Friday, January 25, 2013

MP Government's policy of allowing private companies to mortgage Government land - An innovative nightmare?

"The Madhya Pradesh government approved a policy that would allow private companies to mortgage government allotted land for investment purpose. ...state government will also be a party in any court if any agency claim any dues on the leased land... ...In case of default of loan the mortgager will recover dues from the immovable properties and assets first and later will use the land if no other option is left..."

In MP, private firms can now mortgage govt land - Business Standard, The Hindu

Which bank in the world will give loan over the security of leased land? How many genuine companies will apply and get this facility? Assume that some bank gave money and the company which availed this facility suddenly disappeared, then who will pay back the loan? Everybody knows how much time it will take for a shell company to form and destruct. Innovative ideas are good, but not the one which are self destructive.

No comments:

Post a Comment