The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the setting up of the National Land Monetisation Corporation (NLMC) that will undertake the work of monetisation of surplus land and building assets of Central Public Sector Enterprises.
The NLMC will be set up as a wholly-owned Government of India company with an initial authorised share capital of Rs 5000 crore and paid-up share capital of Rs 150 crore.
It will undertake monetisation 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.
Going forward, the Department of Public Enterprise, Ministry of Finance, will set up the company and act as its administrative ministry, according to an official statement released after the cabinet meeting.
With monetisation 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, monetisation of these surplus land and non-core assets is important to unlock their value. NLMC will support and undertake monetisation of these assets," the Ministry of Finance said in a statement.
"This will also enable productive utilisation of these under-utilised assets to trigger private sector investments, new economic activities, boost the local economy and generate financial resources for economic and social infrastructure," it said.
The NLMC is also expected to own, hold, manage and monetise surplus land and building assets of CPSEs under closure and the surplus non-core land assets of Government-owned CPSEs under strategic disinvestment. This will speed up the closure process of CPSEs and smoothen the strategic disinvestment process of Government-owned CPSEs.
These assets may be transferred to NLMC to hold, manage and monetise.
It will also advise and support other Government entities (including CPSEs) in identifying their surplus non-core assets and monetizing them in a professional and efficient manner to generate maximum value realisation. In these cases (e.g., on-going CPSEs and listed CPSEs under strategic disinvestment), NLMC will undertake surplus land asset monetization as an agency function. It is expected that NLMC will act as a repository of best practices in land monetization, assist and provide technical advice to the Government in the implementation of the asset monetization programme.
The NLMC will have the necessary technical expertise to professionally manage and monetize land assets on behalf of CPSEs and other Government agencies. The Board of Directors of NLMC will comprise senior Central Government officers and eminent experts to enable professional operations and management of the company. The Chairman, non-Government Directors of the NLMC will be appointed through a merit-based selection process.
"NLMC will be a lean organization with minimal full-time staff, hired directly from the market on a contract basis. Flexibility will be provided to the Board of NLMC to hire, pay, and retain experienced professionals from the private sector," the Finance Ministry said.
( With inputs from ANI )
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