The Comptroller and Auditor General (CAG) has pulled up the Kerala Forest Department for failing to revise the licence fee on over 2,400 hectares of forest land leased to Tamil Nadu under the Parambikulam-Aliyar Project (PAP) close to seven decades back.

The non-levy of revised licence fee from Tamil Nadu led to a shortfall in revenue amounting to ₹1.14 crore for the period from 2012-13 to 2023-24, calculated for an extent of 2,455.23 hectares, along with an interest liability of ₹56 lakh calculated at the annual interest rate of 12%, according to the report.

The licence fee is still being paid at the rate revised on April 1, 1998, according to the CAG.

Noting that land tax in Kerala was revised on three occasions since then, the CAG has asked the Forest Department to launch measures to recover the money at the earliest and also “monitor” the prompt revision of fees in line with the land tax rates.

The Kerala government entered into an agreement with Tamil Nadu to lease out 2,467.27 hectares of forest land for 30 years for the PAP, effective from November 9, 1958. As per the licence agreement, Tamil Nadu was required to pay the fee based on the prevailing land revenue rates in Kerala.

At present, the actual forest land area under lease with Tamil Nadu is 2,455.23139 hectares. The initial lease agreement for the Project expired on November 8, 1988, after the 30-year period. No fresh agreement was executed, and Tamil Nadu had continued to remit the licence fee based on the land revenue rate prevailing in Kerala since the revision on April 1, 1998 (₹100 per hectare), according to the CAG.

Since then, the land tax in Kerala was revised on three occasions. The annual rate was revised to ₹2 per Are (₹200 per hectare) from April 1, 2012, to ₹5 per Are (₹500 per hectare) from September 30, 2014, and to ₹8 per Are (₹800 per hectare) from April 1, 2022.

The government informed the CAG that it had issued a notice to Tamil Nadu requesting the payment of the arrears in licence fee along with the accrued interest.