Land compensation money parked in bank accounts for over 14 yrs

Finance dept livid, calls for monitoring mechanism

The Comptroller & Auditor General of India (CAG)’s report on coal block allocation might have stirred up a storm in the entire country, but when it comes to the state, similar exposures by CAG on different irregularities hardly wakes up the government to take any corrective action.

One such irregularity in Odisha relates to payment of compensation for land acquisition, a sensitive issue stalking many big ticket projects in the state.

CAG in its report for 2010-11 revealed that 10 land acquisition officers (LAOs) had kept advance land acquisition compensation money, amounting to Rs 2,016.69 crore, in bank accounts, instead of depositing it as civil deposits under a government account.

These land acquisition cases were those of mega projects proposed by Posco India, Essar Steel and Dhamara Port Company Ltd (DPCL).

Even after the CAG stricture, unauthorized retention of advance land acquisition, establishment contingencies and interest accrued thereon in bank accounts has not stopped, inviting the wrath of the finance department.

J K Mohapatra, the state finance secretary a recent letter to Taradatt, secretary (revenue & disaster management), pointed out, "The collector of the district will be personally held responsible in case it is detected in the future that the advance of compensation amount and balance establishment contingencies creditable to the government account are unauthorizedly kept in any bank account. I would therefore request you to put in place a suitable monitoring mechanism to guard against unauthorized retention of funds in bank account and issue necessary instructions to the concerned officers to adhere to the instructions issued earlier and ensure that the money kept in bank account along with interest accrued thereon is brought back to government account”.

Stating that such unauthorized retention of funds in bank accounts has a cost implication for the state exchequer, Mohapatra held that violation of the approved accounting procedure is also fraught with the risk of diversion and mis-utilization of funds.

According to the accounting procedure rules for land acquisition contingencies circulated in the erstwhile revenue & excise management department (March 1998), only five per cent of the establishment contingencies is to be retained by the collectors/SLAOs in bank account.

Except for the above amount, the advance received towards land acquisition compensation and the balance amount from the establishment contingencies received from the requisitioning authorities are to be deposited in the government account.

It may be noted, such irregularity in utilization of land compensation money has been continuing unabated in the state since 1998. This is revealed from a letter written on September 9, 1998 by Mohapatra, who was then the secretary of revenue & excise management department.

"I am directed to say that instances of deposit of huge amount of money received by the collectors for different purposes in bank accounts have come to the notice of the government. A major part of such deposits relates to advances received on account of compensation and establishment contingencies of land acquisition cases. It has also been noticed that for opening of such bank account, government approval has not been obtained”, Mohapatra had written to all district collectors and special land acquisition officers (SLAOs).

He had also urged the district collectors and SLAOs to discontinue the practice of depositing land acquisition compensation and contingency money in bank accounts.