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Haryana Shahri Vikas Pradhikaran is now rolling towards bankruptcy

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The report contains a complete chapter on the negative growth since 2013 and elaborates on how expenses have exceeded revenue recovery.

Haryana’s biggest public sector real estate entity, the Haryana Shahri Vikas Pradhikaran (HSVP), which has been ruling the realty sector in the state since 1977, has charted negative growth over 5 years, and is now rolling towards bankruptcy. 

The CAG (Comptroller and Auditor General) report submitted during the special session of Haryana Assembly on Tuesday has indicated this.

The report contains a complete chapter on the negative growth since 2013 and elaborates on how expenses have exceeded revenue recovery. It also contains details of laxity by HSVP bureaucrats in initiating recoveries from defaulters, including occupant owners of commercial properties and liquor vends as well as leasee petrol stations.

HSVP has also “forgotten” the allottees of HSVP commercial sites who have not deposited 25% of the basic cost of property. There are over 3,100 such commercial properties in main urban estates of Panchkula, Karnal, Sonipat Gurugram and Faridabad where arrears worth over 1000 crore are outstanding against the allottees, sources said. This has been endorsed by the CAG report.

Non-initiation of action against defaulters and inadequate efforts for auction of unallotted properties in developed sectors have hampered revenue generation by HSVP. This was because non-reconciliation of allottee ledgers led to non-detection of fraud and no perspective plan for time-bound development of acquired land. Further, delay in recovery of enhanced land compensation, non-recovery of external development charges, continuance of business in resumed properties, non-recovery of water and sewerage charges and outstanding rent on leased property impacted revenue generation by HSVP.

According to the CAG report, the receipts in HSVP have decreased from Rs 5,234 crore in 2013-14 to Rs 4,219 crore in 2017-18. This is mainly due to dip in receipt of external development charges (EDC) from town and country planning department (TCPD), delays in recovery of land enhanced compensation and decline in sale proceeds of residential and commercial plots.

To assess whether the realizable revenue is being collected efficiently and is accounted for in a proper manner, records of 5 out of 18 estate offices for 2015-18 were scrutinized during December 2017 to April 2018 with audit focus on revenue earning streams directly under control of HSVP. Audit has used the data (obtained in December 2017) from Plot and Property Management (PPM)109 software, used for management of plots and property falling under HSVP.

Default by plot allottees

Scrutiny of sample records taken by the CAG team from the offices of estate officers in Ambala, Gurugram, Sonipat, Faridabad and Panchkula revealed that allottees of 3,177 plots had not deposited the mandatory 25% bid money. Despite this, HSVP estate officers had not initiated the process to launch action against them.

Default by liquor vends and petrol pumps

According to CAG report, 11 sites of liquor vends had defaulted on payment of over Rs 11 crore as outstanding monthly rent for leased sites in Gurugram. The concerned estate office officials had not even served notices on the defaulters and neither had any revenue recovery been made from them. The report gave the example of a petrol pump site leased up to 2001, which has been running without any extension or permission from owes the HSVP over Rs 1.10 crore. Panchkula EO has taken no action.

Delayed recovery of enhancement

According to the CAG report, HSVP has also defaulted in recovery of arrears worth hundreds of crores from allottees in Panchkula, Karnal, Sonipat, Gurugram, Rewari and new urban estates. While it has made payment to oustees along with the interest, the recovery has slowed down due to undue interference of local politicians and pressure groups.

Source: Press Release

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