NEW DELHI: Standardized valuation, identification of surplus land and norms for the transfer, exchange, lease and commercial sale of land are among the key features of a new framework that the Centre has put in place to unlock public land assets under the second phase of the ₹16.7 trillion National Monetisation Pipeline (NMP 2.0), two government officials said.
The Department of Expenditure has issued consolidated guidelines governing the transfer and alienation of Central government land to speed up the monetization, redevelopment and transfer of such assets, replacing the fragmented and decades-old rules followed separately by ministries and departments to support infrastructure creation and mobilize non-tax revenue, they said.
Government entities, including the railways, defence establishments, ports and state-run companies hold vast tracts of land across the country, including 2.35 lakh acres of surplus land with loss-making central public sector enterprises. According to the Economic Survey 2021-22, CPSEs such as MTNL, BSNL, Bharat Petroleum, BEML and HMT had identified about 3,400 acres of surplus
“A substantial portion of these assets has remained unused or locked in low-value use because of procedural delays, ownership disputes, overlapping claims between departments and lack of a uniform valuation mechanism,” the first government official said.
“The new framework lays down standard procedures for transfer, exchange, lease and commercial sale of land owned by ministries, departments, attached offices, statutory authorities, Union Territories without legislature and government-controlled entities,” the second official said.
Formal identification
One key change is the formal identification of ‘surplus land’ that is no longer required for the original public purpose for which it was acquired. These purposes could include the setting up of offices, housing, railways, factories, hospitals, schools, or other public infrastructure and development projects.
“Such land can now be transferred between government entities, leased for infrastructure and public utility projects or commercially monetized,” the second official said.
Queries sent to the ministry of finance on 16 May remained unanswered till press time.
“The transfer and utilization of government land has traditionally been a long and cumbersome process involving multiple committees and clearances from different departments,” said V. P. Kulshrestha, council member and former secretary general of the Institute of Town Planners India, a professional body of urban and regional planners. “In many cases, changes in land-use approvals are also required, particularly where some development or improvement has already taken place… If the government has now simplified these procedures, it is a positive development.”
Once is identified as surplus, departments can use it for redevelopment or monetization more easily, which improves the ease of doing business, he said. Kulshrestha added that departments could partly monetize surplus land assets to generate revenue and use the proceeds for expansion and infrastructure development.
“States are already undertaking similar exercises, so this move is in line with broader trends in public land monetization,” he said.
Valuation norms
The government has also introduced a standardized valuation framework through the National Land Monetisation Corporation (NLMC), which will determine market value, guideline value and rental value of land. The officials cited earlier said the absence of a uniform valuation mechanism had often delayed monetization and redevelopment projects.
The revised rules define approval authorities and pricing mechanisms for different categories of land transactions. Transfers between government entities for public purposes can be done through book transfer or nominal rental value, while commercial use and transfer to private entities would require market-linked valuation and prescribed procedures, including competitive bidding in certain cases.
“The framework would help reduce procedural ambiguity and improve transparency in land transactions involving government entities. The move is also expected to facilitate redevelopment of old government colonies, monetization of surplus PSU land and faster implementation of requiring transfer of land between ministries and agencies,” said Amit Singh, associate professor at the Special Centre for National Security Studies at Jawaharlal Nehru University.