Union Cabinet approves setting up of National Land Monetization Corporation for undertaking surplus land monetization

14 Mar,22 2:10 pm
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National Land Monetisation Corporation (NLMC): The Union Cabinet has approved the setting up National Land Monetization Corporation (NLMC) for undertaking the surplus land monetization.

Key Points:

  • NLMC will be set up as a wholly owned Government of India (GoI) company.
  • It will be set up under the finance ministry’s administrative control.
  • It will be a lean organization with few full-time employees hired on a contract basis from the market.
  • The NLMC will have an initial authorized share capital of Rs 5000 crore and paid-up share capital of Rs 150 crore.
  • It will undertake monetization of surplus land and building assets of ‘Central Public Sector Enterprises’ (CPSEs) and other Government agencies.
  • It is also expected to own, hold, manage and monetize the surplus land and the building assets of CPSEs under the closure.
  • The proposal is in pursuance of the Budget Announcement for 2021-22.

Significance of NLMC:

  • With monetization of non-core assets, Government would be able to generate substantial revenues by monetizing unused and under-used assets.
  • It will also help carry out monetization of assets belonging to public sector firms that have closed or are lined up for a strategic sale.
  • Currently, CPSEs hold a considerable surplus, unused and underused 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.

Structure of the NLMC:

  • NLMC’s Board of Directors will consist of eminent experts, and senior Central Government officers to enable management and professional operations of the company.
  • The chairman and the non-government directors will be appointed through a merit-based selection process.

What is Asset Monetization?

  • Asset monetization is a process that helps the government to create a new source of revenue by unlocking the economic value i.e. monetization of previously unutilized and underutilized, tangible and intangible public assets.
  • A public asset can be any property owned by a public body, roads, railways, stations, airports,  pipelines, mobile towers, transmission lines, etc. and land that remains unutilized.
  • Monetization will also permit for the productive use of underutilized assets, as well as the initiation of new economic activities, private sector investments, the generation of financial resources for social and economic infrastructure, and the development of the local economy.

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