Kolkata: When Jai Balaji Industries Ltd., a Kolkata-based steel maker, decided to build a Rs16,000 crore plant in Purulia, the least fertile district of West Bengal state, it set out to acquire 3,800 acres of land. But eight months after signing an agreement with the state government to build the five million-tonne project, it has just 17 acres to show for its effort, says S.C. Tewary, principal secretary for the land and land reforms department.
The steel maker believes it is impossible to acquire the land on its own and has asked the West Bengal government to step in, says Ajay Jajodia, chairman and managing director. “The price has risen sharply, and what the government is paying now is about four times our initial estimate,” he said. Jajodia wants the government to deliver the plot within “a couple of months,” but that isn’t likely to happen.
Big-ticket projects such as Jai Balaji’s are foundering on land acquisition in a setback to West Bengal’s effort to attract investment and create jobs. The government has been encouraging investors to buy agricultural land they require directly from farmers, but many companies are throwing up their hands and seeking state intervention.
The delays expose the political sensitivities over land acquisition in the state, where the Marxist-led government has faced massive opposition to the Tata Motors Ltd. project in Singur and a proposed chemical hub in Nandigram.
Fourteen people were killed in police firing in Nandigram on 14 March 2007, slowing land acquisition for industrial projects.
And setbacks for the ruling Left Front in recent rural elections may only reinforce the state’s reluctance to acquire land. On 5 June, urban development minister Ashok Bhattacharya virtually called off a 4,840-acre township that DLF Ltd had proposed at Dankuni near Kolkata, saying the government wouldn’t acquire land without people’s consent.
Some projects have been stuck for years. West Bengal Industrial Development Corp. Ltd, an arm of the state government, hasn’t completed the land acquisition for a steel plant proposed by Tata Metaliks Ltd even after three years.
“If it’s a question of a few acres, a company could approach farmers and buy land directly from them. But, if you are talking of a large tract of land, most companies wouldn’t have the wherewithal to handle it,” said Harsh Jha, managing director of Tata Metaliks.
The state government may have to start acquiring land again, despite the Left Front’s losses in village elections, to get the planned projects off the ground. It has preliminary agreements in place with companies to set up 15 large projects, including steel and power plants.
“They might wait for the dust to settle... maybe till the Lok Sabha elections are over,” said Kalyan Sanyal, professor of economics at Calcutta University. “But this government doesn’t have a choice—it can’t afford to let investors turn their backs on West Bengal.”
Aveek Datta contributed to this story.