CAG Report Uncovers Widespread Land Allotment Irregularities in Telangana
The Comptroller and Auditor General (CAG) has exposed multiple serious irregularities in land allotments conducted by the Telangana State Industrial Infrastructure Corporation (TGIIC). The audit report, tabled in the state assembly, highlights a significant concession granted to Adani Defence Systems and Technologies Limited (ADSTL) and numerous other instances of land being allotted at below-market rates, resulting in substantial revenue loss to the government.
Undue Benefit to Adani Defence Systems
According to the CAG findings, 20 acres of land were allotted to ADSTL at a highly concessional rate of Rs 40 lakh per acre. This was done despite the prevailing market rate being approximately Rs 2.13 crore per acre. The report states that ADSTL had initially requested 50 acres in the Hardware Park (Phase II) at Mamidipally near Shamshabad.
The cabinet sub-committee (CSC) had agreed to the allotment but explicitly recommended that the company relocate its project to the Aerospace Park at Kongarakalan to qualify for concessional pricing. However, in a clear deviation from this recommendation, the industries department and TGIIC proceeded to allot the land at the Mamidipally hardware park itself at the concessional rate.
The CAG strongly criticised this decision, stating that the industries and commerce department violated the CSC's directive. The department attempted to justify the allotment by citing the need to utilise resumed land and existing structures at the hardware park. However, the audit found this explanation "neither acceptable nor justifiable," emphasising that concessional pricing was explicitly conditional upon relocation to Kongarakalan. The report described this move as an undue benefit extended to ADSTL and noted that any such deviation should have been formally referred back to the cabinet committee for approval.
Multiple Instances of Below-Market Allotments
The audit identified several other concerning cases of land being allotted at rates significantly below market value across various locations in Telangana. These irregularities span multiple industrial parks and zones, indicating a systemic issue.
- Vem Technologies Pvt Ltd was allotted 511 acres in the National Investment and Manufacturing Zone (NIMZ) at Zaheerabad in January 2021 at just Rs 10 lakh per acre. This was done without following the mandated procedure, which requires approval from a committee of secretaries for allotments exceeding 50 acres.
- In the Industrial Park at Gachibowli, Bhagwati Products Ltd (Micromax) was allotted land at Rs 10.05 crore per acre, despite the prevailing basic market value being Rs 14.52 crore per acre. The audit noted this was done without due diligence and in violation of allotment regulations.
- Based on the rate offered to Micromax, an additional 2.68 acres of prime land were subsequently allotted to mobile manufacturing companies Celkon and Karbon. Notably, the rate used for Micromax itself had been derived from an earlier allotment to Bank of Baroda in August 2013.
- Welspun Group of Companies (WGC) was allotted land for manufacturing technical textiles at the Industrial Park in Chandanvelly at Rs 13.73 lakh per acre. The audit calculated that, considering internal infrastructure development costs borne by TGIIC, the land should have been priced at Rs 22.54 lakh per acre. This discrepancy resulted in a revenue loss of Rs 33.04 crore to the government.
- In the Plastic Park at Mankhal (Expansion), Chiripal Poly Films Limited (CPFL) was allotted 30 acres at Rs 35 lakh per acre.
Policy Violations and Unauthorised Extensions
The CAG report also revisited the Electronics and Hardware (EH) policy, introduced in July 2012 by the then united Andhra Pradesh government. This policy aimed to incentivise electronic hardware companies and included provisions for concessional land allotment to a maximum of 25 companies on a first-come, first-served basis, covering about 125 acres.
However, the audit found that the industries department extended these benefits unauthorisedly to 39 companies, allotting a total of 169 acres at concessional rates ranging from Rs 60 lakh to Rs 90 lakh per acre. This was done against prevailing market rates of Rs 1.58 crore to Rs 2.14 crore per acre, representing a significant deviation from the policy's intended scope.
Failure to Enforce Penalties and Procedural Lapses
The audit revealed further lapses in enforcement and procedural consistency. Notably, three companies—Micromax, Celkon, and Karbon—had failed to establish their manufacturing units even after five years, as of December 2022. Despite this significant delay, TGIIC neither imposed the applicable penalty of Rs 1.60 crore nor resumed the allotted land, raising questions about accountability.
In another case involving KAP Steel Limited (KSL), which was later renamed JCK Infra Projects Limited (JCKIPL), procedural norms were violated. The company had been allotted 84.88 acres in the Industrial Park at Kothur for steel manufacturing. This allotment was cancelled in August 1998, and the land was resumed in phases between September 1999 and August 2003.
As per established norms, once land is resumed, any request for restoration should be treated as a fresh application and priced at prevailing market rates. However, TGIIC subsequently allotted 39.27 acres of this resumed land to other parties, demonstrating inconsistencies in following proper procedure.
The comprehensive CAG report paints a picture of widespread irregularities in Telangana's industrial land allotment processes, highlighting significant revenue losses to the state exchequer and undue benefits to private companies. The findings call for stricter adherence to policies, transparent procedures, and enhanced accountability in land management practices.
