Baba Ramdev.

MUMBAI: Last year, the Maharashtra government made a decision to give a 75% discount on land for a food park in Nagpur, which eventually was awarded to Baba Ramdev ’s Patanjali Ayurveda Ltd . Documents accessed through RTI show that the decision was not uncontested. A senior bureaucrat, then principal secretary of financial reforms, Bijay Kumar, had raised concerns in writing about the basis of the price waiver.

Three weeks after Kumar questioned the financial calculations behind the price reduction, he was transferred on April 29, 2016. The transfer came less than a year and a half into his posting while the usual tenure is at least three years. Kumar, who is currently principal secretary (agriculture), was unavailable for comment.

Chief minister Devendra Fadnavis who heads the Maharashtra Airport Development Corporation (MADC) board which cleared the allotment, told TOI that the entire process was transparent and the allotment followed open bids. He also said Kumar’s transfer was routine and he had been given a posting of his choice.

The board relied on a four-member sub-committee to suggest the land price for a food park in the Mihan (Multi-Modal International Hub Airport) area in Nagpur. Kumar was a member of this sub-committee, which included then MIDC CEO Bhushan Gagrani and then VC and MD of MADC Vishwas Patil. The panel was headed by urban development secretary Nitin Kareer.

Although MADC’s rate in the area was Rs 1 crore per acre (4,046 square metres), the committee recommended a base price of Rs 25 lakh per acre for a food park. In August 2016, the sole bidder Patanjali Ayurveda Ltd was awarded 230 acres of the land, paying Rs 58.63 crore for a 66-year lease.

The minutes of the sub-committee’s final meeting held on April 7, 2016--acquired by TOI through RTI--reveal how the rates came to be brought down.

The rate offered by MADC for land outside the SEZ area with developed infrastructure was Rs 2,500 per square metre, the minutes show. However, MADC MD Vishwas Patil said the rate was too high for a food park. He pointed out that other states were offering concessional rates and this could potentially draw away projects from Nagpur. Also, MADC had earlier given plots at concessional rates to Boeing and Satyam, Patil said.

To bring down the price, the panel first subtracted the cost of providing infrastructure as the plot was in an undeveloped area. This meant a reduction of Rs 1,000 per square metre in the base price. The base price would then work out to Rs 1,500 per square metre.

MADC officials then suggested a further markdown by lowering base price to Rs 625 per square metre (around Rs 25 lakh per acre) “considering the rates of adjoining states and viability of such projects”.

The sub-committee ended up endorsing this suggestion. It said if the plot was bid or auctioned for an offset price of Rs 625 per square metre, then price of the remaining unsold land in the area should be “proportionately increased” to compensate for the discount given to Patanjali.

The land earmarked for the food park was 300 acres and the remaining unsold MIHAN land around it was around 1,050 acres. MADC officials worked out that the base price for the entire remaining land would have to go up by 15%. “This type of cross-subsidy would benefit such a project which can lead to major gains to the farmers in the rural areas of Nagpur,” said MADC officials.

The sub-committee finally recommended both the new base price and the 15% hike on the remaining land given for commercial or industrial purposes, on condition of a transparent bidding process.

But while three members of the sub-committee signed on the recommendation, the fourth, Kumar, dissented. In the minutes, he noted that neither the lowered base price nor the cross subsidy were supported by detailed calculations.

“These have been taken as proposals of the MD of MADC without detailed back-up calculations. These detailed calculations have been asked for. The board may get the same vetted before having to decide the merits of these proposals,” he said in a hand-written note on the minutes.

Sub-committee chairman Nitin Kareer told TOI that initially other members were also not satisfied with the price calculations. “Later, more details were presented to calculate the base price. We also looked at the process followed by MIDC. And the cross-subsidy ensured that there would no financial loss to MADC,” he said.

Subsequently, the MADC board headed by Fadnavis agreed to the recommendations of the sub-committee on lowering the base price and offering a cross-subsidy. Patanjali Ayurveda Ltd emerged as the sole qualifying bidder and was awarded the land at Rs 630 per square metre.

