West Bengal may consider Urban Land Ceiling Act amendment

After taking over the additional charge of state industry ministry, West Bengal's finance minister Amit Mitra is likely to address the investor community's long-pending demand of amending the Urban Land Ceiling Act (ULCA). This will probably be Mitra's first major agenda in his new role as commerce and industries minister of West Bengal government.

The ULCA was introduced in 1976 to prevent hoarding or excessive land holding in urban centres. The Act prescribes the ceiling limit on vacant land in urban area at 7.5 cottahs (one-eighth of an acre). Industry players claim that this limit has come in the way of implementing projects in the urban area.

While the Trinamool Congress (TMC)-led state government has already made it clear that it would not deviate from its stand of not repealing the Act, sources say that it is now exploring possibilities of relaxing some of the norms.

Soon after assuming office as the state industry minister, Mitra had a meeting with the state chapter of the Confederation of Real Estate Developers Association of India (CREDAI, Bengal).

The issue related to ULCA was discussed in that meeting.

"In real estate projects, the land is finally owned by those who reside in the complex. This way the social purpose of ULCA is anyway met, as no single person owns more than 7.5 cottahs of land. Keeping this in mind, we hope the state government will accelerate the process of giving clearances to real estate projects," Santosh Rungta, former president of CREDAI, Bengal told Business Standard.

He added that the state government appears to favour the real estate association's suggestions.

"The intent of the government appeared positive. I think now work will resume in projects that have been held up for quite some time now," Rungta said.It is also learnt that the state government is considering a proposal to keep the information technology (IT) industry outside the purview of the ULCA.

The central government had repealed the ULCA in 1999 prompting many states like Gujarat to rescind the Act. But some states including West Bengal are yet to withdraw the ULCA. While the CPI (M)-led state government in West Bengal had made efforts to repeal the Act in 2006-07, it failed to convince its allies.

The issue of land and the ULCA had surfaced in the very first month after Mamata Banerjee became the new chief minister of West Bengal in 2011.

In one of her investors' meets, Adi Godrej, chairman of Godrej Properties requested Banerjee to repeal the Act. In TMC's party manifesto it is mentioned that repealing the ULCA is against its policy.

But given the slow progress in industrial development across West Bengal, the state government now appears convinced to consider certain proposals relating to land holdings.