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Maha land scam: Time to break the politician-builder nexus?

A recently leaked Comptroller and Auditor General of India report has again exposed the builder lobby-bureaucrat-politician nexus in Maharashtra and has alleged irregularities in land allotments by politicians, including Cabinet Minister and former Chief Minister Vilasrao Deshmukh, over the last eight years resulting in a loss to the exchequer.

The report has indicted Deshmukh, over five state ministers and one MLA as various land deals were made with the allotments favouring them, their kin and trusts associated with the legislators.

This is how the political -builder nexus works: Politicians invest black money in property and it is in their interests to keep property prices high. And it is this vested interest of the nexus which brings small land parcels in market so that the prices of land do not collapse

Politicians invest black money in property and it is in their interests to keep property prices high. Reuters

The CAG report has alleged that Deshmukh gave a plot at a discount to Manjra Charitable trust in 2005 without any specific reason. When Deshmukh was CM, he alloted 3,840 square metres at suburban Borivali in Mumbai, at concessional rates for a dental college, by charging only 50 percent of the market value.

The trust paid Rs 65 crore and took possession of the land in 2006. However, there was no dental college even four years later, and the Trust, in April 2011 requested the Collector to alter the purpose of use of land from dental college to educational activity as it was not in a position to start the college.This means that the trust retained the land by paying only Rs 6.56 crore against the market rate of Rs 30.37 crore without even opening a college!

"Non mentioning of the mandatory clause that the entire work should be completed within a period of two years, deprived the government to resume back the land and the trust got to retain it by paying merely Rs 6.56 cr," the CAG report, which is yet to be tabled, said.

Ironically, the contents of the CAG report were made public yesterday when Deshmukh was pulled up by the Supreme Court for giving 20 acres of land to film producer Subhash Ghai in 2004 for his film institute overlooking the existing rules.The apex court upheld the Bombay High Court order quashing allotment of the land to Ghai's film institute in Film City in suburban Mumbai in 2004 when Deshmukh was Chief Minister.

The report also alleges that of 91,300 sq metres of land in Nashik reserved for extraction of minor minerals by the PWD,41,300 sq was initially allotted to current cabinet minister Chhagan Bhujbal family-run Mumbai Education Trust after changing the purpose of reservation from mining activity to education at an occupancy price of Rs 1.55 lakh. Since the allotment was not in accordance with rules, the finance secretary objected to it. However, in 2009, the same land worth Rs 9.39 crore was finally sold to the Bhujbals for the expansion of an engineering and technical college forRs 7.53 lakh. While the total value of the land is worth Rs 9.39 crore, it was given to MET for only Rs 9.08 lakh. The land, however is still lying unused.

On the allotment to the Sindhudurg Shikshan Prasarak Mandal, which is supported by senior Congress leader Narayan Rane, the CAG observed that the Trust acquired government land at a concessional rate for the purpose of community centre and instead used if for commercial purpose.

"As such, the land was required to be resumed by the government along with a structure on it. The cost of the land was Rs 6.68 crore (as per the Ready Reckoner of 2010), but was allotted to the Mandal for a meagre amount," reports Business Standard.

Other ministers named in the CAG report include state Irrigation Minister Radhakrishna Vikhe Patil, state Minister for Employment Vasant Purke and Minister for Forests Patangrao Kadam.

The issue had rocked the state legislative assembly on Wednesday with the Opposition demanding that the government tables the report in the House immediately.

This is a clear sign that the nexus between builders and politicians is what is driving real estate prices in Mumbai crazy. A Tehelka story rightly puts it, "Virtually everybody from top to bottom is on the gravy train and works overtime to provide illegal gains to realtors, rather acting as custodians of public interest."