prior reports, the new firm will serve as an asset manager for lands controlled by the Union government and central public sector enterprises. Land monetization will be facilitated by a chief executive officer (CEO) and a technological team.

According to the article, the firm will be able to raise funds from the equity market based on the worth of its leased assets. Members of the company will include top officials from the finance ministry, the department of public enterprises, the ministry of housing and urban affairs, and independent directors from the financial and real estate industries.

Big Land Reform

Finance Minister Nirmala Sitharaman advocated the formation of a special purpose vehicle (SPV) in Budget 2021. "Land can be monetized through direct sale, concession, or other comparable methods. This necessitates particular competencies, and for this reason," the finance minister had previously stated while proposing the new corporation.

SPV will most likely operate on a fee-based model and could eventually become a permanent company that will be used to monetize land on a regular basis. according to the news "The next 5-10 years will be a huge deal since we haven't started valuing the land we have yet." And a lot of lands might be used for urban renewal...and good strategic land may be made available," said Tuhin Kanta Pandey, the secretary of the Department of Investment and Public Asset Management (DIPAM).

According to sources, the corporation will also establish land development and sale concession agreements, legal administration of litigation/encumbrances, development planning, design, and bid process management.