The auditor flagged that 55.89 acres of water bodies within the project site were included in the land price calculation, violating the Corporation’s own pricing policy
The Comptroller and Auditor General (CAG) has flagged a loss of Rs 12.86 crore to the West Bengal Industrial Development Corporation Limited (WBIDCL) in the allotment of land to Instakart Services, the logistics arm of e-commerce major Flipkart, at the Haringhata Industrial Park in Nadia district.
The finding is part of the CAG’s 2024 report on Public Sector Undertakings for the period ending March 31, 2023, which was tabled in the West Bengal Assembly by the BJP government on Friday. The report noted that the erstwhile Trinamool Congress (TMC) government had not tabled CAG reports for four financial years up to 2024-25.
According to the auditor, WBIDCL incurred the loss after computing the base price of the land without excluding large water bodies within the project site, a move that deviated from the Corporation’s own pricing policy.
Land Acquisition and Allotment
The report said the Mamata Banerjee-led then West Bengal government decided in August 2017 to transfer 1,326.93 acres of land to the Industrial Development Corporation for industrial purposes. A month later, the Corporation decided to develop an industrial park at Haringhata in phases.
The state government sanctioned Rs 206.73 crore towards the cost of acquiring 358.19 acres of land. The amount was paid to the Land and Land Reforms and Refugee Relief and Rehabilitation Department in March 2018, and the Corporation took possession of the land in October 2018.
In August 2018, WBIDCL floated an expression of interest inviting investors for the Haringhata Industrial Park, fixing the land price at Rs 63.49 lakh per acre for a 99-year lease on an “as-is-where-is” basis.
Instakart Services applied in September 2018 for 107.35 acres to establish a regional distribution centre, proposing an investment of Rs 991 crore. WBIDCL’s board approved the proposal in October 2018, while the state Cabinet’s Standing Committee on Industry cleared the allotment in December 2018.
The CAG’s Findings
During scrutiny of the transaction in December 2022, the CAG found that the layout plan of the Haringhata Industrial Park included 55.89 acres of water bodies, which could not be used for industrial development. As a result, the actual allocable land at the park was only 302.299 acres, instead of the full 358.19 acres used by WBIDCL while calculating the per-acre land price.
The auditor pointed out that under WBIDCL’s own pricing policy, the base price should be calculated by dividing the land acquisition cost along with a 10 per cent administrative charge by the allocable land area alone.
Using that formula, the CAG recalculated the base price at Rs 75.23 lakh per acre, compared with the Rs 63.49 lakh per acre actually charged. On that basis, the lease premium payable by Instakart for 109.12 acres should have been Rs 82.09 crore, whereas WBIDCL collected only Rs 69.23 crore, resulting in a shortfall of Rs 12.86 crore.
Government Response and CAG’s Rebuttal
The state government, in its response submitted in May 2023, said Industrial Development Corporation’s board had approved the base price of Rs 63.49 lakh per acre in July 2018 after detailed discussions and that the state Cabinet had also approved the allotment on that basis.
The CAG, however, rejected the explanation, stating that the government had not clarified why the Corporation’s own pricing policy was not followed. It reiterated that the 55.89 acres identified as water bodies could not be allotted for industrial development.
The auditor also referred to the West Bengal Inland Fisheries (Amendment) Act, 1993, which prohibits filling up water bodies for construction without prior approval from the state government, and cited a November 2019 Supreme Court order relating to schemes that extinguish local water bodies.
