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While Farmers Starve, Tamil Nadu Government Dawdles Over Collecting ₹2081 Crore In Rent From Cricket Association

Is it a case of the political-bureaucratic-business nexus depriving a fund-starved state of its legitimate revenue?

07/08/2017 8:55 AM IST | Updated 07/08/2017 11:53 AM IST
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Is it possible that a government has forgotten to collect its rent worth hundreds of crores for 15 years? Or is it a case of the political-bureaucratic-business nexus depriving a fund-starved state—where farmers are losing their lives—of its legitimate revenue?

A recent CAG report has revealed that the Tamil Nadu Cricket Association (TNCA) owes more than ₹2000 crore (₹2081 crore, to be precise) to the Tamil Nadu government as the lease rent for the M A Chidambaram Stadium (popularly known as Chepauk Stadium) since the year 2000. The TNCA's plea is that the government never fixed the rent; or if it did, it failed to communicate its decision to the TNCA. The report also states:

"The lease rent for the remaining 15 years was, however, not fixed by the government of Tamil Nadu. Scrutiny of records revealed that the lease rent had neither been fixed nor collected from the TNCA and MCC for the period from 2000 to 2015, due to delaying tactics adopted by the government (Revenue Department)."

Can the case be as simple as the government forgetting to collect its due? The Tamil Nadu administration enjoys a formidable reputation for efficiency; many government schemes that flounder elsewhere succeed in making the last-mile delivery in Tamil Nadu, supposedly because of an institutionalised bureaucratic mechanism. The general impression is that irrespective of the party in power—DMK or AIADMK—and the vagaries of political leadership, the bureaucratic system in Tamil Nadu has helped the state become one of the most successful in India (next to Kerala) with regard to Human Development Indicators. So, how did such a super-efficient bureaucracy completely lost sight of collecting revenue from a prized property leased out to the Tamil Nadu Cricket Association and Madras Cricket Club (MCC)?

It is quite possibly a story of the complicity of the big bosses of the state Revenue Department and that of the TNCA.

Obviously, the story lies elsewhere. It is quite possibly a story of the complicity of the big bosses of the state Revenue Department and that of the TNCA. The TNCA has for years been headed by the formidable and controversial, business tycoon N Srinivasan who has recently been debarred by the Supreme Court from attending BCCI meetings. The Tamil Nadu government, during the last 17 years, has been ruled by both the regional parties, DMK and AIADMK.

It may be noted that the Tamil Nadu government first leased out the 7.52 lakh sq ft stadium to the TNCC and MCC in 1965 for a period of 30 years. When the lease deed expired in 1995, a fresh agreement was signed between the two parties, extending the lease for another 20 years. However, the initial lease rent was at that time fixed for only five years, with the stipulation that from the year 2000, the rent would be revised every three years, keeping market conditions in the mind.

But then there was the catch. From 1995 till 2000, the Tamil Nadu government collected the rent at the agreed rate but thereafter, the government did not fix a revised rate. The TNCC and MCC officials now say that they couldn't have paid the rent since the government did not fix the new rate. Then, why didn't they continue to pay the rent at the old rate? The cricket officials argue that they were not authorised to make the payment without a formal demand from the government.

How did such a super-efficient bureaucracy completely lost sight of collecting revenue from a prized property leased out to the Tamil Nadu Cricket Association and Madras Cricket Club (MCC)?

Did the government completely sleep over the matter? Yes, for almost 14 years. Of course, in March 2007, the Additional Chief Secretary dealing with revenue matters and the Commissioner for Land Administration (CLA) made the formal move to fix the rent and put up a written proposal for the same. But their note to the Revenue Minister and Revenue Secretary went unheeded. When the Chennai collector also moved a proposal, with a specific note enumerating the enhanced rent, the Revenue Secretary resorted to the time-tested method of delaying a process by setting up a Joint Committee to determine the fair value of the lease rent

This decision of the Revenue Secretary was surprising as the Revenue Department of Tamil Nadu government had a well-established rule to charge lease rent at the rate of 7% of twice the market value of the property in the case of people or organisations dealing with commercial activities, and at the rate of just 7% of the market value in case of people or organisation who use the premises for charitable purposes.

The Tamil Nadu Cricket Association is, by all parameters, a commercial body that not only hosts tests and one-day international matches, but also immensely profitable Indian Premier League matches. However, the TNCA claimed that it was a no-profit organisation and its activities were, for all formal purposes, charitable, not commercial.

The Tamil Nadu government could have gone ahead and fixed the rent even conceding to the specious argument of the TNCA, but it did not. It obviously wanted to sleep over the matter.

The reality is that the people of Tamil Nadu are the ultimate losers as a consequence of this apparent collusion between the government and TNCA officials.

The matter again came to a head in January 2014 when the Chennai collector submitted a proposal to the Commissioner of Land Administration (CLA) for collection of all arrears from the TNCA. Curiously, this time, the CLA did not forward it to the Revenue Secretary. Instead, he fixed the rent as per the existing government rules, and in April 2014, noted a demand of ₹1834.78 crore to be recovered from the TNCA. The TNCA has hotly contested it saying that by paying this amount of money, it should be owning the property instead of leasing it. The TNCA officials have argued that the rent value could not have exceeded ₹500 crore.

This dispute has been raging since April 2014 and the amount remains unpaid. The CAG calculated the rent for another 20 months, till December 2016, at the rate stipulated by the government and added another ₹246.3 crore to the outstanding amount, bringing it to a whopping ₹2081 crore.

Incidentally, the lease agreement between the Tamil Nadu government and the TNCA expired in April 2015, exposing the TNCA to the accusation of illegal occupation of the government property.

But, apparently, neither the Tamil Nadu government nor the TNCA is overly worried—both claim that the matter will be sorted out in due course.

The reality is that the people of Tamil Nadu are the ultimate losers as a consequence of this apparent collusion between the government and TNCA officials.

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