Odisha: CAG Report Claims ‘Abrupt Decline’ In Grade Of Iron Ore Post Auction, Lapses In Land Acquisition

Bhubaneswar: There was an “abrupt and abnormal decline in the grade of iron ore and its classification” six iron-ore mines in Odisha after the auction, the Comptroller and Auditor General of India (CAG) has observed.

“The decline of grade of iron ore has resulted in a revenue implication of approximately Rs 4,162.77 crore for the financial years 2020-21 and 2021-22 in the form of lesser royalty and premium (post auction),” said the report laid before the Odisha Assembly on Wednesday.

Stating that it is “highly improbable”, the report attributed the sharp decline in the grade of iron-ore within a short period of one or two years to possible misreporting by new lessees to avoid higher royalty and premium payable on higher grades.

The state government has formed a committee led by the director of mines and geology to study the discrepancy in downgrading and misreporting of size of ore and the committee observed downgrading of ore in three leases and discrepancy in size of ore in six leases. “On account of the violation, the government has demanded an amount of Rs 471.48 crore from the lessees, who have preferred revision of the cases before the revision authority,” it added.

 Major lapses in land acquisition procedures

The CAG found that the previous government had violated the prior consent of gram sabha norm for acquisition of land in scheduled areas in a large number of cases between 2017-18 and 2021-22.

Preliminary notifications for acquisition of land issued without conducting gram sabha meetings in 126 out of 294 cases. In ten cases, the meetings were held after the notification was issued, the audit of land acquisition in Kalahandi, Keonjhar, Koraput, Mayurbhanj, Nabarangpur and Sundargarh districts revealed.

The report further stated that social impact assessment (SIA) was not carried out in 44 of 254 cases. These were among the 312 land acquisition cases, which included 58 cases relating to irrigation projects, test-checked by CAG.

It also found irregularities in payment of compensation to the displaced and affected families. Preliminary notifications for acquisition of 82.852 acre land for three projects was issued after lapse of about one and half years from the stipulated 12 months  from the date of appraisal of the SIA report by an expert group in accordance with Section 11 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act, 2013.

In Sundargarh district, the benchmark value despite being higher than the average sales value of similar category of land in other districts was not considered for determination of the market value of land. This led to under assessment of  amount of compensation by Rs 5.27 crore. In 179 cases, involving acquisition of 3,055.583 acre land, the compensation amount of Rs 120.94 crore could not be disbursed as land records were not updated.

Also Read: Odisha Govt Paid Over Rs 782 Cr To 12.72 Lakh Ineligible Beneficiaries Under KALIA Scheme: CAG Report

Biju Expressway: Undue benefit to concessionaire on inflated project price

As against the actual bidding price of Rs 918.41 crore, project cost of Rs 1,292.56 crore was considered by the Works Department. As concessionaire has claimed 36 per cent VGF, the amount of should have been pegged at Rs 330.63 crore instead of Rs 465.30 crore. Thus, due to preparation of faulty DPR without considering above components, excess VGF of Rs 134.67 crore was paid to concessionaire. Due to inflated estimates, the concession period was enhanced by six years. As per the assessment, the concessionaire would collect revenue of Rs 4,876.38 crore from the general public which would include net additional profit of Rs 2,322.19 crore in six years, the report said.

Rs 125.99 crore loss on stamp duty, registration fees

The state exchequer incurred an alleged loss to the tune of Rs 125.99 crore on stamp duty and registration fees due to the defective fixation and revision of Market Value Guidelines (MVG) for urban plots and buildings under the Odisha Stamp (Amendment) Rules, 2001, between 2018-19 and 2021-22 financial years, according to the CAG report.

“As per the report of the Expert Valuer, the absolute difference between the fair market value and MVG ranged from Rs 62 lakh to Rs 72 crore in the case of 100 plots. Such a difference was higher than Rs 10 crore, in the case of 59 plots. The revenue implication towards loss of Stamp Duty and Registration Fees on account of undervaluation of these 100 plots (land component alone, without considering the valuation of the buildings constructed on them), worked out to be Rs 125.99 crore.”

It also highlighted several irregularities in six departments, including Revenue & Disaster Management, Rural Development, Scheduled Tribe & Scheduled Caste Development, Minorities & Backward Classes Welfare and Co-operation.

The findings also revealed discrepancies in implementation of various flagship programmes – Mukhya Mantri Sadak Yojana, the Post Matric Scholarship scheme for ST and SC students in Khurda district – of the previous government, resulting in the loss of crores to the state.

The report unearthed that the Odisha State Co-operative Bank incurred expenditure of Rs 8.69 crore in procurement of 20 mobile Automated Teller Machine (ATM) vans and allied items/ services during April 2016 to March 2020. These ATM vans deployed in 20 blocks to provide Bank on Wheel services turned non-operational by June 2022. “Thus, a sum of Rs 8.69 crore spent for procurement and operation of ATMs became wasteful,” the report added.