Govt, PSUs-held land valued at over Rs 50 cr may be e-auctioned

Land sale proceeds to retire debt or create capital assets

As the charges of corruption fly thick and fast, the government is planning to make e-auction mandatory for sale of any land held by it or public sector undertakings (PSUs) valued at over Rs 50 crore.

For land whose market value is less than Rs 50 crore, an open bidding process would be adopted.

A proposal to these effects would be brought to the Cabinet for discussion and a draft note is being circulated to various ministries and departments to elicit their views.  The proposal is part of a broad policy on transfer and alienation of land held by the government or public sector undertakings.

Besides plugging loopholes that breed corruption, the proposed policy is meant to maximize revenue realisation for thousands of acres of state-held land lying surplus across the country either directly with ministries or with their affiliated PSUs.

In big cities large tracts of land are owned by government or PSUs. A recent paper by Deloitte said that major ports in India have combined land assets of 2,58,000 acres at their disposal. Up to 20 per cent is not in use and could be leased out, the consulting firm pointed out.

Similarly, according to some estimates, Airports Authority of India (AAI) holds around 20,000 hectares of land in various cities, while Defence services have over 17,00,000 hectare of surplus land with them.

Officials said the draft Cabinet note also seeks ministries response on creating a transparent data bank of all government-held land.

In fact, the Vijay Kelkar committee on a roadmap for fiscal consolidation had recommended monetizing land resources held by PSUs and others to fund infrastructure needs in urban areas.

Howewver, while the Kelkar committee talked of land resources held by port trusts, Railways and PSUs, the current draft Cabinet proposal exempts land resources held by the Railways from its purview. Also, pieces of land cleared for Public Private Partnership and transfer of land between ministries would not come under this proposal.

The Railways hold around 10,000 acres of surplus land in urban centers. However, it has been kept out of the purview of the proposed policy because the Railways already has their own land sale, lease and commercialization policy in place.

Those in know of the development said the draft Cabinet note proposed that leasing of state-held land should ask for the upfront payment, equal to the sale value of the land on the day of lease agreement.

The sale and lease proceeds of all such government-owned land could be used to create capital assets or retire debt as land itself is a capital asset, those in know of the development said.

The proposed policy also aims at creating a Public Sector Land Management Committee (PSLMC) to oversee all sale, lease and transfer of all government or PSUs-owned land.

The Committee would comprise secretaries of departments of urban development, expenditure, space, land resources, legal affairs and public enterprises. “This committee will oversee all such sale, lease of transfer of government land and if the need be the Cabinet can also be asked to step in,” an official said.

The official said the ministries are also being urged to give the title of surplus land held with them because in many cases, land titles lie with the state governments or are unclear which would make any meaningful sale or lease of land difficult.

The Group of Ministers (GoM) on corruption has identified land as among the eight main natural resources which needs study and analysis to understand implications of deals in them on  breeding corrupt practices.

In recent times, the government has come under attack for not having transparent policies for natural resources-- be it on earth (land), under earth (mining) and in air (spectrum). The current draft Cabinet note on land is being seen as an attempt to address these issues by analysts.