NATIONAL LAND MONETIZATION CORPORATION

The Union Cabinet Approved The Setting Up NLMC

    The Union Cabinet, chaired by Prime Minister Shri Narendra Modi has approved the setting up National Land Monetization Corporation (NLMC) as a wholly owned Government of India company with an initial authorized share capital of Rs 5000 crore and paid-up share capital of Rs 150 crore. NLMC will undertake monetization of surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other Government agencies. The proposal is in pursuance of the Budget Announcement for 2021-22. With monetization of non-core assets, Government would be able to generate substantial revenues by monetizing unused and under-used assets.

     At present, CPSEs hold considerable surplus, unused and under used non-core assets in the nature of land and buildings. For CPSEs undergoing strategic disinvestment or closure, monetization of these surplus land and non-core assets is important to unlock their value. NLMC will support and undertake monetization of these assets. This will also enable productive utilization of these under-utilized assets to trigger private sector investments, new economic activities, boost local economy and generate financial resources for economic and social infrastructure.

     The Economic Survey for 2021-22, tabled in Parliament in January 2022, had noted that the desired skill set to take on the responsibility of management and monetisation of the government's non-core assets was "limited" at present, with CPSEs having referred around 3,400 acres of land and other non-core assets for monetisation. Given the expertise needed to sell the assets, NLMC will comprise professionals from the private sector, similar to other specialised government companies like National Investment and Infrastructure Fund and Invest India. 

     NLMC will be a lean organisation with minimal full-time staff, hired directly from the market on contract basis.  Flexibility will be provided to the Board of NLMC to hire, pay and retain experienced professionals from the private sector. NLMC's board will include senior central government officers and eminent experts, with the chairman and non-government directors appointed via a merit-based selection process. In addition to selling surplus land and buildings, NLMC will also own and manage these surplus assets of CPSEs under closure and the surplus non-core land assets of government-owned CPSEs under strategic disinvestment.

      So far, CPSEs have referred around 3,400 acres of land and other non-core assets to the Department of Investment and Public Asset Management (DIPAM) for monetisation. Monetisation of non-core assets of MTNL, BSNL, BPCL, BEML, HMT, is currently at various stages of the transaction, as per latest data in the Economic Survey 2021-22. BEML, for instance, has identified surplus land in Karnataka — around 123.39 acres in Bangalore and 401.23 acre in Mysore — which will be demerged and subsequently monetised during the strategic disinvestment process. HMT Limited which is under closure, has also earmarked land of around 89.506 acre in Bangalore for monetisation.

           The Rail and Defence ministries are the biggest government land-owners in the country. According to available Government data, the total land available with the Railways is 4.78 lakh hectares (11.80 lakh acres) of which 4.27 lakh hectares is under operational and allied usage while around 0.51 lakh hectare (1.25 lakh acres) is vacant.The Defence Ministry, the biggest land-owner, has about 17.95 lakh acres of which around 1.6 lakh acres is within the 62 cantonments, and about 16.35 lakh acres outside their boundaries, according to data from the Directorate General, Defence Estates.

   According to the Government statement issued, monetisation of land can be through direct sale or concession, or by similar means. Under the process, the Government is essentially transferring revenue rights to private parties for a specified transaction period in return for upfront money, a revenue share, and commitment of investments in the assets. While privatisation of PSBs and PSUs has faced challenges, monetisation of idle government land requires specialised skills and expertise. This will be the job of the new agency.