CAG flags ₹13,362 crore loss in Greater Noida authority’s operation delays

CAG on Greater Noida Authority: A performance audit (2005-06-April 2021) found irregularities in group housing plot allotments accounted for ₹10,732 cr in dues

Noida/Lucknow: The Comptroller and Auditor General (CAG) of India has uncovered serious procedural lapses in the functioning of the Greater Noida Industrial Development Authority (GNIDA), citing irregularities in planning, land acquisition, pricing, and allotment that caused notional losses of ₹13,362 crore to the state exchequer.

The findings, based on an audit conducted between December 2018 and November 2019, were tabled in the Uttar Pradesh Assembly on Wednesday by state parliamentary affairs minister Suresh Kumar Khanna during the ongoing Monsoon session. (Sunil Ghosh/HT Archives)

The performance audit, covering the period from 2005-06 to 2017-18 and later updated to April 2021, found that irregularities in group housing plot allotments alone accounted for ₹10,732 crore in dues. These lapses not only drained state revenue but also delayed housing projects, leaving thousands of homebuyers in distress.

According to the report, dues worth ₹19,500 crore were pending as of April 2021 for land premium, lease rent, and interest — largely from allotments made since GNIDA’s inception in 1991.

The findings, based on an audit conducted between December 2018 and November 2019, were tabled in the Uttar Pradesh Assembly on Wednesday by state parliamentary affairs minister Suresh Kumar Khanna during the ongoing Monsoon session.

Vinod Kumar, GNIDA’s general manager (finance), said corrective steps were being taken: “Following the CAG report, we have revised our allotment policies to prevent errors in future. The staff is working on recovering the outstanding dues in line with the CAG’s recommendations.”

Major findings

Dues were pending from 81% of allottees, with ₹7,100 crore overdue for more than three years in 66 cases. Despite clear defaults, the authority failed to cancel these plots as required under allotment terms.

The report also revealed that eight out of nine plot schemes launched during this period were initiated without prior board approval. In three cases, they were never even placed before the board for ex-post facto approval.

The CAG concluded that GNIDA showed “serious lapses of probity, integrity, and ethics,” failing to act against defaulting builders and its own officials. The situation reflected both poor enforcement and disregard for financial discipline.

During land acquisition, officials misused urgency provisions meant for exceptional circumstances, sidestepping farmers’ rights. Allotments were marred by selective relaxation of brochure conditions, underpricing of plots, reduction in allotment money, and permission to mortgage despite outstanding dues. Builders were allowed to subdivide, exit, or transfer plots before completing projects.

The audit said officials acted “in clear breach of public trust” and in “complete disregard to the interest of GNIDA as well as ultimate buyers.”

Other key lapses

GNIDA, established under the UPIAD Act, 1976 to develop an industrial area near Delhi, was found to have prioritised residential development over its industrial mandate.

Under the Master Plan 2021, land acquisition, development, and allotment between 2005-06 and October 2011 were undertaken without approval from the National Capital Region Planning Board (NCRPB). By September 2019, residential land development stood at 104.04% of the planned area, while industrial land development lagged at 67.47%.

Out of 2,580 industrial plots allotted from 1991 to March 2021, only 1,341 units (52%) were operational — with 1,194 of them functional after delays of up to 19 years. Nearly half of the industrial projects (48%) remained incomplete, undermining GNIDA’s core objective of industrialisation and job creation.

Frequent revisions in acquisition proposals, poor due diligence, and delays led to avoidable expenditures, including ₹527.84 crore in excess compensation and overpriced direct land purchases.

Even when builders defaulted on payments long past the due period, GNIDA failed to cancel projects, encouraging profiteering through changes in allottee ownership. Dues worth ₹10,733 crore were pending as of April 2021.

Audit scope

The CAG audit, ordered by the UP government in July 2017, examined the effectiveness and transparency of GNIDA’s land acquisition and allotment procedures across industrial, residential, commercial, sports city, institutional, IT, and farmhouse categories. It also reviewed master plan preparation, property pricing, and internal controls.

The findings paint a picture of systemic failures at all levels — from the GNIDA Board to operational staff — with adverse consequences for the state’s revenue, planned industrialisation, and the rights of farmers and homebuyers.

Following the audit, GNIDA says it has made changes to its allotment policies and is pursuing recovery of pending dues. However, the CAG report stresses the need for stronger enforcement, transparent decision-making, and adherence to statutory requirements to prevent recurrence.

The report also indirectly raises questions about whether GNIDA’s administrative structure and governance framework are fit for purpose, given the concentration of decision-making power and the absence of robust oversight mechanisms.

With billions in public money at stake and critical housing and industrial projects delayed for years, the CAG’s findings add to growing concerns over governance and accountability in large development authorities across the country.

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