New Delhi, March 9 (FN Agency) Seeking to monetise surplus land of state-owned companies, the Union cabinet on Wednesday approved a proposal to set up National Land Monetization Corporation (NLMC) as a special purpose vehicle (SPV) with an initial authorised share capital of Rs 5,000 crore and paid-up share capital of Rs 150 crore. “With monetisation of non-core assets, government would be able to generate substantial revenues by monetising unused and under-used assets,” a government statement said after Cabinet meeting.
Central public sector enterprises (CPSEs) currently hold considerable surplus, unused and under- used non-core assets in the nature of land and buildings. The government has said that monetisation of these surplus land and non-core assets is important to unlock value of CPSEs undergoing strategic disinvestment or closure. “NLMC will support and undertake monetisation of these assets. This will also enable productive utilisation of these under-utilised assets to trigger private sector investments, new economic activities, boost local economy and generate financial resources for economic and social infrastructure,” the statement said. As per the plan approved by the Cabinet, the Board of Directors of NLMC will comprise senior central government officers and eminent experts. The Chairman and non-government directors of the NLMC will be appointed through a merit-based selection process. NLMC will have flexibility to hire, pay and retain experienced professionals from the private sector. NLMC would 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,” said the statement. The proposed special purpose vehicle 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. “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 government in implementation of asset monetization programme,” said the government. Department of Public Enterprise (DPE) under Finance Ministry will set up NLMC and act as its administrative ministry.