Explained: National Land Monetisation Corporation (NLMC) in India
The Government of India is planning to set up a National Land Monetization Corporation or NLMC under the department of Public Enterprises to fastrack monetization of land and non core assets of central public sector enterprises.
What is NLMC? Know the concept
- NLMC was proposed by the Finance Minister of India, Nirmala Sitharaman. She proposed a special purpose vehicle for this in her Budget speech of 2021.
- As informed by various media houses, National Land Monetisation Corporation would be a company under 100% government ownership with an initial authorised share capital of INR 5000.
- It would have a share capital of INR 150 crore.
- It would be governed by the board that would include secretaries from the concerned ministries as well as real estate business men, investment bankers etc. These will be managed by the chief executive officer in day to day operations.
- The proposal is however yet to get approved by the cabinet.
- The NMLC would be working as an asset manager for lands owned by the Union government as well as central public sector enterprises.
- The Government would allow the corporation to raise capital from the equity market, based on the value of its leased assets.
- NMLC would be required to work with the various government departments for land monetisation. After the formation of the corporation, they will identify and manage surplus lands and assets through this special purpose vehicle (SPV).
Nirmala Sitharaman said, “Monetising of land can either be by way of direct sale or concession or by similar means. This requires special abilities and for this purpose.”
The NLMC would have the freedom to invest, lease or rent the assets or monetise them in any other way as suggested by many sources. It may also develop assets for commericial or residential purposes or may generate income through rentals or lease.
What is Monetization?
To monetise is to express something or convert it into the form of currency. Basically, monetising is utilization of a source of profit, or to convert an asset into money or a legal tender.
It can be understood as the Government monetizing the country's debt by acquiring debt treasuries. It increases the supply of money and as a result the debt is turned into money or in other words it is monetized.
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