Defence Land For Sale – Are Land Parcels Being Undervalued?

After the government decision to sell Air India, BPCL, Public Sectors Banks, GIC, LIC, more than 100 PSUs, Railway Privatisation, Defence Production Priviatiasion, Ordnance Factory Corporatisation etc., the Government is now set for sale of precious Defence land. According to a News item published in a section of the media, that a non-lapsable Defence Modernization Fund will be separately created with the sale of Defence Land. Half the sale proceeds will go to the Consolidated Fund of India. The Army can use the corpus only after the annual budgetary grant given to Armed Forces has been exhausted. In case the money in the non-lapsable fund is not utilised for three years, it be sent back to the consolidate fund of India, which takes care of the overall expenses of the Government in other Sectors. The report further says that the non lapsable fund would be used to procure Defence Equipments for the Armed Forces under the Make in India initiative and for certain works like creation of Family Accommodation for personnel under the married accommodation project. It is unclear that the proposal will be accepted by the Government or a decision will be taken to divert the entire proceeds of land monetization towards the Armed Forces. contacted C.Srikumar General Secretary of AIDEF who has 40 years of experience in the Defence Ministry as a Trade Union Leader and asked his comment on the reports published in some sections of the media. Srikumar said “already the Defence Civilian employees and their Trade Unions are fighting against Corporatisation and Privatisation in the Defence. The Ordnance Factory Board itself is holding 65 thousand acres of land including in major cities like, Kolkata, Mumbai, Pune, Chennai, Kanpur, Jabalpur and Dehradun etc. These lands will be deliberately undervalued. Today the Ordnance Factories total assets is worth Rs.2 lakhs Crores”.

Srikumar adds that it is understood that the KPMG Consultant appointed by the Ministry of Defence for assessing the value of the assets of the Ordnance Factory including the land holding is estimated as Rs.70,000 Crores only. This is a glaring example how public property which are national assets are undervalued. Now the Finance Ministry wants to sell the land being held by the Defence Ministry. Majority of these land being held by the Defence Ministry are given by the State Governments or by the Farmers. These vacant lands with afforestation is playing a very big role in maintaining the ecological balance in these cities and towns. These vacant lands will go to the hands of Corporate real estates and will become concrete jungles.

Srikumar goes on to say that With the experience of murky land dealings going on in our country, I am afraid that it will create another route for corruption at all level. Already more financial powers have been given to Vice-Chiefs of three Services, it will create a situation that amount granted through monetization of land is exhausted at the earliest and they will come back to the Government for more funds. According to me it is not sustainable in the long run, apart from the scandals it will generate. He further added that the question is who is going to buy these lands. Already if one sees the advertisements, Banks are auctioning properties in the cities, the reserve price of just 50% of the value of purchases and the banks have to write off the balance from their books as non-performing assets. Is it going to bring as much money to the government as expected. There is one moot point. When the State Governments and Farmers gave the land they should have the first right to take it back, if they are not wanted by Central Government. If the government gets a big chunk of money whether the Government will avoid taxing the common man with cess and such. The people of this country needs an answer from the Government.

Any way another important debate started in the country after the Finance Ministry’s proposal. It is understood that the Finance Ministry initially opposed this proposal given by PMO, now left with no option they have come with a revised proposal.

Views expressed here are those of C.Srikumar, General Secretary of All India Defence Employees Federation (AIDEF)

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