‘Asset Monetisation’ not ‘privatisation’: well, it’s the land, stupid!
Railway Minister is vehement in saying there will be no privatisation of the Railways. But the ministry is preparing to ‘monetise assets’, a euphemism for selling the vast unused land at its disposal
Land comes in the State List of the Constitution of India and without concurrence of the states and sharing the proceeds of monetisation with them (the states concerned) the central government may find it difficult to proceed with privatization. Land was acquired for the PSUs by the states and people were ousted and rehabilitated by the states in ‘public interest’.
Official sources maintain that the proposed monetisation of public assets, which include roads, freight corridors and airports, is intended to convert unutilised public assets into economic value and garner financial resources for modernization and upgradation of the public assets. This process of monetisation will involve parternership with private investors. The government’s input will possibly include unutilised or surplus land and its economic utilisation by private investors in lieu of sharing profits or proceeds.
Other gains, according to the government, will help fund the national infrastructure to reduce pressure on the exchequer and the taxpayers. This process will be completed in five years and NHAI intends to raise one trillion rupees from demonetisation of its assets.
The earlier attempt to monetise public assets initiated first in 1993 to monetise unutilised and surplus land assets, had come a cropper following resistance by state governments. States wanted a share in the reuse of such land for development in the concerned areas. The Union Government would insist that proceeds of monetisation would go to the national kitty for the country’s development. However, the proposal to monetise strategic defence cantonment land, strategic major port land and air space on railways was put in cold storage on security grounds at the instance of MHA. A restaurant on rooftop (air space) of Churchgate station in Mumbai, started by the then Railway Minister Madhavrao Scindia in 1986 by a private enterprise was dismantled after three years following advice of the MHA. Ministry of Railways, however, monetized part of its unutilized land in Mumbai and Ministry of Surface Transport part of similar strategic land of Calcutta Port. Thereafter, there has been no progress in the monetization drive although Ministry of Railways went ahead and set up the Railways Land Development Authority.
Indian Railways have 47,000 hectares of sub-optimally used/unutilised/surplus land and idle airspace. Its monetisation can go ahead within the frame of its futuristic requirements for expansion, upgradation and modernisation. But one suspects not enough thought has been given on how the government will navigate the challenges.