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Bengal set to amend Urban Land Ceiling Act

Probal Basak & Swati Garg  |  Kolkata 

In the New Year, Mamata Banerjee’s government is finally in the process of readying its first formal sop for attracting investment in the state, seven months after she assumed charge of West Bengal.

The government led by the Trinamool Congress (TMC) is currently putting final touches to a proposal. This, when implemented, will place the information technology industry outside the purview of the Urban Land Ceiling Act (ULCA).

Incidentally, Banerjee had, earlier accorded priority sector status to the IT industry, on the back of thinking that the sunrise sector has the ability to create employment without an influx of large tracts of land. Recently, the government roped in leading infrastructure and finance player IL&FS to develop an IT hub in the state.

State industry and IT minister Partha Chatterjee said IT is identified as one of our priority sectors. “We are discussing the issues for quite some time. We have almost finalised to take a decision in this direction,” he told Business Standard in response to a query.

The issue of land and the ULCA had popped up within the first month of Banerjee taking over the CM’s office when at her investors’ meets Godrej Properties chairman Adi Godrej requested her to repeal the Act. Since then, the TMC has hardened its stance of land in general (refusing to acquire anything for the industry) and the ULCA in particular. Last month, in an interview to a television channel, Banerjee had also gone on record to say that she was against repealing the ULCA, for she was fearful in case someone tried to buy Kolkata. “What will happen if someone wants to buy the city?” she told the channel.

Sector-V association noted that IT “anyway does not require” too much land. “Putting the industry out of the purview will show a positive intent. This, in my opinion, will translate into more investment,” said its vice-president Kalyan Kar.

According to the Act, introduced in 1976 to prevent hoarding or excessive holding of land in urban centres, ceiling limit on vacant land in urban area is 7.5 cottahs (one-eighth of an acre).

While the Union government repealed the Act in 1999 and many states like Gujarat was quick to rescind the Act, West Bengal is yet to do the same. However, efforts were made by then CPI(M)-led government in 2006-07 to repeal the Act, but it failed to convince its allies to agree to this. Also, the state government is also understood to be exploring the possibility of modifying other land-ceiling clauses as well to address some concerns of the industry.

The government has sought suggestions from pertinent ministries and industry bodies on amending Section 14Y of the West Bengal Land and Land Reforms Act, 1955, which grants exemption from the land ceiling to certain categories of industry. The exemption is confined to “tea gardens, mills, factories, workshops, livestock breeding firms” with no room for modern ventures like information technology. “More sectors need to be included so that industrial parks can come up,” Chatterjee said.

The 14Y clause made headlines recently when the government vested the 270 acres from the Jindal Project at Salboni. This was because, according to the state government, it had been acquired by the company directly, without first getting the clearance. “For most IT companies, we will explore every location which is on offer,” said a top Wipro official.

“It helps when there are sops for land and building. Amendment in the ULCA and an easing of land norms will definitely be an attraction.”

The need for sops to the industry has become more and more obvious to the new government because there have been no major proposals for industrialisation since Banerjee has taken over. Put in context, the situation seems worse, given the Rs 1.92 lakh crore debt burden on the state government.

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First Published: Mon, January 02 2012. 01:23 IST