Home / Industry / Infrastructure /  West Bengal amends Land Reforms Act to boost investments

Kolkata: West Bengal’s lawmakers on Wednesday amended the state’s restrictive land laws to allow development of large housing projects, capping three years of lobbying by property developers for exemption of real estate projects from the ceiling on private ownership of land at 24 acres.

After the latest amendment to the West Bengal Land Reforms Act, township development has again been included in the exempted category under section 14Y of the law.

After Trinamool Congress came to power in the summer of 2011, it had removed township development from the exempted category, halting several projects.

There is substantial potential for development of townships in West Bengal under public-private partnerships, said Debashis Sen, principal secretary in the urban development department.

Affordable homes can be built for millions through joint sector development if portions of such projects are reserved for people from economically weaker sections of the society, he added.

It is “a very exciting and significant decision" in addressing the state’s need for affordable housing, said Harsh Vardhan Patodia, a Kolkata-based developer and vice-president of Credai, a real estate lobby group. For a township project to be commercially viable, a developer needs to build at least 5,000 residential units spread over 50 acres, he said.

Interest in such projects will be determined by demand, so developers may not immediately start building large townships in West Bengal, said Abhijit Das who leads the east India business of realty consultancy Cushman and Wakefield. But it is “a positive signal to the industry at large", added Das.

The state would need some 2.68 million new homes by 2030, and most of the demand would come from people from the low- and middle-income groups, according to a recent report to the state government by KPMG, a consultancy firm.

Alongside the joint sector projects, West Bengal should also formulate policies to allow private development of townships, Sen said, adding that it has potential to create thousands of jobs.

The policy reversal on real estate development may have also been triggered by the state’s immediate need to build small townships on the outskirts of Kolkata, said a government official, who did not want to be identified.

West Bengal government is looking to move the district headquarters of South 24 Parganas from Alipore in Kolkata to Baruipur, where land is available with the administration, but development hasn’t started because of the lack of enabling regulatory environment, this person said.

There are similar plans for Kalyani, a town in North 24 Parganas in the outskirts of Kolkata, he added.

The state’s lawmakers also decided to grant up to five years (from three years previously) to start projects for which exemptions were granted from the restrictions on private ownership of land. This is being seen as a recognition of the downturn in the economy in the wake of which the construction several projects across India has been delayed.

Most importantly, it also brings relief to a lot of real estate developers, who had previously acquired land in excess of 24 acres, but because of the earlier revision in laws, were unable to start their projects, said Das of Cushman and Wakefield. This amendment condones the delay as also enables such developers to launch their projects.

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