Cabinet approves formation of National Land Monetisation Corp for sale of surplus govt land, buildings

File image of Prime Minister Narendra Modi chairing a Union Cabinet meeting. (Image: PIB)

The Cabinet has approved the formation of National Land Monetisation Corporation (NLMC) to handle the sale of surplus land and buildings of the government, its agencies, and Central Public Sector Enterprises (CPSEs).

NLMC will be a wholly owned central government entity with an initial authorised share capital of Rs 5,000 crore and paid-up share capital of Rs 150 crore, the government said in a statement on March 9.

The special purpose vehicle will be set up by the Department of Public Enterprise and the Ministry of Finance.

"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," the government said.

The Cabinet's approval for setting up NLMC comes after Finance Minister Nirmala Sitharaman had made an announcement on the same in her FY22 budget speech.

In her budget speech, Sitharaman had said last year that monetisation of non-core assets - comprising largely of surplus land with ministries, departments and public sector enterprises - could be either through a direct sale "or concession or by similar means".

The Economic Survey for 2021-22, tabled in Parliament in January 2022, had noted that the desired skill set to take on the responsibility of management and monetisation of the government's non-core assets was "limited" at present, with CPSEs having referred around 3,400 acres of land and other non-core assets for monetisation.

In its statement today, the government said that given the expertise needed to sell the assets, NLMC will comprise professionals from the private sector, similar to other specialised government companies like National Investment and Infrastructure Fund 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," the government statement added.

NLMC's board will include senior central government officers and eminent experts, with the chairman and non-government directors appointed via a merit-based selection process.

In addition to selling surplus land and buildings, NLMC will also own and manage these surplus 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. These assets may be transferred to NLMC to hold, manage and monetise these assets," the government said.