Gandhinagar, Nov 15 (IANS): The Gujarat Government ere on Wednesday decided to wind up the Gujarat State Land Corporation, which had been shadowed by corruption for long.

Though the state government has refrained from giving the reasons for the decision, which is a first case of a public sector undertaking being closed down in Gujarat, official sources said the corporation had become a liability.

Agriculture Minister R.C. Faldu told reporters that all the functions of the corporation would now be passed on the state agriculture and irrigation departments.

Faldu added that the 400-odd employees of the corporation would be absorbed in other government departments and the PSU would continue to be operational till this process was completed.

The GLDC was set up to conserve and develop land and water bodies in the state but it was clouded by allegations that nothing much had moved in the corporation where finances allocated for major works were siphoned off or underutilised.

Raids by the Anti-Corruption Bureau in recent months yielded Rs 56 lakh in cash from the office of the corporation in Gandhinagar, while its managing director was also arrested. Inquiries had revealed, among several other things, that works related to deepening of the ponds and small lakes remained only on paper while multi-crore rupee contracts had been awarded for the same.

Gujarat Congress President Amit Chavda expressed surprised at the government decision and said it would deprive the farmers of various benefits.

Chavda asserted that the state government was essentially trying to gloss over corruption in the Corporation by simply closing it down.

Congress MLA Naushad Solanki claimed that names of several senior other corrupt officials would have emerged if the government had allowed the Corporation to function further.