- Many CPSEs have large swaths of unutilized land lying idle, and the Modi government plans to lease this land to private players in order to generate revenue from them.
- In the AtmaNirbhar Bharat plan, the Modi government has made it clear that the government will not be present in any sector of the economy except for strategic ones – atomic energy, Space and Defence; Transport and Telecommunications; Power, Petroleum, Coal, and other minerals; and Banking, Insurance, and financial services.
- Apart from the privatization drive, the government is also focusing on the monetization of the assets held by the public sector.
Taking another step in the direction of turning the country into a rule-based capitalist economy, the finance ministry has sought cabinet nod to set up a company to monetize the land of central public sector units (CPSEs). Many CPSEs have large swaths of unutilized land lying idle, and the Modi government plans to lease this land to private players in order to generate revenue from them.
“We are talking about a company which will be there for many years, which will specialise in handling surplus land and non-core asset monetisation. We are expecting it shortly. As soon as we get Cabinet approval,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said. There are some CPSEs for strategic disinvestment and “we feel certain portion of land is not really worth going with the company and those assets could be monetised”, he said.
There are 331 CPSEs with investments of 12,50,373 crore rupees at the end of the fiscal year 2017. Most of these companies are in the manufacturing and generation (96), services (119), and construction (76) sectors. The CPSEs in the energy sector made up two-thirds of all the profits of Rs 1,52,647 crores during 2016-17. Bharat Sanchar Nigam Ltd, Air India Ltd, and Mahanagar Telephone Nigam Ltd are among the worst performers in public sector companies. 82 CPSEs made losses of 25,045 crore rupees and the number of loss-making CPSEs has grown from 54 in 2007-08 to 82 in 2016-17.
In the AtmaNirbhar Bharat plan, the Modi government has made it clear that the government will not be present in any sector of the economy except four strategic ones – atomic energy, Space and Defence; Transport and Telecommunications; Power, Petroleum, Coal, and other minerals; and Banking, Insurance, and financial services.
All the CPSEs in other sectors will be privatized and even in the strategic sector, there will not be more than four or five sectors. The government showed its commitment to privatization with the recent big-ticket sale of Air India, which was gulping thousands of crores of taxpayer’s money every year.
Apart from the privatization drive, the government is also focusing on the monetization of the assets held by the public sector. And the cabinet nod is being sought to monetize the highly valuable land held by CPSEs and government departments in prime real estate areas. This monetization will be done by a company that would be set up in form of a Special Purpose Vehicle (SPV).
The union government is the biggest landholder in India with various ministries like Defence, Railway, holding millions of acres of land. Many PSUs like BSNL, Power Grid, Oil Marketing Companies (OMCs) also hold large swaths of land across the country.
In the last union budget, the finance minister stressed land monetization to meet the capital expenditure target and infrastructure development. Since then, the ministries are working on the plan with the Ministry of Railways and Ministry of Road Transport under the leadership of Piyush Goyal and Nitin Gadkari respectively, leading the way. Also, these two ministries need the most capital to build infrastructure, so monetization drive is crucial for them to raise money.
The Defence Ministry, which is the biggest landowner in the country, has about 17.95 lakh acres of land, of which, around 1.6 lakh acres land is within the 62 cantonments and about 16.35 lakh acres outside their boundaries. There is a dedicated department named Directorate General, Defence Estates to look for the land under the defence ministry. The Ministry is assessing land available for monetization and later this land will be allotted to private and public players to generate revenues.
The defence ministry also needs huge amount of money for privatization drive and monetizing the land held in prime real estate areas is the most feasible way to raise this money. The land monetization drive, if successful, will prove very crucial in raising the capital for 100 lakh crore rupees infrastructure building plan of the Modi government.
If implemented in Time, It would be a Bold Move in the overall interest of the National Economy, the Stake holders and the Public at large, as their hard earned Money has been invested in Many White Elephants in the form of CPSU,
These CPSUs are capable of turn around, if their unproductive, unutilised surplus Land and the inventories are disposed of through various measures such as Monetization, Mergers (FOR EX. BSNL & MTNL),and Immediate Out right Sell off of the Loss Making Units to reduce the Burden on the exchequer.
The Duty of the Government is the better Governance, Administration and Management of the Exchequer and the Tax Payers Money by not losing the same any more.