National Land Monetization Corporation (NLMC)-UPSC Current Affairs

Why in the News?

The Government of India has approved the setting up of the National Land Monetization Corporation (NLMC) to monetise surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other agencies linked to the Government.

• The setting up of NLMC is in pursuance of the Budget Announcement for 2021-22.

Probable Question

Discuss the role and function of National Land Monetization Corporation in monetizing the assets of Central Public Sector Enterprises (CPSEs).

Key Points

About NLMC

• National Land Monetization Corporation (NLMC) is a wholly owned Government of India company. It will be under the administrative jurisdiction of the Finance Ministry.
• Composition: The NLMC board will comprise senior Government officers and eminent experts, while its chairman and non-Government directors will be appointed through a merit-based selection process.
  • NLMC will hire professionals from the private sector as in the case of similar entities like the National Investment and Infrastructure Fund (NIIF) and Invest India.
• Funds: NLMC will have an initial authorised share capital of Rs 5,000 crore and paid-up share capital of Rs 150 crore.
• Functions:
  • NLMC will undertake surplus land asset monetisation as an agency function and assist and provide technical advice to the Centre in this regard.
  • The NLMC will own, hold, manage and monetise surplus land and building assets of CPSEs under closure and surplus non-core land assets of Government-owned CPSEs under strategic disinvestment.
  • It will also advise and support other Government entities (including CPSEs) in identifying their surplus non-core assets and monetizing them in a professional and efficient manner to generate maximum value realization.
  • NLMC will also act as a repository of best practices in land monetization, assist and provide technical advice to Government in implementation of asset monetization programme.

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Significance

• With the monetisation of non-core assets, the government would be able to generate substantial revenues by monetising unused and under-used assets.
• Monetisation of surplus land would help the government to reduce its business presence to a bare minimum and generate resources for future asset creation.
• For CPSEs undergoing strategic disinvestment or closure, monetization of these surplus land and non-core assets will help them unlock their value.
  • NLMC will support and undertake monetization of these assets.
  • This will also enable productive utilisation of these under-utilized assets to trigger private sector investments, new economic activities, boost local economy and generate financial resources for economic and social infrastructure.
• This will speed up the closure process of CPSEs and smoothen the strategic disinvestment process of Government-owned CPSEs.

Also read: Best Way To Prepare Economy For UPSC Prelims

Challenges

Among the key challenges that NLMC might face include:

• Lack of identifiable revenue streams in particular land assets,
• Dispute resolution mechanism,
• Various litigations and lack of clear titles, and
• Low interest among investors in remote land parcels.

Conclusion

• The establishment of NLMC has the potential to be a game changer in the field of land monetization. It would not only provide critical support to PSUs and other government agencies, but it would also contribute to the country's economic growth and job creation.

Image Source: NITI Aayog

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