The Comptroller and Auditor General (CAG) has reported a ₹12.86 crore financial shortfall in a land lease deal between the West Bengal Industrial Development Corporation (WBIDCL) and Flipkart's arm, Instakart Services. The auditor found that land prices at Haringhata Industrial Park were calculated without accounting for significant water bodies, leading to an undervaluation of the leased site.
Detailed Coverage
The Comptroller and Auditor General (CAG) has raised concerns regarding a land transaction at the Haringhata Industrial Park in West Bengal, alleging a financial loss of ₹12.86 crore to the state-run West Bengal Industrial Development Corporation (WBIDCL). The audit, which examined records up to March 2023, scrutinizes the pricing methodology used when leasing land to Instakart Services, the logistics subsidiary of e-commerce major Flipkart.
Pricing Discrepancies at Haringhata
At the heart of the audit finding is the valuation of the land allotted for the project. In 2018, WBIDCL leased 109.12 acres to Instakart for a 99-year term, following a proposal for a major investment. The CAG audit revealed that the lease price was set at ₹63.49 lakh per acre. However, the auditor noted that the layout plan of the industrial park included approximately 55.89 acres of water bodies that were not suitable for industrial development.
According to the official audit report, these water bodies effectively reduced the total usable land area. The CAG stated that by failing to account for these unusable areas in its calculations, WBIDCL underestimated the base price per acre. Under the corporation's own established pricing policy—which involves dividing the total acquisition cost and administrative charges by the actual allocable land—the base price should have been ₹75.23 lakh per acre. This calculation error, according to the auditor, resulted in a collection of ₹69.23 crore in lease premiums against an expected ₹82.09 crore.
Regulatory and Environmental Context
The report emphasizes that the land was leased on an 'as-is-where-is' basis, but the exclusion of water bodies is significant due to strict environmental regulations. The CAG highlighted that filling or developing over water bodies requires specific state-level approvals and must adhere to legal standards, including Supreme Court directives aimed at protecting local water resources. Because these areas were included in the total site measurement for pricing, the auditor concluded that the valuation did not reflect the true industrial potential of the available land.
While the state government provided a response to the audit, arguing that the pricing was finalized with board and cabinet approvals, the CAG maintained that these approvals did not justify the deviation from the cost-recovery model. The findings underscore the complexities state industrial agencies face when balancing large-scale infrastructure development with environmental compliance.
For investors and stakeholders, the core monitorable remains how state-run industrial development corporations handle land pricing and environmental clearances for large corporate projects. As this matter has been formally tabled in the Assembly, the next steps may involve a government review of the pricing policy or further clarification regarding the regularization of land use at the Haringhata site.