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Govt may let private sector use state-run firms’ surplus land for projects

By Sanjay Singh

  • 06 Sep 2016
Govt may let private sector use state-run firms’ surplus land for projects
Credit: Shah Junaid/VCCircle

The department of public enterprises (DPE) is creating a data bank of surplus land holdings of central public sector units (PSUs) across the country for auction, said government officials.

A website is being set up by the ministry of urban development which will have information on land owned by the PSUs and the government. The land will be offered to the private industry and for government projects.

This comes in the backdrop of the Cabinet Committee on Economic Affairs’ decision to close HMT Chinar Watches Ltd, HMT Watches Ltd, HMT Bearings Ltd and Tungabhadra Steel Products Ltd, and transfer or sell their land to central and government ministries, departments and public sector banks.

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“Land acquisition has become difficult leading to many projects getting held up, dampening investments and growth from the private sector,” said a senior official from the ministry of heavy industries and public enterprises requesting anonymity.

The National Democratic Alliance (NDA) government has put a premium on infrastructure development. The total outlay for infrastructure announced in the budget for 2016-17 is Rs.2.21 trillion compared with Rs.1.80 trillion in revised estimates for 2015-16.

Another ministry official, who also didn’t want to be identified, confirmed the development and said, “The move comes in the wake of the announcement by finance minister Arun Jaitley in the annual budget this year.”

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“We have to leverage the assets of CPSEs (central public sector enterprises) for generation of resources for investment in new projects. We will encourage CPSEs to divest individual assets such as land, manufacturing units, among others, to release their asset value for making investment in new projects,” Jaitley had announced in his budget speech.

Land belonging to the defence forces will not be part of this exercise. Also, DPE will identify projects for which land would be used and the PSU concerned would be informed about the land usage. This will allow the PSUs to discourage any competition.

The strategy has been articulated earlier.

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“For monetising land resources, the potential is considerable given the underutilized prime lands of PSU’s, port trusts, railways, etc,” former finance secretary Vijay Kelkar-led committee in its report on roadmap for fiscal consolidation had recommended.

Queries emailed to the spokespersons of the ministries of heavy industries and public enterprises, urban development and finance remained unanswered. 

Experts believe that the plan may help the PSUs in generating some surplus fund.

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“It is good that the PSUs would be able to monetise their assets, which will in turn help them in using those funds for other future projects,” said Rakesh Kumar Upadhyay, former chairman and managing director of state-run Bharat Sanchar Nigam Ltd.

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