NATIONAL LAND MONETIZATION CORPORATION

Recently, the Union Cabinet has approved the setting up National Land Monetization Corporation (NLMC) as a wholly owned Government of India company.
The Finance Minister had announced plans to set up a special purpose vehicle for this purpose in the Union Budget 2021-22.
In August, 2021, the government of India launched the National Monetisation Pipeline (NMP).

National Land Monetization Corporation (NLMC)

NLMC will undertake surplus land asset monetisation as an agency function, and assist and provide technical advice to the Centre in this regard.
NLMC has been announced with an initial authorized share capital of Rs 5000 crore and paid-up share capital of Rs 150 crore.
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.
The new company, which will be set up under the administrative jurisdiction of the finance ministry.
NLMC will hire professionals from the private sector just as in the case of similar specialised government companies like the National Investment and Infrastructure Fund (NIIF) and Invest India.

Benefits:

This will enable productive utilization of under-utilized assets to trigger private sector investments, new economic activities, boost local economy and generate financial resources for economic and social infrastructure.
NLMC is also expected to own, hold, manage and monetize 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.

Challenges:

Among the key challenges that NLMC might face include lack of identifiable revenue streams in particular land assets, dispute resolution mechanism, various litigations and lack of clear titles, and low interest among investors in remote land parcels.
NLMC will undertake monetization of surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other Government agencies.
CPSEs are those companies in which the direct holding of the Central Government or other CPSEs is 51% or more.
At present, CPSEs hold considerable surplus, unused and under-used non-core assets in the nature of land and buildings.
NLMC 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 realization.
NLMC will act as a repository of best practices in land monetization, assist and provide technical advice to the Government in implementation of asset monetization programmes.

Way Forward

The success of the infrastructure expansion plan would depend on other stakeholders playing their due role.
These include State governments and their Public Sector Enterprises and the private sector.
In this context, the Fifteenth Finance Commission has recommended the setting up of a High-Powered Intergovernmental Group to re-examine the fiscal responsibility legislation of the Centre and States.

SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT

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