Gujarat Govt denies giving "undue benefits" to corporates

Last Updated: Wed, Apr 03, 2013 22:33 hrs

Ahmedabad: Gujarat government today refuted the findings of the Comptroller and Auditor General of India (CAG) that the state government had offered "undue benefits" in land allotment to certain corporates.

The CAG report, which was tabled yesterday in the state assembly, had led to an uproar with the auditor stating that companies like Essar Steel, automaker Ford India and engineering and construction major Larsen and Toubro among others benefitting from the government's largess.

The state government today said the joint venture of Larsen and Toubro, Mitsubishi and Nuclear Power Corporation of India were given land at Hazira for their critical steam generator and nuclear forging plant and that it was wrong to say that it was given 30 per cent concession amounting to Rs 128 crore by the government.

"This is an engineering project involving high-tech technology and critical for the country's nuclear power generation programme. The decision to provide 30 per cent concession in the cost of the land to the country's engineering unit serving the nuclear power sector was a conscious one taken by the state government," a statement issued by the government said.

"In the engineering units, total capital investment is low but employment potential is high compared to others. A country's manufacturing strength is measured by its strength in engineering manufacturing sector," the statement argued.

Regarding "undue benefits" in land allotment to corporate giants, the state government said it had adopted a transparent policy in the process and evaluation of land allotment to industries.

"Valuation of government land is done systematically and scientifically in the state. After valuation by the state level committee, it is put up before the state cabinet which arrives at the final decision," state government spokesperson and Energy Minister Saurabh Patel said in the statement.

"How the valuation has to be done at different stages based on various parameters have been specifically and clearly laid down in the government resolutions. Looking at the specific needs, the state government has got the prerogative in finalising the cost of the land. But, in Gujarat, very rarely, there is a deviation from the well-established principle, except for innovative projects crucial to the state's growth," the statement pointed out. 

the statement argues it is a question of interpretation by the state government and the CAG.

The government considers that costing of land for housing colonies for labourers should not be equated with land given for industrial purpose, it said.

Reliance was given land at Rs 420 per sq mtr for constructing a housing colony for industrial labourers and the CAG report said 30 to 40 per cent increase should have been included in the costing because land was for industrial purpose and the deal caused a loss of Rs 2.03 crore to the state government.

The Gujarat government's press statement also said that instead of undertaking an "objective audit" of the land allotted to various companies, the CAG has carried out a "subjective audit".

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