New Delhi: Setting the ball in motion on the Central government's asset monetisation plan, the Union Cabinet has approved the setting up of a new PSU — National Land Monetisation Corporation (NLMC) as a wholly owned Government of India company — with an initial authorised share capital of Rs 5,000 crore and paid-up share capital of Rs 150 crore. NLMC will undertake monetisation of surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other government agencies, said an official statement on Wednesday. The proposal is in line with the Budget announcement made in 2021-22 by Finance Minister Nirmala Sitharaman.
With monetisation of non-core assets, the government would be able to generate substantial revenues by monetising unused and under-used assets.
At present, CPSEs hold considerable surplus, unused and under-used non-core assets in the form of land and buildings. For PSUs, undergoing strategic disinvestment or closure, monetisation of these surplus land and non-core assets is important to unlock their value. NLMC will support and undertake monetisation of these assets. The government said that 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.
NLMC is also expected to own, hold, manage and monetise surplus land and building assets of PSUs under closure and the surplus non-core land assets of government-owned PSUs under strategic disinvestment. This will speed up the closure process of CPSEs and smoothen the strategic disinvestment process of government-owned PSUs, said the statement. These assets may be transferred to NLMC to hold, manage and monetise these assets. NLMC will also advise and support other government entities (including CPSEs) in identifying their surplus non-core assets and monetising them in a professional and efficient manner to generate maximum value realisation. In these cases (eg, ongoing PSUs and listed PSUs under strategic disinvestment), NLMC will undertake surplus land asset monetisation as an agency function. It is expected that NLMC will act as a repository of best practices in land monetisation, assist and provide technical advice to government in the implementation of asset monetisation programme.
NLMC will have necessary technical expertise to professionally manage and monetise land assets on behalf of PSUs and other government agencies. 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 NLMC will be appointed through a merit-based selection process.
"Recognising the wide range of specialised skills and expertise required for asset monetisation in real estate market research, legal due diligence, valuation, master planning, investment banking, land management etc, it has been decided to hire professionals from the private sector, similar to other specialised government companies like National Investment and Infrastructure Fund (NIIF) and Invest India. 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," said the statement
Going forward, the Department of Public Enterprise (DPE), Ministry of Finance, will set up the company and act as its administrative ministry, it added.
(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)