Karnataka plans to monetise panchayat assets

Bengaluru: Karnataka is evaluating a policy to monetise assets available with rural local bodies, which Rural Development & Panchayat Raj (RDPR) Minister Priyank Kharge said will be the first such attempt in India to raise resources. 

Priyank has given consulting giant Deloitte a brief to work on and the policy “should be ready by March or April”, the minister told DH. 

“The idea is to figure out how we can generate additional resources for panchayats,” Priyank said. 

Karnataka has 6,000 gram panchayats that own many assets. With the new policy, the government wants to “unlock” the revenue potential of these assets. 

Karnataka has an estimated 1.5 crore rural properties that come under panchayat limits. “The revenue potential only by tax collection is Rs 2,000 crore,” Priyank said, adding that the government will have to work out the revenue potential from asset monetisation.

“First, we need to map assets and bring all of them under the tax bracket. Then, we have to figure out assets that can be monetised.” 

Under the proposed monetisation measure, the government wants to look beyond the traditional model of leasing out public assets, Priyank said. Some ideas are being explored. 

“There is a footwear cluster in Athani. We can provide them space for warehousing. The panchayat will be a partner in whatever income they make,” Priyank said. 

In Kalaburagi, Ravoor village can become a hub for trucks that ply to Wadi. “The panchayat can make a truck terminal with services the truckers require. This can become a business for the panchayat,” the minister explained. Panchayat spaces can also be given out for Nandini milk parlours to be set up, he added.  In 2021, the Union government issued an advisory urging gram panchayats to consider asset monetisation. Also in 2021, the Union government rolled out its ambitious National Monetisation Plan (NMP) aimed at leasing out core infrastructure assets to private players to generate Rs 6 lakh crore over a period of four years. 

“But I don’t think the NMP includes panchayats,” Priyank said. “What we are attempting has not been done anywhere in the country.”