Surplus land can either be sold or leased out

The Cabinet will soon take up a proposal for surplus land utilisation policy for Central public sector undertakings (CPSUs).

The policy mainly aims at helping loss-making CPSUs to make better use of available resources.

“A list of CPSUs belonging to 38 Central Ministries is available. Now, the Cabinet has to take a call on monetisation of surplus land,” a senior Government official told Business Line.

Inter-ministerial consultations on this proposal are on and as soon as these are over, a final proposal will be sent for the Cabinet’s consideration.

He said although various CPSUs had surplus land, our first priority was to help chronic and other loss-making companies to get benefits.

There are two options. First, to provide the facility of selling land, and the second option is to give land on long-term lease.

“We feel that the Cabinet is the appropriate authority to decide which of the options are to be exercised,” the official added.

Loss-making CPSUs, with huge surplus land, are facing twin problems. First, they do not have cash to expand the production facility on additional land. Second, encroachment by slum dwellers and others is creating problems. Even profit-making PSUs are facing the problem of encroachment.

For example, NEPA Ltd has 350.51 acre of freehold and 2,320.08 acre of leasehold land. However, some individuals have encroached upon 19 acre in its township. NEPA is one of the loss-making CPSUs whose revival plan has been submitted to the Board for Reconstruction of Public Sector Undertakings (BRPSE).

Accordingly, a Government approved revival plan was chalked out on September 6.

At the same time, BHEL, a Navratna and profit-making CPSU, has over 8,000 acre of freehold and over 7,000 acre of leasehold land. A total 159.5 acre of its land has been occupied by slum dwellers.

The Government feels monetisation of land will also help in reducing cash and non-cash support being given to loss-making CPSEs.

According to the recommendations of BRPSE, the Government has provided assistance worth Rs 26,108 crore to 45 CPSUs. This includes over Rs 4,500 crore as cash and nearly Rs 21,600 crore non-cash aid (like interest waver, waiver of principal amount etc.).

(This article was published on October 22, 2012)
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