PM Modi led Union Cabinet has approved the setting up of 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, an official release said on Wednesday (9 March).
The NLMC will undertake monetisation of surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other Government agencies.
The proposal is in pursuance of the Budget Announcement for 2021-22, said a Cabinet release.
With monetisation of non-core assets, the Government would be able to generate substantial revenues by monetising unused and under-used assets, the release added.
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, monetisation of these surplus land and non-core assets is important to unlock their value, it said.
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 release said.
NLMC is also expected to 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, according to the release.
Further, these assets may be transferred to NLMC for holding, managing and monetising.
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.
The government expects that the NLMC will act as a repository of best practices in land monetisation, assist and provide technical advice to Government in implementation of asset monetisation programme.
Further, NLMC will have necessary technical expertise to professionally manage and monetise land assets on behalf of CPSEs and other Government agencies, the release said.
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, it added.
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, the release said.
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.
Going forward, Department of Public Enterprise under the Ministry of Finance will set up the company and act as its administrative ministry, it added.