Government identifying PSUs with land bank but little business for selloff

With an aim to collect surplus land, the government is identifying the Public Sector Undertakings (PSUs) that have land bank but little to no use as the business isn’t productive anymore, The Times of India reported. For this, the government has established a special purpose vehicle (SPV) called the National Land Monetization Corporation (NLMC), a wholly-owned organisation.

Hemisphere Properties, the listed firm, for example, established to take over the land of the former VSNL (now Tata Communications), is one of the businesses that is thought to have a sizable land bank.

The PSU, which is administratively governed by the housing and urban affairs ministry, even advertised the sale of farmhouses in South Delhi that were priced at upward of Rs 25 crore each.

Sources stated that although a final decision on the company’s fate has not been made as a result of reservations by some ministries. There are numerous similar companies that are sitting on land and are seen as suitable candidates to be taken up for privatisation or sale after transferring the land to the recently established SPV.

The action is being undertaken at a time when the Center is eager to continue its asset monetisation programme, which has slowed down recently, especially as a result of railways choosing to take on a number of projects like modernising railway stations via the EPC route or giving up the process of enlisting private players to operate trains.

After collecting Rs 96,000 crore last year, against a target of Rs 88,000 crore, the government is aiming for Rs 1.6 lakh crore in asset monetisation in the current fiscal. As things have not advanced past the company’s incorporation, the Center is perceived as being hesitant to move on monetising the enormous land bank that is available with NLMC.