The Comptroller and Auditor General of India (CAG), in its performance audit of the Greater Noida Industrial Development Authority (GNIDA) titled“Internal Control in Chapter VI report” has flagged “weak internal controls” that led to irregular land allotments, rampant encroachments on government land, diversion of funds beyond its legal mandate, and a systemic failure to maintain transparency and accountability.
The audit report said the authority had strayed from its founding mandate of promoting industrial development, functioning instead like a housing authority. “The authority shifted its focus from industrial development to residential projects. Even the much-hyped Sports City project was diluted into a housing scheme,” the report observed.
In its response, GNIDA said it would act on the CAG’s recommendations. “We will take preventive measures in view of the suggestions flagged by the CAG to avoid errors in the future,” said Vinod Kumar, general manager of finance of the authority.
Allotment anomalies
The CAG found the land-allotment process “irregular and lacking transparency.” Industrial, institutional, IT and housing plots were often allotted on the basis of interviews and presentations, without fixed eligibility criteria such as minimum net worth, turnover or liquidity. “This gave the Allotment Committee unchecked powers, leading to arbitrary decisions. Many allottees turned out to be non-serious entrepreneurs who later sold their plots for profit,” the audit noted.
In a sample of 170 allotments, 51 plots, nearly 30%, were allotted despite applicants failing to furnish mandatory documents such as registration certificates, financial statements, liquidity certificates and past project records.
The audit also quantified revenue impacts. Chapter-V (sub-chapter V(2) on builders and group-housing allotments) recorded that additional purchasable Floor Area Ratio (FAR) worth ₹815.20 crore was allowed to 113 builders between January 2014 and March 2021 without executing supplementary deeds, causing a stamp-duty loss of ₹40.76 crore to the state exchequer. Separately, the Sports City chapter (V(4)) documented how fungible allowances of FAR and ground coverage generated undue benefits of ₹470.12 crore for Sports City allottees by permitting more residential development than notified norms allowed.
The report flagged poor oversight by the authority’s Board as well. “Out of 46 allotment schemes reviewed, only one had prior Board approval, while many were cleared later through ex-post facto approvals. In nine cases, no approval was sought at all,” the CAG stated.
Process safeguards were also routinely bypassed. According to Chapter V, large proportions of allotments lacked eligibility checks; terms were approved ex post facto or not at all; and crucial safeguards, such as escrow accounts and penalties for delayed plan submission, were removed from later scheme brochures, weakening enforceability.
Lapses in regulatory compliance
Audit scrutiny revealed that scheme brochures offered higher FAR and Ground Coverage (GC) than legally permitted under notified Building Regulations. This irregularity gave undue benefits to developers and caused losses to GNIDA. The authority defended the practice by citing older regulations, but the CAG rejected this argument, noting that even under the 2006 rules, FAR and GC concessions were improperly extended.
Between 2007–08 and 2017–18, the authority diverted nearly ₹1,180 crore to projects beyond its legal mandate, including a medical university, hospitals, colleges, SC/ST hostels, and offices for the District Magistrate and Senior Superintendent of Police. The CAG stated that such expenditures should have been borne by state departments with legislative sanction.
The authority defended the spending as board-approved and aligned with the chief minister’s announcements. But the CAG dismissed this defence, ruling that the Board had no legal authority to divert funds.
Lack of accountability
The audit noted that despite its size and responsibilities, GNIDA had had no internal audit mechanism since its creation in 1991. “Without this critical oversight mechanism, periodic inspections of records were not carried out, allowing unchecked violations of rules and procedures,” the report said. It was only in September 2020, after the audit flagged the issue, that GNIDA engaged a chartered accountant’s firm to conduct internal audits.
Operationally, the authority’s divisions — Planning, Property, Project, Finance and Systems — functioned in silos, weakening monitoring, delaying recovery of dues and resulting in lapses of penalties that could have deterred defaulters. The audit also noted that GNIDA permitted institutional and commercial uses at concessional rates in some cases, further eroding revenues. These findings are detailed in Chapter V sub-chapters on institutional and commercial allotments.
Broader irregularities
The report’s Chapter V on allotment of properties details irregularities across multiple categories of land distribution. Group-housing plots were allotted in ways that misused FAR provisions and supplementary deeds to benefit developers, while commercial properties saw questionable allotments. The probe also revealed how the Sports City and Recreational Entertainment Park projects allowed misuse of FAR and GC rules, conferring undue advantage to private developers. Similarly, in institutional and IT plots, violations of pricing and eligibility criteria were found to have favoured select parties.
Specific references in the report, including a table of irregular allotments, a paragraph on the stamp duty loss, and another on the undue benefits from Sports City allotments, underscore the extent of state revenue loss and unearned gains pocketed by private entities.
GNIDA’s responses, recorded in the audit, acknowledge several of the findings and promise corrective measures. The CAG, however, has recommended fixing responsibility for the lapses, strengthening brochure approvals, enforcing escrow mechanisms, and instituting an effective internal audit regime.