Union Budget 2021: Govt’s great land sales idea needs a process-oriented transparent approach – India News , Firstpost

It is vital that cash coming from land sales be allotted in direction of particular infrastructure initiatives, ideally within the very state the place land is being offered.

Union finance minister Nirmala Sitharaman. Image courtesy CNBC-TV18

As the Finance minister Nirmala Sitharaman mentioned in her Budget speech: “Idle assets will not contribute to AtmaNirbhar Bharat. The non-core assets largely consist of surplus land with government Ministries/Departments and Public Sector Enterprises. Monetising of land can either be by way of direct sale or concession or by similar means. This requires special abilities and for this purpose, I propose to use a Special Purpose Vehicle in the form of a company that would carry out this activity.”

This is a good and progressive idea which a number of the earlier budgets lacked. Let’s take a look at this in higher element and pointwise:

1• If you’re the variety who likes strolling round India’s huge cities, you’d positively see a lot of presidency land mendacity unused bang in the midst of India’s largest cities. Close to the place I stay in central Mumbai is the Bicycle Corporation of India, in one of many by lanes of Worli. In the one and half a long time, I’ve walked previous the corporate, I haven’t seen any financial exercise occurring. Peepul bushes now develop from the partitions.

This is a few acres of property bang in the midst of Mumbai, a number of the costliest actual property on this planet, mendacity unused. This is legal to say the least. Another great instance of unused actual property is all of the MTNL places of work, all throughout Mumbai and Delhi.

2• It’s time to place these property to some use and for the federal government to earn some cash within the course of. It’s not simply the massive cities which have all this extra land mendacity unused. Even a hill-station like Ooty, has acres and acres of land mendacity unused due to the Hindustan Photo Films Manufacturing Company Ltd, which is basically not practical.

Given this, one of many first issues that the federal government needs to do is to make a list of all this land and put it up within the public area. Of course, this stock is just not going to be made in a single day and can take time. But it is necessary that that is accomplished in probably the most transparent method, on condition that corruption and land sales, nearly go hand in hand.

This is much more vital as a result of the federal government considers this route as an vital income within the years to come back. As the finance minister mentioned within the Budget that over time the federal government hopes to earn more cash “by increased receipts from monetisation of assets, including Public Sector Enterprises and land”. Hence, getting the method proper is essential. Any scandal can derail all the course of.

3• In instances the place the land was taken from state governments to begin a public sector enterprise, it is necessary that the land be returned to the state authorities and let the state authorities resolve what it desires to do with it. In the years to come back, state governments may also be working wanting cash to satisfy their expenditure. Also, that is the proper factor to do. The state authorities may also use the land to draw extra funding into the state. In some cities the place there aren’t sufficient public parks, some land may even go to develop such infrastructure. The goal shouldn’t be to maximise the cash earned on a regular basis.

4• There is one other issue that needs to be saved in thoughts right here. Real property costs in most huge Indian cities have remained and proceed to stay excessive. One of the main causes for this lies in the truth that the land costs stay costly throughout Indian cities. Hence, it is necessary that a few of this land be offered to construct inexpensive housing. Only if land costs come down, will residence costs come down.

Other than serving to individuals purchase inexpensive houses to stay in, the true property sector has the flexibility to create a giant variety of jobs in a short time. It additionally has the aptitude to have a multiplier impact throughout many different sectors. Building actual property requires cement, sand, metal, bricks, pipes, and many others., and so forth. Once the true property has been in-built, shifting into a residence requires its personal set of purchases. Buying houses additionally give a fillip to the house loans enterprise of banks and housing finance firms.

5• Finally, it is necessary that the cash earned by means of this route be used for a particular objective and never only for bringing down the fiscal deficit, which has ballooned to Rs 18.49 lakh crore or 9.5 p.c of the gross home product (GDP) this 12 months. The fiscal deficit is the distinction between what a authorities earns and what it spends and is expressed as a share of the GDP.

It is vital that cash coming from land sales be allotted in direction of particular infrastructure initiatives, ideally within the very state the place land is being offered.

To conclude, the monetisation of extra authorities land is a great idea. Having mentioned that, it needs to be executed in a correct course of-pushed and transparent method.

The author is creator of Bad Money.

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