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West Bengal minister says land buys best left to industry

West Bengal minister says land buys best left to industry
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First Published: Sun, Jun 21 2009. 11 53 PM IST

Updated: Sun, Jun 21 2009. 11 53 PM IST
Kolkata: West Bengal’s finance minister Asim Dasgupta says land acquisition for industrial projects is better handled by business leaders than the government, a statement that goes against the policy of the state’s Marxist-ruled government.
“Very often, industrialists can handle it (land acquisition) better (than the state government),” Dasgupta said at Mint’s Clarity Through Debate conclave in Kolkata on Friday, citing the example of “hundreds of small and medium” industrial units in the state for which farmland had been acquired by the owners on their own.
If large tracts are needed, industrialists and the state government should only consider sites in “the arid regions in the western parts” of the state, where agricultural yield is low, and not in the fertile Gangetic plains in the south of West Bengal, added Dasgupta, who set the tone for the discussion by saying, “Let’s not try to defend ourselves too much.”
It’s the first time that Dasgupta has spoken out against the West Bengal government policy. His views come against the backdrop of the Left’s 20-seat loss from the eastern state in the April-May general election that dealt a severe setback to the ruling Communist Party of India (Marxist), or CPM, and its allies.
The West Bengal government forcibly acquired 1,000 acres of farmland in Singur, in Hooghly district, despite its high agricultural productivity. The land was meant for Tata Motors Ltd to set up a factory to manufacture its Rs1 lakh small car, the Nano.
But the project didn’t take off. The factory in Singur was almost ready when, in October, Tata Motors pulled the plug on it and shifted the project to Gujarat in the wake of violent protests by locals led by the Trinamool Congress—West Bengal’s main opposition party.
Call for change:West Bengal finance minister Asim Dasgupta. Indranil Bhoumik / Mint
The state government has maintained that it is difficult for industrialists to acquire land on their own, and has offered help to everyone who asked for it. But almost all projects for which it has tried to acquire land, such as in Singur and Nandigram, in East Midnapore, where Indonesia’s Salim Group had proposed setting up a chemical hub, are either stuck or had to be abandoned.
Land acquisition should be “completely left to market forces”, said Abhirup Sarkar, professor of economics at the Indian Statistical Institute, or ISI, in Kolkata.
“So far, the state government’s argument against this was that middlemen would deprive farmers of fair valuation, but farmers understand very well what price their land could fetch. The government should not get into this—it shouldn’t become a land acquiring agency—and instead, focus on building social and industrial infrastructure, which has been its classical role.”
Land is scarce in West Bengal because of high population density which, according to Dasgupta, is the highest in the country—at 980 people per sq. km. “For anyone to get land in West Bengal is difficult…yes, we need industry, but less land-intensive industry,” he said. Sarkar, however, said the size of the plot is not the problem in itself. “People have resisted acquisition of small plots as well.”
Dasgupta criticized West Bengal’s bureaucrats, too. “Entrepreneurs are facing real problems with procedural delays (in obtaining clearances from the state government)…we have to change, no doubt about it.”
Admitting that the so-called single window for government clearances that West Bengal had set up “is not effective at all”, the state’s commerce and industry secretary Sabyasachi Sen said, “We have recommended to the state planning board that because there are various departments—some 21 or 23—that give these clearances, the rules should be simplified, and that if not one window, there should be six-seven windows that give these clearances.”
Dasgupta, meanwhile, reiterated the state government’s willingness to resolve its longstanding dispute with The Chatterjee Group, or TCG, over the ownership and management of Haldia Petrochemicals Ltd (HPL)—a firm promoted jointly by them.
“I was closely connected with HPL initially and I know exactly what problems are cropping up... Both sides (TCG and the state government) should bend (over) backwards and accommodate (each other). We should and if we do that, we can solve it.” He was addressing Aniruddha Lahiri, TCG’s president, who was also a speaker at the conclave.
TCG and the state government are battling court cases over the ownership of HPL after they failed to conclude a deal on transfer of ownership a few years ago.
West Bengal’s commerce and industry minister Nirupam Sen said in a recent interview that the state government was willing to sell its stake in HPL to TCG, provided its entire 43.27% equity interest was acquired at one go. A 2005 deal fell apart because TCG wanted to buy the stake in instalments.
aveek.d@livemint.com
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First Published: Sun, Jun 21 2009. 11 53 PM IST