The Punjab Government’s move to recover Rs 6,400 crore from development authorities, including GMADA, under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act, 2013, has come under the scanner of the Accountant General (Audit), Punjab.
Questioning the accounting treatment of the massive transfer, the AG has asserted that the funds, statutorily linked to food security obligations, cannot be merged into the Consolidated Fund for general budgetary use. They must instead be kept in the Public Account as a dedicated, ring-fenced fund.
In a letter to Additional Chief Secretary (Finance) Alok Shekhar, Accountant General Kumar Abhay, has flagged multiple structural anomalies in the handling of these remittances made by GMADA during the financial year 2025-26.
Earlier this year, the Finance Department had directed development authorities to deposit money against thousands of acres of land acquired over the years for urban development. Citing Section 10(3) of the RFCTLARR Act, it said the authorities were required either to develop equivalent cultivable land for agricultural purposes or deposit an amount equivalent to the value of the acquired land. Neither was done.
The state claimed it had spent a whopping Rs 94,443 crore on enhancing food security since the Act came into force. Based on acquisitions by development authorities, including in Mohali, the government sought Rs 8,710 crore. GMADA, acting as the nodal agency, remitted Rs 6,400 crore in tranches, including a final instalment of Rs 2,500 crore pooled through a three-year loan from a sister organisation that had Rs 3,770 crore parked in fixed deposits with banks.
However, the AG has objected to the Finance Department crediting these deposits as revenue and showing the transfer as a capital account-balancing mechanism between GMADA and the state treasury, rather than routine revenue.
It has further pointed out that scrutiny revealed that Rs 927.90 crore was demanded and transferred against the “Low Density/High Density Scheme” even before the scheme was formally announced as of January 2026. This forced GMADA to rely on high-interest commercial overdrafts, causing avoidable financial stress on the authority.
The Finance Department has been asked to examine the matter, reverse the credit from the Consolidated Fund revenue heads, and place the deposits under a distinct head in the Public Account.
