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Proposal to set up National Land Management Corporation

  • Category
    Economy
  • Published
    18th Jun, 2020

A government panel on boosting infrastructure investment has recommended setting up a National Land Management Corporation, which would help in monetising state-owned surplus land assets in a systematic and specialised way.

Context

A government panel on boosting infrastructure investment has recommended setting up a National Land Management Corporation, which would help in monetising state-owned surplus land assets in a systematic and specialised way.

About

About National Land Management Corporation

  • The proposed Corporation will identify and manage surplus land assets.
  • Such a corporation should be set up under Companies Act to function as the facilitator for land monetisation and an asset manager for lands owned by government of India and Central Public Sector Enterprises.
  • The Corporation can raise capital from the equity market, based on the value of its leased assets, just like it has been done recently by some private-owned Real Estate Investment Trusts (REITS).
  • The Corporation should have representation from: 
    • Finance Ministry 
    • Department of Public Enterprises
    • Ministry of Housing and Urban Affairs 
    • Independent directors from finance and real estate industry

The need

  • India’s public land holdings are one of government’s most significant tangible assets, whether in the hands of central ministries, state governments, or local bodies.
  • In a rapidly modernizing and urbanizing society such as India’s, managing public lands represents an opportunity to respond to these urgent needs.
  • A more proactive management of public land assets should be part of a strategy for managing its balance sheet in the public interest.
  • There is a need for a separate organisation, which can work with various government departments including Railways and Defence Ministry to utilise their surplus land assets.

What is National Infrastructure Pipeline?

  • It is estimated that Indian economy would need to spend$4.5 trillion on infrastructure by the year 2030 to sustain its growth rate.
  • The eneavour of the National Infrastructure Pipeline or NIP, is to make this happen in an efficient manner.
  • The new pipeline consists of 39 per cent projects each by the Centre and states and the balance by 22 per cent by private sector.
  • Significance-
    • Economy: Well-planned NIP will enable more infra projects, grow business, create jobs, improve ease of living and provide equitable access to infrastructure for all, making growth more inclusive.
    • Government: Well-developed infrastructure enhances level of level of economic activity, creates additional fiscal space by improving revenue base of the government, and ensures quality of expenditure focused in productive areas.
    • Developers: Provides better view of project supply, provides time to be better prepared for project bidding, reduces aggressive bids/ failure in project delivery, ensures enhanced access to sources of finance as result of increased investor confidence.
    • Banks/financial institutions (F1s)/investors: Builds investors confidence as identified projects are likely to be better prprepared, exposures less likely to suffer stress given active project monitoring, thereby less likelihood of NPAs.

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