New Delhi : After the Supreme Court has given the green signal to the government on the issue of auction not being the sole mode to sell off natural resources, the Centre has now prepared an ambitious plan to sell surplus government land to generate cash to meet the fiscal deficit, reports Times of India.
The report said, a cabinet note prepared by the finance ministry within days of the Kelkar panel submitting its recommendations says that proceeds from the sale or lease of surplus land, seen as a non-performing asset, would be used only to repay loans or create capital assets that will generate recurring revenue.
The statement of objective is to counter criticism that the government is selling family silver to feed its populist policy impulse.
The proposal, says the report, virtually lays down the policy that outright sale of land is to be preferred over other modes of earning cash from it — like lease and licensing.
The government says that land leases are a losing proposition since the rental is out of sync with market value. Also, regaining possession of land after expiry of lease is a tough act.
Any sale of land with market value of more than Rs 50 crore would require Cabinet approval while those below would have to be disposed as per laid-down e-auction procedure.
For purposes of leasing, the Vijay Kelkar committee has suggested that the rental be fixed on the basis of elaborate criteria based on market value of land and the expected appreciation.
The TOI report says, the move to monetize land coincides with the raging debate over how to exploit government assets, including more divestment in PSUs to bridge the yawning fiscal deficit.
The Kelkar committee warned that the failure to move briskly would expose the country to a crisis worse than what it had endured in 1991.
The report suggested that exploitation of the government’s assets could play a key role.
Although most government departments do not have an exhaustive asset register, the assessment is that shipping, defence, posts, airport authority and railways would be sitting on the largest land banks.
According to estimates, railways alone can monetize around 10,000 acres in urban centres, generating Rs 50,000 crore. Similarly, port trusts can monetize around one-fifth of 2.5 lakh acres they own.
The new land alienation policy may even cover Airport Authority of India and port trusts that enjoy statutory powers to grant lease on their own.
Besides revenue for the cash-strapped exchequer, the move will result in the creation of a maiden database of government land and identification of surplus land with all public entities, PSUs included.
