CAG flags Rs 29.45 crore unfruitful spend by DSIIDC

The Comptroller and Auditor General (CAG) of India has flagged an unfruitful expenditure of Rs 29.45 crore by the Delhi State Industrial and Infrastructure Development Corporation.

The DSIIDC has acquired 137.63 acres of land at Baprola on a 99-year lease in December 2006 to set up a Gems and Jewelry Park and Fashion Design Hub but left 81.42 acres, representing 59 percent of the total land, completely unused for over 17 years. The land has been left unused due to indecision and repeated changes in the intended use of the land.

The CAG report also found that DSIIDC created an undischarged liability of Rs 15.79 crore toward pending annual ground rent on the allotted land for the period from December 2007 to December 2024. The audit noted that it could attract further interest and penalty from the Rural Development Department of the Delhi Government.

DSIIDC had paid Rs 38.09 crore to the Rural Development Department in January 2007, comprising Rs 37.16 crore as land premium and Rs 0.93 crore as ground rent at 2.5 percent of land value for the first year.

Scrutiny of DSIIDC records from April 2019 to March 2023 revealed that the corporation had utilised only 56.21 acres out of the total 137.63 acres, the 56.21 acres having been used for EWS housing under the Jawaharlal Nehru National Urban Renewal Mission scheme in February 2013.

The audit found a consistent pattern of changing plans and inaction on the remaining 81.42 acres. When no developers responded to the original Gems and Jewelry Park and Fashion Design Hub concept, the project was changed in September 2010, with Chief Minister approval, to a Knowledge-Based Industrial Park. A feasibility study by agency CBRE South Asia in March 2012 found the KBI Park financially viable, but the project remained at the planning stage until December 2018.

By 2019-20, the same agency found the KBI Park no longer feasible given changed market conditions. The Industries Minister then decided in August 2019 to drop the KBI Park and instead develop Shop cum Office and Flatted Factories on the land. That decision was also not implemented.

In the Rozgar Budget of 2022-23, the Delhi Government announced the development of an Electronic City on the available industrial land at Baprola. As of November 2024, however, there was no further progress because the Delhi Electronic System Design, Manufacturing and Refurbishment Policy 2024-29 was still awaiting government approval.

In its reply submitted in March 2025, DSIIDC stated that changes in project decisions resulted from approvals and policies of the Delhi and central governments and that the expenditure would be recovered by factoring it into the sale price of plots and working spaces once the project materialises, meaning there would be no net financial loss.

The CAG rejected this response as not tenable. The audit noted that indecisiveness and lack of proactiveness by the corporation had deprived Delhi of the expected benefits of industrial growth and employment generation for 17 years, while substantial funds remained blocked.

The Baprola case is a textbook example of how public land acquired for industrial development can be held idle for nearly two decades when institutional decision-making repeatedly fails to settle on and execute a workable plan.