Bengal's 'no sops' policy affects real estate market

Even as West Bengal chief minister is vying for investment in real estate in the state, the contentious issue of land, and the state's categorical emphasis on the “no sops” policy for the developers is likely to keep Kolkata bereft of high rises.

Recently, the chief minister inaugurated a three-day conclave on urban infrastructure, Bengal Builds, with top city and few pan India developers as invitees.

However, much to the disappointment of the realtors, Banerjee proclaimed that Bengal has been left neck-deep in debt, so no freebies for real estate developers.

“What you can avail of in Delhi, Mumbai, Gujarat or Chennai, don't expect the same in West Bengal right now. Due to 35 years of Left rule, the state is neck-deep in debt and I am repaying thousands of crores (rupees) as interest alone,” she said at the inaugural day of the meeting. However, she added. “My heart is with you but my hands are tied.”

 

However, the heartfelt request is expected to find little response, unless the state repeals the urban land ceiling land and addresses the issue of land availability, particularly the procedure of converting agriculture land to land suitable for housing projects, feel developers.

“There are many issues which need to be addressed for a conducive environment for urban development. Availability of land, its conversion from agriculture to land for housing development, the repeal of urban land ceiling act and also issues surrounding height of buildings are problems that need to be addressed,” said Santosh Rungta, a city based realtor and past president of CREDAI (Confederation of Real Estate Developers Associations of India).

In view of the problems faced by the industry, a task force consisting of the state Urban Development minister, Finance minister and Commerce and Industries minister and representatives from the different city-based chambers of commerce has been formed to look into the matter. The task force will submit its report to the Chief Minister within 15-days.

“Sops are not required to repeal the ULCA Act or giving case to case clearances. The CM has promised a task force to look into the problems of the real estate sector, and we are hopeful some solution would be found out,” said Pradip Chopra of PS Group.

One of the biggest hurdles in developing new townships in West Bengal is the Urban Land (Ceiling and Regulation) Act (ULCA), 1976. According to the Act, the ceiling limit on vacant land in a category ‘A’ city like Kolkata is 7.5 cottah or about 500 square meters.

West Bengal is one of the few states in the country to have a legislation like the ULCA. The move is in sync with the apprehensions of the chief minister.

After all, Banerjee had once wondered, “What will happen if someone wants to buy the city?"

The demand for repealing the ULCA was raised for the first time by Godrej Properties chairman Adi Godrej, at an industry meet within the first month of Banerjee taking over the chief minister’s office.