Despite Slump, Land Elusive In Bengal

Land remains unavailable to entrepreneurs in West Bengal for undertaking industrial projects despite a general slump in the state's real estate prices. This is a peculiar feature which is characteristic of the state although one would always associate non-availability of land with soaring real estate prices.

The dull phase in the real estate industry is a reflection of a nation-wide trend. The approximate decline in the value of property since the last two years is between 25 to 40 per cent in Calcutta. However, land in the state remains a rare commodity owing to the high density of population. While the state occupies only four per cent of the country's land mass it is home to around eight per cent of its population.

This, coupled with the small size of holdings owing to the land reform process, makes it very difficult for land scouters to negotiate with individual owners to buy large tracts of land for setting up industrial projects. As a result, development of the real estate industry in the so-called industrial areas of the state such as Asansol, Durgapur, Haldia and Kharagpur is thwarted.

Moreover, the biggest deterrent to the growth of this sector is the high rate of tax (60 per cent) which the Calcutta Municipal Corporation charges realtors. In contrast, at prime locations in Mumbai the Brihanmumbai Municipal Corporation charges 60 per cent of rent earned as tax including services such as air-conditioning and security.

However, realtors feel Calcutta is on the threshold of a real estate boom in the coming five years, owing to the government's interest in sprucing up infrastructure and the industrial resurgence in the state.