SHAILESH GANDHI | 22/05/2013
Would you believe that Maharashtra loses over Rs25,000 crore annually because of carelessness or corruption, and this has not been exposed so far?
Are we really poor or are we thrust into poverty? The recent scams, which have been unearthed, give me a feeling that we may actually be quite well off with enough resources. If the lakhs of crores of public resources being given away and snatched away by the few were to come to the public exchequer, we could be quite comfortable as a nation. I have been pursuing one such scam in Maharashtra in which I believe a few thousand crores of public money is being lost to benefit a few.
Maharashtra’ debt is about Rs2.7 lakh crore, and we pay the interest for this. A state owns many resources on behalf of its citizens. One of these is land. Governments sell some of the lands and give some on lease. The idea behind giving certain lands on lease is to basically have an inflation-proof investment and sometimes, to encourage certain activities. Hence it offers lands on lease. It wishes to retain the land so that it may basically ensure that its revenue matches with the growth in inflation.
A lease is legal transaction, which primarily lays down the area that is leased, purpose for which the land is to be used, period of lease, lease rent and certain other conditions. When the lease expires, it may be renewed with the lessor increasing the lease rent as per themarket price, which reflect the inflation in the intervening period.
When any individual or institution gives land or a property on lease and the lease expires, a fresh lease is drawn up at the prevailing market rates if the lessee wants to continue. This simple principle has not been followed in Mumbai and possibly in the state ofMaharashtra. I have been told that this is true all over the country. Some leases are renewed while some are allowed to continue occupying the land at the old rates. What are the reasons for such irrational actions?
This may be due to carelessness or corruption.
I had discovered this in 2005 and drawn the attention of the chief secretary to this in a letter titled “Arbitrariness and huge loss of public money in public lands given on lease”. I have now got the scanned copy of the file relating to this which has over 600 pages over the years and has ended on a bizarre note.
The Supreme Court is the 2G case has said, “In conclusion, we hold that the state is the legal owner of the natural resources as a trustee of the people and although it is empowered to distribute the same, the process of distribution must be guided by the constitutional principles including the doctrine of equality and larger public good.” The poorest man who may be starving is an equal and rightful owner of this land, and it is necessary that the appropriate revenue is obtained for him. I looked at the list of leases of lands given by the two collectors of Mumbai (obtained in RTI) and decided to calculate the worth of the lands where lease deeds have expired and unauthorized occupiers are allowed to continue.
Let me first share the route the Maharashtra Government has decided to adopt after eightyears of confabulations: The government has decided to offer the lands to the lessees at about 20 to 30% of the value! I am shocked at this irrational action of the government and think it is about time, citizens defend their revenue by telling the government they will not accept this approach. Below are the detailed calculations…
|Note on some assumptions in calculations:
I used the Ready Reckoner rates, which are for FSI of 1 (one). I checked with some renowned architects and builders and was told that the land value for the island city is reckoned at a FSI of 3 to 5 and for the suburbs at a FSI of 2 to 4, I therefore assumed land value at FSI 3 for the city and 2 for the suburbs. In the case of the suburban collector, when I could not get the value of the land from the Reckoner I took two leases which had been given. In 2007, for an access road Rs1,062 per sq mtr had been charged; I therefore assumed a rate of Rs1,200 per sq mtr in 2013 for access roads, playgrounds, etc.
In the case of the information about leases provided by the Mumbai collector, in 103 cases there is no mention of the lease date and period of lease. Despite a specific query by me using RTI, the PIO has said they will need two to three months to provide this information!
There are also other government agencies like BrihanMumbai Municipal Corporation (BMC), which have similar lands in Mumbai. My calculation (see box above) estimates that there is an annual loss of about Rs1,550 crore by Mumbai Collector and about Rs1,200 crore due to the suburban collector (see below), i.e. a total revenue loss of Rs2,750 crore every year.
The government now proposes to give away ownership rights to the lessees for Rs2,248 crore plus Rs1,841 crore onetime! Citizens must protest before the government dispossess us of our land and legitimate revenue.
If we can get the government to auction the leases in Mumbai and all over Maharashtrawe could have a revenue stream of over Rs25,000 crore each year. Citizens and media need to make the government get the appropriate revenue by fixing lease amounts at current rates. Also this is a revenue stream which is partial hedge against inflation, saving future generations from having to pay ever higher taxes.
(Shailesh Gandhi served as Central Information Commissioner under the RTI Act, 2005, during 18 September 2008 to 6 July 2012. He is a graduate in Civil Engineeringfrom IIT-Bombay. Before becoming a full time RTI activist in 2003, he sold his packaging business, Clear Plastics. In 2008, he was conferred the Nani Palkhivala Memorial Award for civil liberties.)
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