Tuesday, May 17, 2022
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Government can sell the company to the Ministry of Railways, the process will start this month

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The central government is trying to meet the disinvestment target at the earliest. The government can sell its stake in any other government company in the current financial year. Actually, the Union Cabinet may soon cut the land license fee of Indian Railways. According to the report of Business Today TV, the government may consider the proposal of the Finance Ministry to reduce it from 6 percent to 3 percent. According to sources, the move will help in facilitating the privatization of the state-run Container Corporation of India Limited (Concor).

In 2021, the Ministry of Railways released a draft note on the land lease policy, which suggested a 2% reduction in land license fee. According to sources, “It was approved by the Finance Ministry last year. It is expected to get cabinet nod by the end of this month.”

Explain that in April 2020, the Railways notified the land license fee regime for industrial use of its land and extended it to CONCOR. Until then, CONCOR had paid land rents to transporters on a per-container (20-foot equivalent unit container) basis with lower costs. License fee is the annual fee charged by the Indian Railways for the use of land owned by a national transporter.

In November 2019, the Union Cabinet approved the disinvestment of the government’s 30.8 per cent stake in the company along with the transfer of management control. Subsequently, the new land licensing fee policy in 2020 increased the cost of CONCOR and created a hostile environment for investors to acquire.

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