Odisha draws CAG flak for not revising concessional land rates

Tata Steel, Visa Steel, JSL benefited from land under-pricing

The office of the Comptroller & Auditor General of India (CAG) has rapped the Odisha government for extending undue benefits to industries by not revising concessional land cost since 2007.

The audit team observed that during 2007-12, 6,980.78 acres of government land was allotted to 76 industries, both to MoU (memorandum of understanding) signed companies and non-MoU based industries at concessional rate under the state’s Industrial Policy Resolution (IPR)-2007.

Besides, Odisha Industrial Infrastructure Development Corporation (Idco), the nodal agency for land acquisition, allotted 93.41 acres of land in industrial estates located in urban areas to 116 units at Rs 38.41 crore based on land cost prescribed by Idco, instead of the benchmark valuation of Rs 453.11 crore. The land was allotted during 2007-12.

“The audit noticed that though the benchmark value of private land for each district prescribed by the revenue & disaster management department was revised upwards by 10 per cent in every two years due to increase in land cost and by 30 per cent by March 2013, yet the concessional cost of land was not revised after 2007. For the purpose of fixing ground rent and cess of government, such benchmark value is also considered,” said a letter from the Accountant General’s office, Bhubaneswar.

The letter pointed out that the industries department in April 2010, had ordered allotment of land to industries in Bhubaneswar at benchmark valuation of the revenue & disaster management department and not at concessional rate of IPR.

Referring to the land allotment within the Kalinganagar industrial complex in Jajpur district, the audit observed Idco acquired 12,796.22 acres of government as well as private land, incurring an expenditure of Rs 127.12 crore. The land was developed by Idco and 5,618.59 acres of land were allotted to six MoU based industries — Brahmani River Pellets Ltd (BRPL), Visa Steel Ltd, Tata Steel Ltd, Uttam Galva Steels Ltd, Maithan Ispat Ltd and Jindal Stainless Ltd.

In the 21st meeting of the Industrial Infrastructure Advisory Committee (IIAC) of Idco in September 2004, land cost at the Kalinganagar complex was approved at Rs 3 lakh per acre. Between 2005 and 2012, no revision of land cost was made. Idco’s proposal to revise land cost to Rs 7.06 lakh per acre was not accepted by the industries department in December 2006.

Due to non-revision of land rates at the Kalinganagar complex, undue favour of Rs 21.40 crore was extended to these MoU signed industries calculated at 10 per cent appreciation per annum over the rate approved by IIAC.