28 Mar National Land Monetization Corporation
National Land Monetization Corporation – Today Current Affairs
Recently, the Union Cabinet approved the setting up of the National Land Monetization Corporation (NLMC) to monetise surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other agencies linked to the Government.The proposal is in pursuance of the Budget Announcement for 2021-22.
Today Current Affairs
National Land Monetization corporation(NLMC )
- It is 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. NLMC is 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.
Composition: The Hindu Analysis
- 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 organisation with minimal full time staff, hired directly from the market on contract basis. Flexibility will be provided to the Board of NLMC to hire, pay and retain experienced professionals from the private sector.
Functions: The Hindu Analysis
- 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 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.
- 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.
- NLMC will have necessary technical expertise to professionally manage and monetize land assets on behalf of CPSEs and other Government agencies.
Benefits : The Hindu Analysis
- With monetization of non-core assets, the 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, monetization of these surplus land and non-core assets is important to unlock their value.
- NLMC will support and undertake monetization 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.
- Apart from the strategic sale and privatisation of state-owned companies, monetisation of idle land is part of the Centre’s strategy to reduce its business presence to a bare minimum and generate resources for future asset creation.
Challenges : The Hindu Analysis
- 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.
Today Current Affairs
- While privatisation of PSBs and PSUs has faced challenges, monetisation of idle government land requires specialised skills and expertise. This will be the job of the new agency.
- The monetisation of land can be through direct sale or concession, or by similar means. Under the process, the Government is essentially transferring revenue rights to private parties for a specified transaction period in return for upfront money, a revenue share, and commitment of investments in the assets.