New Delhi: After launching the 6-Lakh-Crore Asset Monetization Program, the government has accelerated efforts to store surplus land and will soon seek cabinet approval to establish a special entity (special purpose vehicle, or SPV) to conduct these transactions for companies, Ministries and Department has.
The entity will also handle land transactions from companies managed by countries that have been closed or face closure.
The government has played with several models to monetize land for the past four-five years but seems to finally move towards the application of decisions.
“We are completing the details and, in the next 10 to 15 days, we will approach the cabinet for this SPV approval which was announced in the budget,” said senior government officials.
In the budget, Minister of Finance Nirmala Sitharaman has proposed a SPV in the form of a company to monetize non-core assets, which most of the ministry’s land surplus, department and PSU.
“Soil monetization can be with direct sales or concessions or in a similar way.
It requires special abilities and for this purpose,” he said as proposed SPV.
The official said the new entity would make land transactions for PSU and other government agencies at a cost and would act as an institution where land assets would be collected before being sold.
He said several PSUs were on the verge of privatization, such as Air India and Beml, were in the process of working on non-core assets, including land and buildings.
Selling excess land and buildings and apartments is also explored by two Telecom PSUS BSNL and MTNL as part of the restructuring process.
The official said in the current conditions, lack of capacity in an effort related to the land of the government has delayed the process.
New entities will be managed with domain experts and people who are trained in complex transactions.
The government managed by the government has carried out several transactions by selling soil surplus and use results to build accommodation for government employees and commercial spaces.
Soil monetization has become a controversial problem as a cautious civil servant has dragged their feet to speed up the transaction.
Some transactions have been postponed for years.