Govt nod to Special Purpose Vehicle to monetise surplus land

New Delhi, March 9

In a major reform initiative, the Union Cabinet today gave its nod for setting up a Special Purpose Vehicle (SPV) to hold and monetise surplus government land and buildings, including that of Central Public Sector Enterprises (CPSEs), which are being privatised or being shut down.

The government said the Union Cabinet approved forming the SPV called the National Land Monetisation Corporation (NLMC), which will be 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.

The SPV, which will be set up under the administrative jurisdiction of the Finance Ministry, will be a lean organisation with minimal full-time staff, hired directly from the market on contract basis, it said without specifying as to how the surplus land and buildings would be transferred to NLMC.

“The NLMC will undertake monetisation of surplus land and building assets of CPSEs and other government agencies,” the statement read, adding that by off-loading of non-core assets, the government would be able to generate substantial revenues.

According to the plan, the government wants to unlock the economic value of unutilised or underutilised public assets and generate additional revenue by monetising them, it says, adding that at present, “CPSEs hold considerable surplus, unused and underused 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 NLMC will support and undertake monetisation of these assets,” it said.

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