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3. The National Land Monetisation Corporation will not only generate revenue from the surplus land holdings of the government but also streamline management of government held land. Analyse. (150 words)
Reference: Indian Express
Introduction
The Union cabinet recently approved the creation of a National Land Monetisation Corporation to monetise the surplus land holdings of Central Public Sector Enterprises (CPSEs) and other government agencies. Considering that various arms of the state have considerable land holdings across the country, monetisation of their “surplus, unused and under-used non-core assets in the nature of land and buildings” is a prudent strategy as it will lead to more efficient utilisation of these “under-utilised” assets.
Body
Rationale behind National Land Monetisation Corporation
- Database of land surplus and investors:A detailed and comprehensive inventory of the state’s land holding will not only help it identify the surplus land, and push for monetising it, but will also help create a database for potential investors.
- Clarity to potential investors:A properly marked land parcels with geographical identifiers, with their boundaries clearly demarcated, and with the legality of title well established, will provide greater clarity and certainty to private investors.
- Monetising unused land:Public sector entities hold vast tracts of land that are either unused and underused land.
- As per reports, the total vacant land available with Railways is estimated at around 1.25 lakh acres.
- Similarly, the defence ministry also has considerable land holdings outside of the cantonment boundaries.
- Thus, collating them under a single entity will lead to a more efficient monetisation drive, and better utilisation of these assets.
- Additional resources:The proceeds from the monetisation of these assets will help generate additional resources, boosting government coffers. The land in and around prime areas can possibly generate substantial returns.
- Reduce artificial scarcity of land:Importantly, auctioning off surplus land will increase the supply of land, which may address the issue of the “artificial” scarcity of land that exists in certain areas. This could depress prices and thus have a moderating effect on costs of projects.
- Separate entity to streamline management: Considering that land monetisation is a complex process, entrusting this work to a separate agency is the right way to go about it.
- As the government itself has acknowledged,it requires “specialised skills and expertise” in areas such as “market research, legal due diligence, valuation, master planning, investment banking and land management.”
- A separate entity, housed with professionals with specialised skills is better suited for this task.
Issues that exist
- First,the estimation of surplus land may be a contentious issue.
- Ministries, departments, and public sector entities may bereluctant to demarcate land parcels as “surplus”.
- Second, the corporation will have to grapple with issues such as the absence of clear titles, ongoing litigation, and muted investor interest.
- Third, there is also the issue of the encroachment of government land to contend with.
- But while this monetisation drive should lead to more efficient outcomes, it does raise questions over the management of commons, and whether public purpose can be better looked after by more effective management of public land by the state.
Way forward
- The success of the infrastructure expansion plan would depend on other stakeholders playing their due role.
- These include State governments and their Public Sector Enterprises and the private sector.
- In this context, the Fifteenth Finance Commission has recommended the setting up of a High-Powered Intergovernmental Group to re-examine the fiscal responsibility legislation of the Centre and States.
- Maintaining transparency is the key to adequate realisation of the asset value.
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