Centre firms up new land-transfer norms to help public asset monetization

What Happened

• The Department of Expenditure under the Ministry of Finance issued an Office Memorandum (O.M. No. 15(04)/2021-E.II(A)) dated May 5, 2026, amending Rules 309 and 310 of the General Financial Rules (GFR), 2017, to establish a consolidated, uniform framework for the transfer and alienation of Central Government land.
• The amended Rule 310 replaces the earlier "no profit no loss" principle for inter-government land transfers with a structured valuation-based regime governed by the newly inserted Appendix-7A and Appendix-7B of the GFR.
• The National Land Monetization Corporation (NLMC) has been designated as the primary authority for determining land value in these transactions; CPWD may also be engaged for valuation in certain cases.
• A "long-term lease" is now formally defined as a lease of 30 years or more, while a "short-term lease" covers any period less than 30 years — removing definitional ambiguity that previously slowed approvals.
• The revised norms cover sales and leases of Central Government land to other government departments, Central Public Sector Enterprises (CPSEs), state governments, and private entities, creating a single procedural pipeline for all categories.

Static Topic Bridges

Asset Monetisation and the National Monetisation Pipeline (NMP)

Asset monetisation refers to the process of generating value from existing government-owned infrastructure and non-core assets — primarily through structured long-term leases to private operators — without transferring ownership. The National Monetisation Pipeline (NMP) was launched on August 23, 2021, by NITI Aayog in consultation with line ministries, as a four-year roadmap (FY2022–FY2025) to generate approximately Rs 6 lakh crore by leasing core infrastructure assets across roads, railways, power, oil and gas pipelines, and telecom. The NMP envisages "structured contractual partnership" (not privatisation) as its central model.

National Land Monetization Corporation (NLMC)

The NLMC is a Special Purpose Vehicle (SPV) wholly owned by the Government of India, conceptualised in the Union Budget 2021-22 and formally approved by the Union Cabinet on March 9, 2022. Incorporated in June 2022, NLMC functions under the administrative control of the Department of Public Enterprises, Ministry of Finance, with an authorised share capital of Rs 5,000 crore and initial paid-up capital of Rs 150 crore. Its mandate is to professionally monetise surplus land and building assets of CPSEs — particularly those under strategic disinvestment or closure — and to serve as a repository of best practices in land monetisation.

General Financial Rules (GFR) 2017

The GFR, 2017 is the primary set of rules governing financial management and public procurement in the Central Government, issued by the Department of Expenditure, Ministry of Finance. Rule 309 deals with the management of government land and buildings; Rule 310 specifically covers the transfer of land from one government entity to another. These rules bind all central ministries, departments, and CPSEs in their financial operations. Amendments to GFR require Finance Minister approval and are notified via Office Memorandum.

Key Facts & Data

• Office Memorandum: O.M. No. 15(04)/2021-E.II(A), dated May 5, 2026
• Rules amended: Rules 309 and 310 of GFR, 2017
• New appendices: Appendix-7A and Appendix-7B added to GFR
• Primary valuation authority: National Land Monetization Corporation (NLMC)
• Long-term lease defined as: 30 years or more
• Short-term lease defined as: Less than 30 years
• NLMC approved: March 9, 2022; Incorporated: June 2022
• NLMC authorised share capital: Rs 5,000 crore; Paid-up capital: Rs 150 crore
• NMP launched: August 23, 2021; Target: Rs 6 lakh crore (FY22–FY25)
• NMP 3-year achievement: Rs 3.85 lakh crore monetised
• NMP 2.0: Launched February 2026