Amid growing concerns over land-related hurdles delaying several industrial projects in Odisha, the state government has cancelled the allotment/lease of 28.8 acres of government land to Vedanta Limited in Jharsuguda district, citing its prolonged non-utilisation.
The land, allotted to the company in 2013, was found lying vacant during an inspection, with only a boundary wall constructed and no industrial infrastructure or other permanent structures in place. The company had secured a credit facility by mortgaging the leased property.
The land parcel located in Panchapada village under Jharsuguda tehsil was originally allotted to Vedanta Aluminium Limited. The Industrial Infrastructure Development Corporation (Idco) handed over possession through a lease deed executed on October 8, 2013. However, the lease was subsequently executed in favour of Vedanta Limited on January 17, 2020, following a change in the company’s name.
Officials said the land allotment was cancelled by Idco following an inspection conducted by the Accountant General (Audit-I), Odisha on April 16, 2025. The subsequent verification by the land officer, Jharsuguda and additional land officer, Idco, Sambalpur division, also established that the land parcel remained vacant.
“The company failed to fulfil the conditions stipulated in the original lease deed. According to Clause 19 of the allotment letter and Clause 43 of the lease deed, construction needs to commence within the prescribed period. Failure to comply made the allotment liable for cancellation, with the land reverting to Idco free from encumbrances,” said officials.
Before issuing the cancellation order, Idco had issued a show-cause notice to Vedanta on April 9, seeking an explanation for the non-utilisation of the land. In its representation, the company argued that the land parcel was proposed to be used for future expansion, ancillary facilities, industrial support infrastructure, welfare facilities and healthcare-related development.
However, a subsequent field verification confirmed that no substantial construction or industrial activity had taken place on the land. This prompted Jharsuguda Collector to request Idco to resume the land.
“Now, therefore, in exercise of the powers vested in the Corporation and in pursuance of the approval of the managing director, Idco, the allotment/lease of government land measuring 28.8 acres allotted/leased in favour of M/s Vedanta Limited, is hereby cancelled with immediate effect,” stated the October 27 order.
Meanwhile, Vedanta has been directed to hand over peaceful and vacant possession of the land to the competent authority immediately and refrain from creating any third-party interest or undertaking further construction or other activities on the parcel.
The land officer and divisional authorities have also been instructed to initiate the necessary steps for physical resumption, correction of land records and taking over possession in accordance with the prescribed procedure.
The latest action against Vedanta assumes significance in view of the company’s ambitious expansion plans in Odisha. Vedanta Group chairman Anil Agarwal recently discussed a proposed investment programme of around Rs 1 trillion with Chief Minister Mohan Charan Majhi. The company has proposed a new aluminium smelter in Dhenkanal, an alumina refinery in Rayagada and expansion of its existing Jharsuguda operations.
“The loans secured by mortgaging this land parcel have been duly repaid. Vedanta has separately expressed interest in utilising the land for community-oriented public infrastructure such as a comprehensive healthcare facility. Discussions with Idco are currently in progress on this matter,” said a spokesperson of Vedanta Aluminium Metal Limited.
The cancellation, however, comes against the backdrop of Odisha’s broader efforts to retrieve government land lying idle with industrial promoters who failed to implement their proposed projects within the stipulated period.
The state government has repeatedly maintained that industrial land, being a scarce public resource, cannot remain locked up indefinitely in the hands of companies that do not translate their investment commitments into actual projects.
267 land allotments cancelled
The cancellation of the Vedanta land allotment is not an isolated instance. The Odisha government has cancelled 267 land allotments belonging to idle industrial units that failed to start operations or utilise the land allotted to them. Show-cause notices were also issued to 398 more units by March, this year.
A performance audit of land management in the state by the Comptroller and Auditor General (CAG) of India revealed that 12,393.651 acres of land allotted between 1981 and 2021 for establishing industries and allied activities remained unutilised.
Among the major projects, the state government, in 2017, cancelled the allotment of around 1,880 acres of land in Jagatsinghpur district to South Korean steel major Posco for its proposed 12-million-tonne steel plant near Paradip after the project failed to take off.
Similarly, Idco cancelled the allotment of 249.41 acres to Lanco Solar at Ramdaspur in Cuttack district in September 2014 after the company failed to utilise the land for its proposed solar manufacturing facility for over four years.
Land allotments to six industrial units, including Uttam Galva, Sahara India and Visa Power, were also cancelled for prolonged non-utilisation. According to the government circular, industrial land left unused for three years is liable to be reclaimed under its land-allotment conditions.
