From UPSC perspective, the following things are important :
Prelims level : National Land Monetisation Corporation (NLMC)
Mains level : Asset Monetization
The Union Cabinet has approved the setting up of a new government-owned firm National Land Monetisation Corporation (NLMC) for pooling and monetizing sovereign and public sector land assets.
What is NLMC?
- The National Land Monetisation Corporation (NLMC) is being formed with an initial authorised share capital of ₹5,000 crore and paid-up capital of ₹150 crore.
- The government will appoint a chairman to head the NLMC through a “merit-based selection process” and hire private sector professionals with expertise.
- The NLMC will undertake monetization of surplus land and building assets of Central public sector enterprises (CPSEs) as well as government agencies.
How will it function?
- 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.
- This will speed up the closure process of CPSEs and smoothen the strategic disinvestment process of Government-owned CPSEs, the statement said.
- 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 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, the statement said.
- The Corporation will have minimal full-time staff, hired directly from the market on a contract basis.
- CPSEs have referred around 3,400 acres of land and other non-core assets to the Department of Investment and Public Asset Management (DIPAM) for monetisation.
- Monetisation of non-core assets of MTNL, BSNL, BPCL, BEML, HMT, is currently at various stages of the transaction, as per latest data in the Economic Survey 2021-22.
Significance of NLMC
- The government would be able to generate substantial revenues by monetizing unused and under-used assets.
- The new corporation will also help carry out monetization of assets belonging to public sector firms that have closed or are lined up for a strategic sale.