Guj undercharged Adani due to inappropriate land classification: PAC report

Forest land was wrongly classified and transferred for Mundra Port; PAC recommends recovering full amount in three months

Public Accounts Committee
Image Courtesy:

A report by the Public Accounts Committee (PAC) tabled before the Gujarat Assembly on Wednesday reveals that the forest and environment department had inappropriately classified forest land and transferred it to Adani Chemical for the Mundra Port, as a result of which the company paid Rs 58.64 crores less.

According to the Indian Express, the PAC led by Congress Member of Legislative Assembly (MLA) Punja Vansh cited an audit report by the Comptroller and Auditor General (CAG) of India that had noted the “undue benefit” to the company due to the inappropriate classification of land.

In a judgment dated March 28, 2008, the Supreme Court had classified Indian forests into six categories and fixed their Net Present Value (NPV). The NPV is a mandatory one-time payment that a user has to make for diverting forestland for non-forest use, under the Forest (Conservation) Act, 1980. It is calculated on the basis of the services and ecological value of the forests.

Projects assigned smaller class numbers represent land with higher value. Therefore, Class I projects have the highest monetary value and class VI have the lowest value. The forests in Kutch were reportedly classified under Eco Class II (with NPV of Rs 7.30 lakh per hectare) and Eco Class IV (with NPV of Rs 4.30 lakh per hectare).

In December 2008, the Conservator of Forests, Bhuj, had noted that the land in question comprised mud-flats and mangroves, and therefore had higher value. However, the Deputy Conservator of Forests, (Kutch East) had considered this land as Eco Class IV and therefore only recovered Rs 87.97 crore as NPV of 2008.42 hectare forest land from the company. Therefore, the company was undercharged causing the state a loss of over Rs 58 crores.

Times of India quoted an excerpt from the PAC report: “The government adopted a faulty classification of land given to Adani group and calculated less market price of the land given to Adani’s Mundra port in Dhrab village of Mundra in Kutch.”

Indian Express also quoted another excerpt from the PAC report: “The committee believes that instead of recovering NPV as per Eco Class II from Messrs Adani for the change of purpose of forest land for Mundra Port and SEZ, the department has recovered NPV as per Eco Class IV. This decision of the department has resulted in Rs 58.67 crore less recovery to the government.”

The PAC has now recommended that the shortfall be recorded from the company over a period of three months. It has also recommended action against officials responsible for the inappropriate classification of land.


Opposition to the Vizhinjam Port Project must be seen in the wider context of protecting coastal ecology and communities
Jal, Jungle, Zameen: Chhattisgarh Adivasis march 300kms to oppose coal mining projects



Related Articles