HYDERABAD: The Comptroller and Auditor General (CAG) report on State's public sector undertakings said that Telangana State Industrial Infrastructure Corporation Limited (TSIICL) sold prime land below the prevailing market rate to Bhagwathi Products Limited (Micromax) without due diligence and adequate justification.
In doing so, the CAG report said, the TSIICL deviated from its Allotment Regulations, which resulted in a revenue loss of Rs 4.47 crore to the government. The issue regarding the allotment of a one-acre land in Gachibowli Industrial Park dates back to May 2016. Bhagwathi Products Limited had requested a subsidised rate for the same, as it was relocating its R&D centre from Beijing, China, to Hyderabad.
Following that, the Cabinet Sub-Committee (CSC) of the State government approved the allotment of the land, advised the Industries and Commerce Department to fix its cost, and asked it not to go below Rs 10 crore.
It was then mutually decided that the private party would pay Rs 10.05 crore for the land. During the audit, the CAG observed that going by the prevailing land rates - Rs 40,096 per sq m till November 22, 2016, and Rs 44,908 per sq m from November 23, 2016 - the least market value of the land would have been Rs 14.52 crore.
"However, these factors were ignored by the Industries and Commerce Department, which finalised the land cost at Rs 10.05 crore, as proposed by the party in the meeting convened. This was despite the fact that the Department had itself opined that State government should consider going for auction as it was prime land," the CAG said.
The State, in January, 2020, told the CAG that the CSC "had decided to allot land to the party at subsidised rate considering the project to be of strategic importance...."