Cabinet nod to National Land Monetisation Corp for monetisation of surplus land

The Union Cabinet recently approved the setting up of a National Land Monetisation Corp (NLMC) to monetise surplus land and buildings of PSUs that are being sold off or are on the verge of closure, and government agencies. 

About National Land Monetisation Corp (NLMC):

• NLMC will be set up as a wholly-owned government of India Company with an initial authorized share capital of Rs 5,000 crore and paid-up share capital of Rs 150 crore.
• The NLMC board will comprise senior Government officers and eminent experts, while its chairman and non-Government directors will be appointed through a merit-based selection process.
• The Corporation will have 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.

How will NLMC function?

• NLMC will undertake monetization of surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other government agencies.
  • With monetization of non-core assets, the government would be able to generate substantial revenues by monetizing unused and under-used assets.
• NLMC will support and undertake monetization of these assets. For CPSEs undergoing strategic disinvestment or closure, monetization of these surplus land and non-core assets is important to unlock their value.
• NLMC will also enable productive utilisation 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 NLMC will own, hold, manage and monetise surplus land and building assets of CPSEs under closure and 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.
• NLMC will undertake surplus land asset monetisation as an agency function, and assist and provide technical advice to the Centre in this regard.
• NLMC will hire professionals from the private sector as in the case of similar entities like the National Investment and Infrastructure Fund (NIIF) and Invest India.
  • This is needed since real estate monetisation requires specialised skills and expertise in areas such as market research, legal due diligence, valuation, master planning, investment banking and land management.

Challenges:

Among the key challenges that NLMC might face include:

• lack of identifiable revenue streams in particular land assets
• dispute resolution mechanism
• various litigations
• lack of clear titles
• low interest among investors in remote land parcels