NEW DELHI: After unveiling the Rs 6-lakh-crore asset monetisation programme, the government has accelerated efforts to hive off surplus land and will soon seek Cabinet approval for setting up a specialised entity (special purpose vehicle, or SPV) to undertake such transactions for state-run companies, ministries and departments.
The entity will also handle land transactions of state-run firms that have closed or are facing closure. The government has been toying with multiple models to monetise land for the last four-five years but seems to have finally moved towards implementing the decision.
“We are finalising the details and, in the next 10 to 15 days, we will approach the Cabinet for approval of this SPV that was announced in the Budget,” a senior government official said.
In the Budget, finance minister Nirmala Sitharaman had proposed an SPV in the form of a company to monetise non-core assets, which is largely surplus land of ministries, departments and PSUs. “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,” she had said while proposing the SPV.
The official said the new entity will undertake land transactions for PSUs and other government agencies for a fee and will act as an agency where land assets will be pooled before being sold off. He said several PSUs that are on the verge of privatisation, such as Air India and BEML, are in the process of hiving off non-core assets, including land and buildings. Selling off surplus land as well as building and apartments is also being explored by two telecom PSUs BSNL and MTNL as part of the restructuring process.
The official said under current conditions, lack of capacity in undertaking transactions linked to government land had delayed the process. The new entity will be staffed with domain experts as well as people who are trained in complex transactions.
State-run NBCC had undertaken some transactions by selling off surplus land and using the proceeds to build accommodation for government employees as well as commercial space.
Monetisation of land has been a contentious issue as cautious civil servants have been dragging their feet on accelerating such transactions. Several transactions have been delayed for years.