The Comptroller and Auditor General (CAG) has flagged a loss of INR 12.86 crore incurred by the West Bengal Industrial Development Corporation Limited (WBIDCL) in the allotment of land to Instakart Services, the logistics arm of e-commerce company Flipkart, at the Haringhata Industrial Park in Nadia district. The finding forms part of the CAG's 2024 report on Public Sector Undertakings for the period ending March 31, 2023, which was tabled in the West Bengal Assembly in the past week. 
According to the audit report, WBIDCL, the state's nodal agency for industrial development, determined the base price of the land without excluding water bodies within the project site, despite its own pricing policy requiring calculations to be based only on allocable land available for industrial use. 
The report noted that the previous Trinamool Congress (TMC) government had not tabled CAG reports covering four financial years up to 2024–25. The current report was presented in the Assembly after the change in government. 
The Haringhata Industrial Park houses Flipkart's largest fulfilment centre in the country. The facility, inaugurated in 2022, has a storage capacity of 50 lakh cubic feet spread across six mezzanine levels and serves as a key component of the company's logistics network in eastern India. 
The audit traced the project back to August 2017, when the West Bengal government decided to transfer 1,326.93 acres of land to WBIDCL for industrial development. A month later, the corporation resolved to develop the Haringhata Industrial Park in phases. 
The state government sanctioned INR 206.73 crore for the acquisition of 358.19 acres at the site. The amount was paid to the Land and Land Reforms and Refugee Relief and Rehabilitation Department in March 2018, while WBIDCL took possession of the land in October that year. 
In the same year, WBIDCL invited expressions of interest from prospective investors and fixed the land price at INR 63.49 lakh per acre for a 99-year lease on an 'as-is-where-is' basis. 
Instakart Services applied for 107.35 acres in September 2018 to establish a regional distribution centre with a proposed investment of INR 991 crore. The WBIDCL Board approved the proposal the following month, and the State Cabinet's Standing Committee on Industry granted approval in December 2018. 
The corporation allotted 107.35 acres to Instakart in January 2019 for INR 68.16 crore and handed over possession in April 2019. A further 1.77 acres was allotted in March 2020 for INR 1.07 crore, with possession transferred in June that year. A 99-year lease deed covering a total of 109.12 acres was executed in February 2021. 
During its scrutiny in December 2022, the CAG found that the industrial park's layout included 55.89 acres of water bodies that could not be used for industrial development. Consequently, the actual allocable area was only 302.299 acres rather than the full 358.19 acres used to calculate the lease rate. 
The auditor stated that WBIDCL's pricing policy required the base price to be calculated by dividing the land acquisition cost, along with a 10% administrative charge, by the allocable land area. Applying this methodology, the base price would have been INR 75.23 lakh per acre instead of INR 63.49 lakh per acre. 
Based on the revised calculation, the lease premium for 109.12 acres should have been INR 82.09 crore. However, WBIDCL collected only INR 69.23 crore, resulting in a shortfall of INR 12.86 crore. 
In its response submitted in May 2023, the state government stated that WBIDCL's Board had approved the base price of INR 63.49 lakh per acre after detailed deliberations in July 2018 and that the State Cabinet had subsequently cleared the allotment on the same basis. 
The CAG rejected the explanation, stating that it did not address the corporation's failure to adhere to its own pricing policy. The report also referred to the West Bengal Inland Fisheries (Amendment) Act, 1993, which prohibits the filling of water bodies for construction without prior state approval, and cited a November 2019 Supreme Court order relating to the protection of local water bodies. It concluded that calculating the base price without accounting for the actual developable land resulted in a loss of INR 12.86 crore to the state's industrial development corporation. 
Source - PTI