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News: Last week, the Union cabinet approved the creation of a National Land Monetisation Corporation Mandate
|Read more – About National Land Monetisation Corporation|
It will work to monetise the surplus land holdings of Central Public Sector Enterprises (CPSEs) and other government agencies. It will have a detailed and comprehensive inventory of the state’s land holding.
Why has the government come up with NLMC?
First, it will help identify the surplus land. It will give a push for monetising surplus land and also create a database for potential investors.
Second, public sector entities hold vast tracts of land that are either unused and underused land. For example, the Indian Railways is estimated to have around 1.25 lakh acres of total vacant land.
Third, proceeds from the monetisation of these assets will help generate additional resources, boosting government coffers.
Fourth, it will resolve the issue of the “artificial” scarcity of land, with an increase in the supply of land by auctioning off surplus land. It will depress land prices and thus have a moderating effect on costs of projects.
What are the challenges in front of NLMC?
First, the Ministries, departments, and public sector entities may be reluctant to demarcate land parcels as “surplus”.
Second, there will be issues like absence of clear titles, ongoing litigation, and muted investor interest.
Third, there is the issue of the encroachment of government lands.
Fourth, it raises questions over the management of commons, i.e., whether a public purpose can be better looked after by more effective management of public land by the state.
What are the suggestions to tackle the challenges?
Therefore, the separate agency should be housed with professionals with specialised skills that are better suited for this task.
A “specialised skills and expertise” in areas such as “market research, legal due diligence, valuation, master planning, investment banking and land management” is the need of the hour for land monetization.
Source: The post is based on an article “Monetising surplus land held by state is a good idea, it needs to be done with transparency, sensitivity to public interest” published in the Indian Express on March 14th, 2022.