Jharsuguda, Nov 2 (UDN): In a significant move to recover unused industrial land, the Odisha government has cancelled Vedanta Ltd’s lease of 28.8 acres in Jharsuguda district, citing prolonged non-utilisation and violation of allotment conditions. The decision comes amid the state’s wider push to reclaim government land lying idle with industrial units.
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The Odisha government has cancelled the allotment of 28.8 acres of government land leased to Vedanta Ltd at Panchapada village in Jharsuguda district after finding that the company had failed to utilise the property for the intended industrial purpose.
The land, which was originally allotted to Vedanta Aluminium Ltd through the Odisha Industrial Infrastructure Development Corporation (IDCO) in 2013, reportedly remained largely vacant for years. Inspections found that only a boundary wall had been constructed, with no significant industrial infrastructure or permanent structures on the premises.
The action follows multiple inspections and an audit observation that highlighted the prolonged non-utilisation of the allotted land.
According to reports, the Accountant General (Audit-I), Odisha, flagged the issue during an inspection on April 16, 2025. Subsequent verification by the Jharsuguda land administration and IDCO officials also confirmed the absence of substantial construction or industrial activity.
Following these findings, the Jharsuguda Collector requested IDCO to initiate steps to take back the land.
IDCO Issues Notice Before Cancelling Allotment
Before taking the final decision, IDCO issued a show-cause notice to Vedanta on April 9, seeking an explanation for the failure to develop the land.
In its response, the company reportedly stated that the property had been earmarked for future expansion, ancillary facilities, industrial support infrastructure, employee welfare facilities and healthcare-related projects.
However, authorities maintained that the company had not fulfilled the conditions stipulated in the original allotment and lease documents.
Under Clause 19 of the allotment letter and Clause 43 of the lease deed, construction was required to commence within the prescribed timeframe. Failure to comply with these conditions made the allotment liable for cancellation, with the land reverting to IDCO free from encumbrances.
Following the cancellation, Vedanta has been directed to immediately hand over peaceful and vacant possession of the property to the competent authority.
The company has also been prohibited from creating third-party interests in the land or undertaking any further construction or activities on the premises.
IDCO’s land officer and other divisional officials have been instructed to complete the physical resumption process, update relevant land records and formally restore possession to the corporation.
Vedanta Claims Loan Repayment, Expresses Interest In Healthcare Project
Responding to the development, Vedanta stated that the loans secured by mortgaging the leased property had already been repaid.
A spokesperson for Vedanta Aluminium Metal Ltd reportedly said the company had also expressed interest in developing community-oriented public infrastructure on the land, including a comprehensive healthcare facility.
The company had earlier mortgaged the leased property to secure a credit facility. However, the state government’s position was that repayment of the loan or proposed future development did not override the obligation to comply with the original land-allotment conditions.
The government has maintained that industrial land is a valuable public resource and cannot remain unutilised indefinitely.
Under the applicable government policy, industrial land remaining unused for three years is liable to be reclaimed, subject to the conditions of allotment.
Odisha Cancels 267 Industrial Land Allotments Since 2016
The cancellation of Vedanta’s land lease is part of a broader government initiative to recover industrial plots that have remained unused despite being allotted for investment and industrial development.
Since 2016, the Odisha government has reportedly cancelled 267 land allotments involving industrial units that failed to utilise their allotted properties. Show-cause notices had also been issued to another 398 units by March 2026.
The scale of the problem was highlighted in a Comptroller and Auditor General (CAG) performance audit on industrial land management.
The audit found that 12,393.651 acres of land allotted between 1981 and 2021 for industrial and allied activities remained unutilised.
The state has previously taken similar action against several major industrial projects. In 2017, the government cancelled land allotted to South Korean steel giant Posco after its proposed 12-million-tonne steel project failed to materialise.
IDCO had also cancelled the land lease of Lanco Solar in 2014 after the company failed to establish its proposed solar manufacturing facility within the stipulated period.
Allotments involving other industrial entities, including Uttam Galva, Sahara India and Visa Power, have also faced cancellation over prolonged non-utilisation.
Land Cancellation Comes Amid Vedanta’s Major Investment Plans
Interestingly, the latest government action comes at a time when Vedanta is exploring substantial fresh investments in Odisha.
Group Chairman Anil Agarwal recently held discussions with Chief Minister Mohan Charan Majhi regarding a proposed investment programme worth approximately Rs 1 lakh crore in the state.
The proposed investment plans reportedly include setting up a new aluminium smelter in Dhenkanal, establishing an alumina refinery in Rayagada and expanding the company’s existing industrial operations in Jharsuguda.
The cancellation of the 28.8-acre land lease therefore highlights an important aspect of Odisha’s industrial policy: while the state continues to pursue large-scale investments, companies are also expected to adhere strictly to land-use commitments and development timelines.
The government’s latest move sends a clear message that industrial land allotted for investment must be put to productive use within the stipulated period or risk being reclaimed.