The Narendra Modi-led Union Government is planning to pool land owned by several sick PSUs [Public Sector Units] and will hand over these lands to the State runed developer NBCC to construct residential projects on them in various states. The Government is willing to realize the cost of these lands via the bidding process.
According to an official, a Cabinet note is prepared by the Department of Public Enterprises [DPE] that lists the status of loss-making firms, their assets and closure approvals. The Central Government also framed guidelines on the closure of loss-making companies in 2016. The guidelines are framed under a Land Management Agency [LMA] who was then asked to assist the Administrative Ministry or the CPSE’s board to in the disposal of land.
As per the guidelines, the LMA will also be a CPSE such as NBCC and the organization will get an emolument of 0.5% of the land value realized from the disposal of land. This value of a property is subjected to a capital cost of Rs. 1 Crore. The Land Management Agency will also determine the current land usage and how much it is appropriate for industrial, manufacturing or other purposes. The formation of LMA is a bit similar to that of the Public Sector Land Development Authority [PSLDA] that maximizes the value of additional land with sick units which can be sold for commercial usage.
The information related to any litigation on the closures has already sought by the Department of Public Enterprises from Administrative Ministries. According to an official, most of the Central Public Sector Enterprises [CPSE] gave details of movable and immovable assets both. The details of lease-hold land along with the status of non-sale clause timing of it’s return to the State Government has also been asked by the Department of Public Enterprises.
According to an NBCC official, few CPSEs have approached them to be the Land Management Agency. He further said that NBCC will look for maximum returns in case the Government decides to land pool on variously available lands.
Nearly 30 sick PSUs have been identified and a half of them have received a green signal from the cabinet. The Hindustan Cable, Tyre Corporation, HMT Watches, Birds Jute and Export Limited [BJEL] and Central Inland Water Transport Corporation are some of them.
An oversight committee will be formed under the NITI Aayog to speed up the process of closure of sick CPSEs under the revised guidelines approved by the cabinet in June 2018.