CAG pulls up MIDC

 

 

 

 

 

In its latest report tabled in the State Legislature on the last day of Winter Session on Wednesday, the Comptroller and Auditor General (CAG) has pulled up Maharashtra Industrial Development Corporation on several points. As per the CAG report, MIDC ‘confined’ its role to development/allotment of land in industrial areas and outcome-based approach to industrial development involving details of investment and employment generation was ‘lacking’. The CAG’s Performance Audit of the role of MIDC in industrial development of Maharashtra makes several revelations regarding the lack of not only systemic and systematic approach but also vision and plan for industrial development. The audit was conducted to cover the aspects of MIDC related to corporate governance, planning, development of industrial areas, land acquisition, pricing and allotment, recovery of charges and monitoring system for development and utilisation of plots during the period 2014-15 to 2020-21. A shocking revelation is that the Government of Maharashtra did not appoint seven out of 15 of the members to the Board of MIDC during the period from 2014 to 2021.

 

The MIDC Board, working with almost half of its strength, also 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, observes the audit report. Further, MIDC ‘did not formulate’ any programme/plan for achievement of targets set in the State Industrial Policy (SIP). It 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,” observes CAG report, without mincing any words. As far as land allotment is concerned, MIDC made allotments to prospective entrepreneurs considering, inter alia, proposed investment and employment generation mentioned in the Detailed Project Reports (DPR). However, there was no database/system to ascertain/record allottee-wise details regarding actual employment generated and investment made by an allottee vis-a-vis DPR. Thus, observes the report, MIDC ‘confined’ its role to development/allotment of land in industrial areas and outcome-based approach to industrial development including investment and employment generation was ‘lacking’.

 

Also, MIDC did not formulate any action plan/system for acquisition of surplus/unutilised land with the allottees for allotment to new entrepreneurs as envisaged in the Maharashta Industrial Development (MID) Act. CAG has pointed out that four policies implemented by MIDC for development/disposal of plots in industrial areas -- allotment rate, grant of possession of plot, mixed land use on industrial plot and recovery of arrears as land revenue -- ‘contravened express provisions’ of the MID Act, MIDC Disposal of Land Regulations, 1975, and Development Control Regulations, 2009. There are other aspects too, on which CAG observations come as scathing indictment of working of MIDC. As per the audit report, MIDC did not ensure timely finalisation of tenders within the validity period as per delegation of powers, resulting in cancellation of tenders and re-tendering at extra cost. The policy of fixation/revision of land rates was ‘not appropriate’. The audit also observed ‘systemic delays’ in implementation of revised land rates.

 

There were instances of undue concession to allottees in recovery of revenue from lease premium, transfer charges, Urban Land Ceiling (ULC) exemption transfer charges, extension charges and sub-letting charges. The audit also observed ‘irregular grant of instalments’ for payment of lease premium and ‘non-forfeiture/refund of lease premium’ in violation of regulations/policy. CAG has pointed out ‘lack of system’ for periodic revision of water charges and service charges from the allottees leading to short recovery of expenses. Also, the audit found that MIDC had not levied and recovered Goods and Services Tax on non-exempted services from the plot holders leading to non-payment of statutory dues. There was ‘absence of an effective system’ to monitor cases of non-development of plots/obtaining Building Completion Certificate within the stipulated time-limit. Also, MIDC ‘did not initiate prompt action’ for resumption of plots and timely issue of notices for recovery of extension charges. CAG report also points out instances of change in use of allotted plots, lack of system for monitoring, removal of encroachments and irregular allotment of land to encroachers.