Multicrore Land Scam in Andhra Pradesh

Cag report: The "benevolence" of the Congress Government in Andhra Pradesh in allocation of land (irregularly) for different purposes has caused enormous monetary loss running into several thousand crores of rupees between 2006 and 2011, the Comptroller and Auditor General (CAG) has said. Alienation/allotment of land by the AP Government during 2006-11 was characterised by grave irregularities, involving allotment in an ad-hoc, arbitrary and discretionary manner to private persons and entities at very low rates, without safeguarding the financial and socio-economic interests of the state, the CAG said in its audit report for 2010-11 which was tabled in the Assembly on Thursday.

Most of these allotments were made during the tenure of the late Chief Minister Y S Rajasekhara Reddy (who was in power between 2004 and 2009). In a large number of cases of land allotment, the State Government ignored the prescribed procedures and disregarded "canons of financial propriety", the CAG noted. Audit scrutiny revealed that undue benefit of Rs 1,784 crore was given to various entities and persons, due to the difference in the rates at which land was allotted and the market value as recommended by the District Collector concerned or the Empowered Committee (headed by the Chief Commissioner of Land Administration).

"During 2006-11, the State Government alienated/ allotted 88,492 acres of land to 1,027 beneficiaries. In the 11 sampled districts, 459 allotments were made, involving 50,285.90 acres of land. Of these, 409 cases were scrutinised in audit. "Audit found that land allotments for commercial purposes were not made in a fair, consistent and transparent manner so as to serve the public interest," the CAG observed. The Government was yet to realise the cost of land alienation in 60 cases in 11 districts, resulting in dues amounting to Rs 2,559 crore, the auditor said.

This was the first time that the CAG has come out with a comprehensive audit report on land allotments in AP even as the doles of the YSR Government remained a subject of major scandal and controversy in the last few years. Among the major findings of the CAG were the irregular allotment of thousands of acres of land to former Karnataka Minister Gali Janardhana Reddy's business ventures, the proposed Lepakshi Knowledge Hub in Anantapur district and the Vanpic port project, all of which incidentally are being probed by CBI as part of inquiry into the amassing of illegal wealth by YSR's son and Kadapa MP Y S Jaganmohan Reddy.

The CAG, in a way, endorsed the allegations levelled by all Opposition parties in the state over the allotment of land in total violation of rules. "An extent of 3,115.64 acres of land in Jammalamadugu mandal in Kadapa district was allotted to Brahmani Industries Ltd (of Gali Janardhana Reddy) for setting up a commercial airport and flying academy, in violation of Government of India's policy on setting up of commercial airports, and without verifying the suitability of the site and viability of the project. It overlooked the fact that the Kadapa airport was just 50 km away," the CAG report pointed out.

Although the land required for the proposed airport was only around 2,500 acres (as observed by Principal Secretary-Industries and Infrastructure Department), the extent of land alienated was 3,115.64 acres. Thus, an excess allotment of 615.64 acres was made in this case, it said. The decision to alienate land to Brahmani Industries (BIL) was taken by the Council of Ministers (headed by YSR) even though all the facts were brought to its notice by CCLA, who had also cautioned the Government against the viability of setting up a second airport in the same area, it said. Alienation of government land to BIL was thus injudicious and in violation of all the established rules and good practices. It clearly amounted to an undue favour to the company without any justification, the CAG observed.

Not stopping at that, another 10,760.66 acres of land in the same mandal was allotted to Brahmani Industries for a green-field Integrated Steel Plant. This involved illegal alienation of 674.58 acres of water bodies and allocation of 2 tmc feet of water from the Gandikota Reservoir without environmental clearance or independent examination of the project report. As of November 2011, even the first phase of construction had not been completed, the CAG noted. Favours under the YSR Government were also allegedly extended to Gali Janardhana Reddy's Obulapuram Mining Company (OMC), which has figured in illegal mining activities. The request of OMC, which had unauthorisedly occupied Government lands, for grant of lease of 413.81 acres was turned down by Anantapur District Collector in August 2008.

However, within a month thereafter, this position was reversed by the Collector who, at the request of state-run APIIC, recommended alienation of 304.66 acres of land (for transfer to OMC) for establishment of an industrial park. The reasons for reconsidering the lease or alienating the land were not recorded, the CAG observed. In another case, the Andhra Pradesh Industrial Infrastructure Corp (APIIC) irregularly executed a sale deed for 8844.01 acres of land in Anantapur district in favour of Lepakshi Knowledge Hub Ltd (LKH) even before creation of infrastructure by the developer. LKH did not establish any industry nor create any employment, but had mortgaged 4,397 acres of allotted land for obtaining loans to the tune of Rs 790 crore from different banks, it said.

The State Government lost revenue of Rs 874.03 crore by alienating 881.32 acres in Mamidipally Village, Ranga Reddy District to APIIC at a meager cost. APIIC, in turn allotted 500 acres of this land at very low rates to Indu Tech Zone and Brahmani Infra Tech even before orders of alienation were issued, the CAG said in another observation. The State Government has been a "mute spectator" to encroachment of its lands. Instead of instituting a mechanism for preventing and detecting illegal encroachments and dealing with them swiftly and effectively, in a sense, it has fuelled encroachments by regularising 14,878 of such unauthorised encroachments involving 21 lakh sq yards of land, collecting meager revenue of Rs 63.71 crore, the CAG maintained.

"The Comptroller and Auditor General of India has been pointing out, in his Audit Reports, year after year, several irregularities relating to allotment of land by the Government of Andhra Pradesh. The State Government, however, is yet to take corrective measures in this regard and come up with a comprehensive policy relating to alienation/allotment of land. The Government had also not formulated any land use policy defining its sector-wise priorities in utilisation/allotment of land for the present and future needs for socio-economic development of the state," the CAG report observed.