National Land Monetization Corporation – The Land Question

Mobilization of Resources, Govt. Policies and Interventions]

The Union Cabinet recently approved the creation of the National Land Monetization Corporation (NLMC) to monetize the surplus landholding of the Central Public Sector Enterprises (CPSE) and other government agencies

Taking into consideration the good amount of surplus and unused non-core assets with different government agencies, it is a prudent strategy that can lead to more efficient utilization of the under-utilized resources.

Reasons behind creation of NLMC:

1. It will help create a detailed and comprehensive repository of the state’s land holdings and identify surplus lands. It will also help create a database of potential investors so that the surplus land can be pushed for monetization.

2. As per the Reports, the total vacant and surplus land available with the Railways is around 1.25 lakh acres whereas the Defense Ministry also possesses considerable loans holdings outside of the cantonment boundaries. Collating all of them under a single entity will lead to more efficient monetization and better utilization of these assets.

3. Proceed and finance collected from the monetization of these resources can be used to help the government generate additional resources, boosting government coffers.

4. Auctioning of surplus lands will increase the supply of land, which may address the issue of scarcity of land that exists in certain areas.This could depress prices and thus have a moderating effect on costs of projects.

Significance of NLMC

• Considering that land monetisation is a complex process, entrusting this work to a separate agency is the right way to go about it. A separate entity, housed with professionals with specialized skills is better suited for this task.

• This will enable productive utilization of under-utilized assets to trigger private sector investments, new economic activities, boost local economy and generate financial resources for economic and social infrastructure.

• 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.

Possible Challenges

• The estimation of surplus land may become contentious as the government entities might be reluctant to declare land parcels as ‘surplus’. 
• The corporation will have to grapple with issues such as the absence of clear titles, ongoing litigation, and muted investor interest.
• Issue of encroachment of government lands.

Way Forward

While the creation of the National Land Monetization Corporation (NLMC) should lead to more efficient outcomes, it does raise questions over the management of commons, whether the public purpose can be better looked after by more effective management of public land by the state.

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