The Comptroller and Auditor General of India (CAG) has made scathing observations on the state-run Maharashtra Industrial Development Corporation (MIDC) over the allotment of plots and lands, fixation of land rates, faulty policy for revision of water and services charges, and unauthorized sub-lease and change in use of allotted plots.
CAG report, which was tabled in the state assembly by Deputy Chief Minister Ajit Pawar, who holds finance and planning departments, said MIDC made direct allotment of plots to ineligible allottees contrary to the laid down policies (e-bidding, waiting list, priority and expansion). Further, allottees were issued offer letters for allotment of land despite the non-availability of carved-out plots in violation of MIDC Regulations. Instances of undue concession to allottees in the recovery of revenue from lease premium, transfer charges, Urban Land Ceiling (ULC) Exemption transfer charges, extension charges, and sub-letting charges were observed. Irregular grant of installments for payment of lease premium and non-forfeiture/refund of lease premium in violation of regulations/policy was also observed.
‘’There was an absence of an effective system to monitor cases of non-development of plots/obtaining Building Completion Certificate (BCC) within the stipulated time limit. MIDC also did not initiate prompt action for the resumption of plots and timely issue of notices for recovery of extension charges. MIDC may implement an efficient and effective Information Technology (IT) based monitoring system for automatic generation of notices to allottees who had failed to develop plots/obtain BCC within the stipulated development period,’’ said CAG.
CAG has suggested that MIDC may ensure prompt recovery of dues from allottees as per laid down policies and responsibility needs to be fixed for granting undue concessions to allottees. The Performance Audit (PA) was conducted to cover the aspects of MIDC related to corporate governance, planning, development of industrial areas (IAs), land acquisition, pricing and allotment, recovery of charges, and monitoring system for development and utilization of plots during the period 2014-15 to 2020-21.
The Board of MIDC took important decisions having financial implications overriding the extant rules/policy in cases of land allotment, levy of lease premium/transfer charges/extension charges, and sub-letting charges in favor of private parties. Relaxation in rules/policies on a case-to-case basis lacked transparency and brought in arbitrariness in decision-making and governance- causing loss to the public exchequer.
CAG has suggested that MIDC may ensure strict implementation of regulations and laid down policies in the land allotment and recovery of charges.
CAG observed that MIDC did not formulate any program/plan for the achievement of targets set in the State Industrial Policy (SIP). MIDC also did not have a perspective plan for land acquisition, development, and allotment activities in industrial areas detailing physical targets to be achieved. Land acquisition and industrial development activities of MIDC, thus, did not emerge out of a systematic and comprehensive plan. In the absence of any physical targets, there was no benchmark to assess the performance of MIDC.
CAG has called for MIDC to prepare the Perspective Plan and Annual Plan as per the SIP, quantifying physical targets to be achieved.
Further, MIDC allotted land to prospective entrepreneurs considering, inter alia, proposed investment and employment generation mentioned in the Detailed Project Reports (DPR). There was, however, no database/system to ascertain/record allottee-wise details regarding actual employment generated and investment made by an allottee vis-a-vis the DPR. MIDC, thus, confined its role to the development/allotment of land in industrial areas and an outcome-based approach to industrial development (investment and employment generation) was lacking.
CAG has recommended that MIDC evolve a system of recording/monitoring of actual investment and employment generation by allottees vis-a-vis their DPRs to ensure that expected outcomes of industrial development from such land allotment are achieved.
MIDC had not formulated any action plan/system for the acquisition of surplus/unutilized land with the allottees, for allotment to new entrepreneurs as envisaged in Section 42A of the MID Act. Thus, MIDC did not ensure optimal utilization of IAs as mandated in the MID Act. Action, as stipulated under the MID Act for reporting and acquisition of surplus/unutilised land with allottees, may be initiated.
MIDC did not ensure timely finalization of tenders within the validity period as per the delegation of powers which resulted in cancellation of tenders and re-tendering at extra cost. MIDC may ensure the timely finalization of tenders within the validity period in accordance with the delegation of powers to avoid re-tendering of works.
CAG has claimed that the policy of fixation/revision of land rates was not appropriate. Systemic delays in the implementation of revised land rates were observed leading to loss to MIDC. MIDC may ensure that revised land rates are implemented immediately after approval of the Board and a suitable clause regarding recovery of lease premium at revised rates may be incorporated in the offer letters.
According to CAG, the lack of a system for periodic revision of water charges and service charges from the allottees was observed which led to a short recovery of expenses. MIDC may ensure timely revision of water charges and service charges and responsibility needs to be fixed for non-implementation/withdrawal of revised rates leading to financial loss to the Corporation.
MIDC had not levied and recovered Goods and Services Tax on non-exempted services from the plot holders leading to non-payment of statutory
Instances of unauthorized sub-lease and change in use of allotted plots, lack of a system for monitoring, removal of encroachments and irregular allotment of land to encroachers was observed. MIDC may formulate a time bound action plan for eviction of encroachments and demolition of illegal constructions from encroached properties and responsibility needs to be fixed for failure to prevent/demolish encroachments and irregular allotment of land toencroachers.
Audit observed that during the period 2014-21, GoM did not appoint seven out of 15 members to the Board of MIDC. GoM may ensure that vacancies of Board members of MIDC are filled up without delay.
As an independent media platform, we do not take advertisements from governments and corporate houses. It is you, our readers, who have supported us on our journey to do honest and unbiased journalism. Please contribute, so that we can continue to do the same in future.
