Nexus Between NOIDA Authority Officials and Builders Leads to Multi-Crore Losses: CAG

Noida: In a scathing performance audit report, the Comptroller and Auditor General (CAG) of India has revealed extensive irregularities within the New Okhla Industrial Development Authority (NOIDA). These irregularities, spanning from 2005 to 2014, have culminated in a staggering lossesto the state exchequer. The audit report, presented in the Uttar Pradesh Assembly, underscores the systemic corruption and inefficiencies that plagued NOIDA during this period.

The CAG report points to a troubling nexus between NOIDA officials and real estate developers. This collusion resulted in widespread irregularities in land allotments and the approval of development plans. Builders were granted land at prices far below market rates, and development plans were approved for entities that failed to meet the required net worth, turnover, or experience criteria. This malpractice was facilitated by the absence of any internal audits within NOIDA, which allowed violations of rules and procedures to go unchecked.

The financial repercussions of these irregularities have been profound. According to the report, nearly 80% of the commercial plot allotments between 2005 and 2018 were secured by three real estate firms: Wave, Three C, and Logix Group. Despite these companies accumulating outstanding dues amounting to Rs 14,958 crore, the NOIDA Authority failed to take any action against them. Additionally, farmhouse schemes launched between 2008 and 2011, which were executed without government approvals, resulted in a further loss of Rs 2,833 crore.

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The report also highlights a much-hyped sports city project that led to losses of Rs 9,000 crore. Plots worth Rs 4,500 crore were allotted to entities that did not meet the stipulated criteria, further exacerbating the financial losses incurred by the state.

The irregularities within NOIDA have had far-reaching consequences beyond financial losses. The flawed governance and corruption within the authority have significantly impacted homebuyers, who have seen project delays and failures. Many homebuyers invested their life savings into NOIDA’s schemes, only to face distress as projects failed to meet completion deadlines and remain under construction.

The CAG’s findings also indicate that the arbitrary and sub-par land pricing while launching schemes allowed allottees to pay much lower stamp duties, thereby further reducing the revenue for the state.

The immediate fallout of the CAG report is expected to include increased scrutiny of current practices within NOIDA and a slowdown in project approvals. Experts believe that this audit could serve as a catalyst for more transparency and better governance within the authority. Ashutosh Kashyap, Director of Advisory Services (North India) at Colliers, mentioned that the audit’s findings would prompt NOIDA to re-evaluate its processes, potentially leading to a more competitive and healthy business environment.

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As the state government grapples with these challenges, there is hope that stringent measures will be implemented to rectify the deep-rooted issues within NOIDA. The path to reform will involve holding accountable those responsible for the losses and implementing comprehensive reforms to prevent future irregularities. The CAG report serves as a stark reminder of the need for robust governance and ethical practices in public institutions to safeguard public interest and resources.

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