BackReal estate developers may be allowed in large projects
New model may work in Kolkata’s distant suburbs where land is available at affordable prices
Premium(Pradeep Gaur/Mint)
Kolkata: Six months after barring private real estate developers from building townships in West Bengal, the state government is considering a plan to allow them to undertake such large projects.
Amending Section 14Y of its land ceiling laws in April, the state removed townships from the list of projects for which exemption can be granted to private entities over owning more than 24 acres in rural areas.
The threshold on land ownership is 18 acres in areas that receive irrigation.
Under a yet-to-be finalized housing policy, the state may grant the so-called 14Y clearance to real estate projects—or exempt them from land ceiling restrictions—if at least 51% in each unit is reserved for commercial use.
The rest could be used to build homes, which offer the most lucrative returns to real estate developers.
The state’s aim is to encourage development of integrated real estate projects and to create long-term jobs through them, according to Debashis Sen, principal secretary at West Bengal’s urban development department.
The new housing policy may even require developers to sell homes to those who work at the adjacent commercial blocks in a project, he added, so that people could live and work in the same neighbourhood.
Real estate developers, however, said compliance with this norm is almost impossible.
The state government has consulted real estate developers while framing this new policy, according to Sushil Mohta, vice-president of the West Bengal unit of the Confederation of Real Estate Developers’ Association of India (Credai) lobby group.
The new model may work in the distant suburbs of Kolkata or in the smaller towns in the state where large tracts of land are still available at affordable prices, said Credai’s Mohta.
In his view, the policy will be of little or no relevance in Kolkata and neighbouring Rajarhat town, where such large tracts for integrated projects are not available.
To be sure, home developers have been lobbying the state government for years to abolish the urban land ceiling laws, under which ownership of vacant land in areas notified as “urban agglomeration" is capped at 500 sq. m.
Chief minister Mamata Banerjee is opposed to repealing the urban land ceiling laws.
During recent discussions, developers had suggested that only 20% of large real estate projects be reserved for commercial use, but the state government didn’t agree, according to Mohta.
Instead, it agreed to consider shopping malls and office spaces as non-residential units.
The developers had also proposed that instead of making it mandatory to build commercial blocks, 20% of the space in large housing projects be reserved for building affordable homes, Mohta said.
It isn’t immediately known whether the state government will accommodate this in its proposed housing policy.
In several joint sector real estate projects implemented during the Left Front’s 34-year rule till last year, such reservations for home buyers from economically backward sections were flouted with impunity, according to state government officials, who did not want to be identified.
The state government has started investigations into the affairs of several joint sector real housing companies to dredge out such irregularities, they said, adding that it
would be surprising if the Trinamool Congress government agrees to the same arrangement.
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