CAG Audit Exposes Weak Internal Controls in GNIDA

Strategic Insights -

The Comptroller and Auditor General of India (CAG) has revealed that the Greater Noida Industrial Development Authority (GNIDA) has been plagued by weak internal controls, leading to irregular land allotments, rampant encroachments on government land, and a systemic failure to maintain transparency and accountability. The audit report found that the authority had strayed from its founding mandate of promoting industrial development, instead functioning like a housing authority. The CAG's recommendations include fixing responsibility for the lapses, strengthening brochure approvals, enforcing escrow mechanisms, and instituting an effective internal audit regime.

Key Takeaways:

  • The CAG found that the land-allotment process in GNIDA was irregular and lacking transparency, with 30% of allotments made without applicants furnishing mandatory documents.
  • The audit quantified revenue impacts, recording a stamp-duty loss of Rs.40.76 crore to the state exchequer due to additional purchasable Floor Area Ratio (FAR) worth Rs.815.20 crore being allowed to builders without executing supplementary deeds.
  • The CAG found that GNIDA had diverted nearly Rs.1,180 crore to projects beyond its legal mandate, including a medical university, hospitals, colleges, SC/ST hostels, and offices for the District Magistrate and Senior Superintendent of Police.
  • The authority had no internal audit mechanism since its creation in 1991, allowing unchecked violations of rules and procedures.
  • GNIDA permitted institutional and commercial uses at concessional rates in some cases, further eroding revenues.
  • The CAG recommended fixing responsibility for the lapses, strengthening brochure approvals, enforcing escrow mechanisms, and instituting an effective internal audit regime.

Statistics:

  • 30% of allotments made without applicants furnishing mandatory documents.
  • Rs.815.20 crore additional purchasable Floor Area Ratio (FAR) allowed to builders without executing supplementary deeds.
  • Rs.40.76 crore stamp-duty loss to the state exchequer.
  • Rs.1,180 crore diverted to projects beyond GNIDA's legal mandate.
  • 170 allotments reviewed by the CAG, with 51 plots (30%) allotted despite applicants failing to furnish mandatory documents.

Sources:

  • Comptroller and Auditor General of India (CAG) report titled "Internal Control in Chapter VI report"
  • Hindustan Times report (permission granted by HT Digital Content Services)
  • Greater Noida Industrial Development Authority (GNIDA) official statements.