Govt looking to monetise possible IT parks, SEZs developed on PSU land

There could be information technology (IT) parks and special economic zones (SEZs) developed on the idle land assets of public sector undertakings (PSUs) as well as government departments that can’tsell them.

The government is considering converting such lands into revenue-generating, financially viable projects. This would help in better utilisation of assets that have not been put to use for years, an official said.

Developing long-term, revenue-generating resources by using such idle assets will help create more value than by disposing them of at low valuations, the official added.

A special purpose vehicle (SPV), proposed in the Union Budget 2021-22 for monetising land through direct sale or concession, may take over the land assets of PSUs and develop them into software technology, or IT, parks and SEZs.

“Land parcels that cannot be sold due to issues such as their title can be put to better use than being left unutilised for years,” the official said.

Although the new SPV would house experts who would help resolve land-related issues and disputes, assets that are situated in prime areas or even outskirts of the city can be put to better use if private buyers do not have the appetite for such assets, the official said.

Litigation- and dispute-free land parcels, however, are likely to be sold to private buyers, and a new online bidding portal is also being launched to facilitate selling of such assets.

The government is also finalising the structure of the land SPV and is exploring how land assets of PSUs can be transferred to the new entity, and subsequently sold to a buyer. The properties can be directly sold to a new buyer or through a concession or a public private partnership arrangement, the official said.

Calling this a “good idea”, N R Bhanumurthy, vice chancellor at Bengaluru’s Dr B R Ambedkar School of Economics (BASE) University, said this had been experimented in some coastal areas of the country such as Gujarat, Andhra Pradesh, and Odisha. “The same model can be replicated by the central government for its idle land assets. However, there is a need for a market-linked dynamic pricing policy for both land leasing and renting,” Bhanumurthy said.

According to the current guidelines for the closure of PSUs, in case the PSUs’ land assets cannot be monetised within 11 months from the date of approval to close state-owned firms, land or property can be utilised for public purposes such as parks and utilities in consultation with the NITI Aayog, and with approval from the Cabinet Committee on Economic Affairs. Business Standard