The National Land Monetisation Corporation

Why has the NLMC been set up by the Union government? How will it generate revenue and employment?

The story so far: The Union Cabinet on March 9 approved the creation of the National Land Monetisation Corporation (NLMC), the Special Purpose Vehicle (SPV) that Finance Minister Nirmala Sitharaman had announced in the Union Budget 2021-22, to carry out monetisation of government and surplus land holdings of public sector undertakings (PSU).

The National Land Monetisation Corporation will be a firm, fully owned by the government, to carry out the monetisation of government and public sector assets in the form of surplus, unused or underused land assets. It will fall under the administrative jurisdiction of the Ministry of Finance and will be set up with an initial authorised share capital of ₹5,000 crore and a paid-up capital of ₹150 crore.

Apart from monetising underutilised or unused land parcels of Central Public Sector Enterprises (CPSEs), the Corporation will also facilitate the monetisation of assets belonging to PSUs that have ceased operations or are in line for a strategic disinvestment, with the aim of unlocking the value of these land holdings.

The surplus land and building assets of such enterprises are expected to be transferred to the NLMC, which will then hold, manage and monetise them.

According to an official statement released after a recent Cabinet meeting chaired by Prime Minister Narendra Modi, the setting of the NLMC “will speed up the closure process of the CPSEs and smoothen the strategic disinvestment process.”

The statement said it “will also enable productive utilisation of these under-utilised assets” by setting in motion private sector investments, new economic activities such as industrialisation, boosting the local economy by generating employment and generating financial resources for potential economic and social infrastructure.

Besides managing and monetising, the NLMC will act as an advisory body and support other government entities and CPSEs in identifying their surplus non-core assets and monetising them in an efficient and professional manner, maximising the scope of value realisation.