GNIDA's Internal Controls Found Weak, Leading to Irregular Land Allotments and Revenue Losses

Strategic Insights -

The Comptroller and Auditor General of India (CAG) has conducted a performance audit of the Greater Noida Industrial Development Authority (GNIDA) and has flagged "weak internal controls" as a major issue. The audit report highlights irregular land allotments, rampant encroachments on government land, diversion of funds beyond its legal mandate, and a systemic failure to maintain transparency and accountability. The authority had shifted its focus from industrial development to residential projects, leading to a dilution of its founding mandate.

Key Takeaways:

  • The CAG found the land-allotment process "irregular and lacking transparency," with 51 plots (nearly 30%) allotted despite applicants failing to furnish mandatory documents.
  • The audit quantified revenue impacts, recording a stamp-duty loss of Rs.40.76 crore to the state exchequer and undue benefits of Rs.470.12 crore from fungible FAR and ground-coverage concessions.
  • The authority diverted nearly Rs.1,180 crore to projects beyond its legal mandate between 2007-08 and 2017-18, without an internal audit mechanism in place.
  • The Board lacked legal authority to divert funds, and regulatory non-compliance widened revenue erosion.
  • Scheme brochures offered FAR and ground coverage higher than notified Building Regulations, and the authority's reliance on older rules was rejected by the CAG.

Statistics:

  • 51 plots (nearly 30%) were allotted despite applicants failing to furnish mandatory documents.
  • Additional purchasable Floor Area Ratio (FAR) worth Rs.815.20 crore was allowed to 113 builders between January 2014 and March 2021 without execution of supplementary deeds.
  • Stamp-duty loss of Rs.40.76 crore was recorded to the state exchequer.
  • Undue benefits worth Rs.470.12 crore from fungible FAR and ground-coverage concessions were documented.
  • Revenue erosion due to regulatory non-compliance: nearly Rs.1,180 crore diverted to projects beyond the authority's legal mandate between 2007-08 and 2017-18.

Sources:

  • "Internal control in Chapter VI of audit report", Comptroller and Auditor General of India (CAG)
  • Published by HT Digital Content Services with permission from HT Noida & Ghaziabad