Land undervalued to favour industries: CAG

The State Government has shown undue favour to promoters of industries to the tune of Rs 224 crore by under-assessing the value of private land resulting in low compensation to the land losers.

Pointing out the erroneous fixation of land price, the Comptroller and Auditor General (CAG) said over 4,003 acres of private land was acquired between 2006-07 and 2010-11 for 10 private industries and the Infrastructure Development Corporation of Orissa (IDCO) at a cost of Rs 318.38 crore.

Verification of records from the offices of the concerned sub-registrars revealed under-assessment of compensation by Rs 224.29 crore due to fixation of the land value much below the market price prevailing at the time of acquisition.

“The land-losers received the compensation under protest and represented

to the concerned district collectors for payment of due compensation,” the report said.

As per Section 23 of the Land Acquisition (LA) Act, the land acquisition officers (LAOs) are required to consider the highest market value of similar land in the village on the date of publication of the notification under Section 4 (1) of the Act.

In case of non-availability of sales statistics of the concerned village, the latest sales prices of the nearby villages are to be taken into consideration.

The Supreme Court had ruled that the determination of market value of the land to be acquired on average price basis was not proper. The market value prevailing on the date of publication for acquisition of land should be the best guidance value, the report said.

After test check of 208 land acquisition cases in districts of Bhadrak, Ganjam, Jagatsinghpur, Kalahandi, Sambalpur and Puri, the audit detected that in 35 LA cases involving 4,003 acres, the land acquisition officers have under-assessed the compensation by Rs? 224.29 crore.

Adoption of average price method instead of the highest sales statistics, arbitrary rejection of higher sale instances and short calculation of additional compensation have led to fixation of price much below the market price.

Private land owners who suffered maximum loss due to erroneous fixation of land price belong to Jagatsinghpur district. The major beneficiaries are Posco India, Essar Steel and IFFCO.

In two land acquisition cases by IDCO, the audit pointed out that private land owners received Rs? 148 crore less compensation due to fixation of price below the market price. The land was acquired for development of township and ancillary industries near the Posco area.