National Land Monetization Corporation (NLMC) - UPSC Notes

The Union Cabinet chaired by Prime Minister Narendra Modi approved setting up National Land Monetization Corporation (NLMC) to undertake monetization of surplus land and building assets of central public sector enterprises (CPSEs) and other government agencies. In this article, you can read all about the National Land Monetization Corporation for the IAS exam economy segment.

National Land Monetization Corporation

The NLMC will undertake the monetization of surplus land and building assets of CPSEs and other government bodies/organisations.

Capital:

• The NLMC will have an initial authorized share capital of Rs 5,000 crore and a paid-up share capital of Rs 150 crore.

Members:

• NLMC will be a lean organization with minimal full-time staff, hired directly from the market on contract.
• The Board of Directors of NLMC will comprise senior Central Government officers and eminent experts to enable professional operations and management of the company.
• The Chairman, non-Government Directors of the NLMC will be appointed through a merit-based selection process.
• It will hire professionals, similar to other specialized firms like National Investment and Infrastructure Fund and Invest India.

NLMC Functions

The functions of the NLMC include:

Monetization of assets:

• At present, CPSEs hold a considerable surplus, unused, and underused non-core assets in the nature of land and buildings.
  • The Central Public Sector Enterprises (CPSEs) are those entities in which the government or other CPSE holds 51% or more of the ownership.
• The NLMC will monetize surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other agencies linked to the Government.

Strategic disinvestment:

• NLMC is also expected to own, hold, manage and monetize surplus land and building assets of CPSEs under closure and the surplus non-core land assets of Government-owned CPSEs under strategic disinvestment.

Repository function:

• NLMC will act as a repository of best practices in land monetization, assist and provide technical advice to the Government in the implementation of the asset monetization program.

Advisory function:

• NLMC 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.

National Land Monetization Corporation Advantages

Trigger Private Investment:

• NLMC will support the monetization of assets to enable productive utilization and trigger private sector investments.

Revenue generation:

• With the monetization of non-core assets, the Centre would be able to generate substantial revenues by monetizing unused and under-used assets.

Closure process:

• NLMC will speed up the closure process of CPSEs and smoothen the strategic divestment process of CPSEs.

Other benefits:

• Will promote new economic activities,
• Boost local economy, and
• Will generate financial resources for economic and social infrastructure.

National Land Monetization Corporation Challenges

The NLMC will face certain challenges that are enumerated below:

• 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 central government has taken this initiative to unlock the true value of surplus land and non-core assets of the government and of the linked government-linked agencies.
• It is believed that the NLMC will bring private sector investments, will boost the local economy, and will result in the creation of efficient economic and social infrastructure by generating adequate financial resources.

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