CAG's higher land premium proposal ignored by Ahmedabad civic body
07 Apr 2023
2 Min Read
CW Team
The Comptroller Auditor General (CAG) had stated in 2016 that the civic body's slum redevelopment policy was "flawed" and "skewed towards offering cheap land to private bidders," and that it was intended to "cause crores of financial loss" to the Ahmedabad Municipal Corporation (AMC). Despite this, the AMC has yet to make any changes to the policy.
The CAG audited 13 slum redevelopment schemes and discovered that the land premium was fixed without taking into account the formula agreed upon under the state government's "land disposable policy." According to the CAG, this was "illegal" and a clear violation of government policy. So far, the AMC has given builders 50,000 square metres of land divided into ten plots as part of the in-situ slum redevelopment project.
According to the CAG report from 2016, the developer paid a land premium that was 1.49 to 3.3 times higher than the existing jantri for that time period. According to a senior AMC official, "CAG questioned this rate because AMC charged a higher premium when it auctioned land for normal commercial and residential use in 2015."
According to the CAG, between January and July 2015, the AMC fixed a base price that was 2.61 times to 6.59 times higher than the jantri rate for a few plots for commercial and residential projects. It earned 3.2 to 10.94 times the jantri rate for the same plots after the auction.
"The average premium charged by developers participating in slum redevelopment should have been 6.18 times higher than the jantri rate," CAG stated at the time. The state government passed a GR in 2008 that insisted on charging current commercial rates during auctions or sales of government-owned plots.
The AMC had set aside 94,240 square metres of land for slum redevelopment projects. "The CAG's proposal to send slum redevelopment projects to the AMC's estate department's price fixation committee for review was never accepted by the AMC's slum redevelopment project division, resulting in losses worth crores to the AMC," a senior AMC official said.
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The Comptroller Auditor General (CAG) had stated in 2016 that the civic body's slum redevelopment policy was flawed and skewed towards offering cheap land to private bidders, and that it was intended to cause crores of financial loss to the Ahmedabad Municipal Corporation (AMC). Despite this, the AMC has yet to make any changes to the policy.
The CAG audited 13 slum redevelopment schemes and discovered that the land premium was fixed without taking into account the formula agreed upon under the state government's land disposable policy. According to the CAG, this was illegal and a clear violation of government policy. So far, the AMC has given builders 50,000 square metres of land divided into ten plots as part of the in-situ slum redevelopment project.
According to the CAG report from 2016, the developer paid a land premium that was 1.49 to 3.3 times higher than the existing jantri for that time period. According to a senior AMC official, CAG questioned this rate because AMC charged a higher premium when it auctioned land for normal commercial and residential use in 2015.
According to the CAG, between January and July 2015, the AMC fixed a base price that was 2.61 times to 6.59 times higher than the jantri rate for a few plots for commercial and residential projects. It earned 3.2 to 10.94 times the jantri rate for the same plots after the auction.
The average premium charged by developers participating in slum redevelopment should have been 6.18 times higher than the jantri rate, CAG stated at the time. The state government passed a GR in 2008 that insisted on charging current commercial rates during auctions or sales of government-owned plots.
The AMC had set aside 94,240 square metres of land for slum redevelopment projects. The CAG's proposal to send slum redevelopment projects to the AMC's estate department's price fixation committee for review was never accepted by the AMC's slum redevelopment project division, resulting in losses worth crores to the AMC, a senior AMC official said.
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