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Goa's ₹2,000 Crore Shock: How Free FAR Cost the State Billions
PANAJI, GOA – A bombshell report by the Comptroller and Auditor General (CAG) reveals a staggering financial loss of over ₹2,000 crore to the Goa state exchequer. The culprit? The Town and Country Planning (TCP) department, which allegedly granted free Floor Area Ratio (FAR) to hundreds of commercial establishments, completely bypassing directives to charge for these valuable concessions. This massive revenue loss, stemming from what the audit terms an alarming lapse in financial oversight, raises serious questions about transparency and accountability in Goa's booming real estate sector. Dive into the full story to understand how this unfolded and its profound implications for the state.
Goa, the sunshine state, finds itself embroiled in a significant financial controversy as a recent Comptroller and Auditor General (CAG) report exposes a staggering loss of revenue to the tune of over ₹2,000 crore. The report meticulously details how the state's Town and Country Planning (TCP) department allegedly doled out free Floor Area Ratio (FAR) to hundreds of commercial establishments, bypassing established financial directives and costing the state exchequer dearly.
The Heart of the Matter: Free FAR for Commercial Gains
At the core of this financial misstep is the TCP department's decision to grant 10.7 lakh square meters of additional FAR to 321 commercial units without levying any fees. This move directly contradicts a directive from the finance department, which had clearly stipulated a charge of ₹1,000 per square meter for additional FAR and height granted to commercial establishments. The immediate loss due to this oversight is pegged at ₹107 crore, a substantial amount in itself.
However, the true extent of the financial hemorrhage becomes alarmingly clear when the calculation considers the rates applicable to four-star and five-star hotels. The audit report highlights that if the commercial establishments were charged at the rate of ₹20,000 per square meter, akin to what is levied for luxury hotels, the revenue loss skyrockets to an astounding ₹2,147 crore. This disparity raises serious questions about the fairness and transparency of the TCP department's actions.
A Tale of Two Notifications: Uncapping the Concessions
The CAG report further unravels a perplexing series of events surrounding the TCP department's regulations. On August 9, 2023, a notification categorized FAR and introduced a new clause (2) under 6.1.1 of the regulations. This clause permitted the government, on the TCP board's recommendation, to grant additional height and FAR on a case-to-case basis, considering various factors. Crucially, it included a cap: "Such relaxation shall, however, not be relaxed for more than 20% permitted in the prevailing regulations."
However, a mere 12 days later, on August 21, 2023, another notification from the TCP department inexplicably deleted this crucial capping clause. This removal effectively opened the floodgates, leaving the ceiling for additional height and FAR grants uncapped and paving the way for the free distribution of this valuable resource.
The Precedent Set: What About the Hotels?
The irony is not lost when one considers the existing regulations for hotels. In 2015, a notification by the TCP department on July 2 explicitly stated that four-star and five-star hotels could be granted an additional FAR of 20% upon committee recommendation and government approval, but only on payment of ₹20,000 per square meter.
The CAG report strongly argues that since these 321 commercial establishments were clearly operating with a profit motive, the TCP department should have applied similar fee structures, aligning them with the charges levied on four- and five-star hotels. The absence of such a levy points to a significant lapse in financial oversight and a potential bias in favor of certain commercial entities.
Recommendations for Rectification and Future Safeguards
The audit report doesn't just highlight the losses; it also offers critical recommendations for the way forward. It emphasizes the urgent need to review the rate prescribed by the finance department, deeming it "minimal." Furthermore, it points out the absence of a tiered slab system for various categories (individuals, commercial establishments) when granting additional FAR and height. Implementing a robust and equitable slab system would ensure fair charges based on the nature and scale of development.
The Goa Land Development and Building Construction Regulation, 2010, is the framework governing building construction in the state, specifying technical parameters like FAR, height, amenities, and safety. This incident underscores the necessity for regular and thorough audits of such regulations and their implementation to prevent similar financial leakages in the future.
My Perspective: Beyond the Numbers
This isn't just about a ₹2,000 crore loss; it's about transparency, accountability, and the equitable distribution of state resources. The unfettered granting of free FAR to commercial establishments not only deprives the state of much-needed revenue for public services but also creates an uneven playing field in the real estate sector.
In a competitive market like India's real estate, where land and development rights are premium, such concessions can significantly skew market dynamics. It could lead to inflated profits for a select few at the expense of the state's development agenda.
The rapid deletion of the capping clause in the regulations within a mere 12 days raises red flags. Was this an oversight, or a deliberate move to facilitate these concessions? A deeper investigation into the decision-making process behind these notifications is warranted to ensure that such loopholes are plugged permanently.
Furthermore, the lack of a robust and differentiated fee structure for additional FAR across various commercial categories is a significant weakness. It essentially treats a small commercial shop on par with a sprawling commercial complex, which is inherently unfair and financially imprudent for the state.
Moving forward, the Goa government must not only recover the lost revenue but also implement stringent reforms within the TCP department. This includes:
- Establishing a clear, transparent, and non-discretionary policy for granting additional FAR and height, with a well-defined fee structure.
- Introducing a tiered pricing model based on the type of commercial establishment, its size, and locational advantage.
- Ensuring regular, independent audits of the TCP department's operations and decisions.
- Implementing a robust system of checks and balances to prevent arbitrary changes to regulations.
- Considering the social and environmental impact of granting additional FAR, beyond just revenue generation.
This incident serves as a stark reminder that good governance and financial prudence are paramount for sustainable development. The people of Goa deserve to know that their state's resources are being managed responsibly and transparently.
Disclaimer: This article is based on the information provided in the CAG report and general real estate principles. While every effort has been made to present accurate and insightful content, readers are advised to conduct their own due diligence and consult with relevant authorities for specific information and advice related to real estate regulations in Goa. The views expressed in this article are those of the author and do not necessarily reflect the official stance of any government body or organization.