Kolkata: A Bill to amend land ceiling laws in West Bengal first moved in the state assembly in December 2006, lapsed on Thursday because the ruling Communist Party of India (Marxist), or CPM, couldn’t convince its allies to agree to the amendment, which would have enabled private players to acquire land on their own for industrial projects such as special economic zones (SEZ), information technology (IT) parks, biotechnology parks and infrastructure projects such as roads, bridges and logistic hubs.
Under the West Bengal Land Reforms Act, private ownership of agricultural land in the state is capped at 17.5 acres for irrigated areas and 24.5 acres for areas that are only rainfed; in urban areas, private ownership is capped at 7.5 cottahs or one-eighth of an acre.
Only “tea gardens, mills, factories, workshops, livestock breeding firms, poultry farms, dairies and townships” are exempt from the restrictions of the land reforms Act.
With as many as 14 SEZs in West Bengal having already obtained the Union government’s approval, and several biotechnology and IT parks in the pipeline, the state’s commerce and industries department had tried to enable developers of these projects to acquire land on their own by amending land ceiling laws.
Conflict site: A file photo of Tata Motors’ Nano factory in Singur. The company eventually moved the unit to Sanand in Gujarat. Indranil Bhoumik / Mint
But the ruling CPM faced resistance not only from its allies—the Revolutionary Socialist Party, Communist Party of India and the Forward Bloc— and the state’s main opposition party, the Trinamool Congress, but also from a section of its own leaders.
“I felt the amendment could have encouraged reckless and mindless land acquisition by private companies,” said CPM leader Abdur Rezzak Mollah, who is also the state’s land and land reforms minister. “This, in turn, could have led to accumulation of land in the hands of a few wealthy people.”
However, the state’s commerce and industries department could still try to amend the land reforms act by expanding the definition of the exempted categories to also include IT parks, SEZs, logistic hubs and others, said Nirupam Sen, the state’s commerce and industries minister.
The state government’s inability to amend the restrictive provisions of the West Bengal Land Reforms Act means it will have to continue to acquire land for almost all projects through nodal agencies such as West Bengal Industrial Development Corp. Ltd (WBIDC) though a section of Left leaders such as the state’s finance minister Asim Dasgupta feel businessmen should be encouraged to acquire land on their own.
On Thursday, Dasgupta said in the state legislative assembly that his government wouldn’t forcibly acquire land any more, and that the proposed 100km Barasat-Raichak highway, which was to be built by Indonesia’s Salim Group to connect Kolkata with port of city Haldia, was being shelved.
The state government has faced tremendous resistance to land acquisition over the past three years, and almost all projects for which it was to acquire land have either been shelved or delayed, the most notable among these being Tata Motors Ltd’s small car factory in Singur which eventually moved to Sanand in Gujarat.
Real estate developers, too, would have benefited if the state government had been able to pass the amendment Bill. West Bengal is the only state that hasn’t yet repealed urban land ceiling laws though it has committed to do so to comply with conditions laid down by the Union government for drawing funds under Jawaharlal Nehru National Urban Renewal Mission, or JNNURM—a city modernization scheme.
To circumvent the restrictions on ownership of land, real estate developers in West Bengal acquire land through a chain of companies.
“This leads to a lot of complications and cost escalation because the minimum compliance cost for each firm is Rs1,00,000 a year,” said Pradeep Sureka, state president of Confederation of Real Estate Developers Association of India, an industry lobby. “What is worse, in the event of even one of the (acquiring) companies defaulting in paying taxes or any other statutory due, disputes arise over the title of the whole property.”
Because of restrictions on land ownership in West Bengal, real estate developers can build large housing and commercial complexes only in partnership with the state government or with its approval, securing which takes time, according to Rahul Todi, managing director, Bengal Shrachi Housing Development Ltd, a joint venture between the Shrachi Group and the state government.
“Yet, I’d say these restrictions have some positives: they keep speculators out.”