Odisha's Idco trashes CAG report on land mortgage
The CAG had faulted Idco for irregularly conferring mortgage rights in the lease deeds executed with industries
Sep 11, 2014
Source : Business Standard
Odisha Industrial Infrastructure Development Corporation (Idco)

 

Bhubaneswar: The state’s nodal land acquisition agency Industrial Infrastructure Development Corporation (Idco) has hit back at the Comptroller & Auditor General of India (CAG), trashing its report on irregular land allotment to industries.

The had faulted for irregularly conferring mortgage rights in the lease deeds executed with industries. Idco, in its compliance report submitted to the state government, has termed the observations of CAG as faulty, baseless and misconceived.

Idco said, the central auditor had not correctly interpreted the Industrial Policy Resolution (IPR) of the state meant for industrial facilitation. In the compliance report, Idco clarified that it does not set up industries on its own and only provides land to the industrial units. Defending its position, Idco said, its responsibility is to facilitate infrastructure development like construction of roads, drains and lights at the industrial estates and these activities cannot be pledged to banks.

Industrialists have to mortgage the land with banks as a primary mortgage for loans to start units, Idco stated. On issue of NOCs (no objection certificates) given to the industries to mortgage leased land, Idco said, it does not require to take the approval of the government for this purpose. According to the decision taken at the meeting of the 40th board of directors, Idco is empowered to issue NOCs.

The CAG had observed that Idco irregularly conferred mortgage rights in the lease deeds executed with 52 MoU (memorandum of understanding) based and 54 non-MoU based industries while handing over of possession of 46,732.894 acres land, even though such power was not vested with Idco by the state government. Idco was pulled up by the auditor for irregularly issuing NOCs to 26 MoU based industries for mortgaging 13,846.23 acres land in order to raise loans from financial institutions. Based on the NOCs issued by Idco, 12 companies availed loans worth Rs 52,423.50 crore by mortgaging 8,489.89 acres land allotted to them.

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