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Big business in India's small towns
Gargi Gupta in New Delhi | August 12, 2006
Clearly, a lot of people have been buying or selling land in Singur and adjoining areas lately.
Singur, a small town in Hooghly district with a population of 20,000, came into the limelight early this year when Tata Motors chose it as the location for the manufacturing facility of its budget car that will be priced at Rs 1 lakh.
The West Bengal government, through its agency, the West Bengal Industrial Development Corporation, has already begun acquisition of approximately 1,253 acres (165 acres in the first phase) - in the face of much opposition - which it aims to finish in the next 6-8 months.
The Tata project is a prestige issue with the state government, which is going all out to woo big industry and investments. The opposition has been concentrated around the fact that all these industries will be coming up on agricultural land.
Last month, the state cabinet cleared a land-acquisition proposal of 43,180 acres - concentrated in districts of North and South 24 Paraganas, East Midnapore, Howrah, Hooghly and Burdwan, all within a radius of 100-150 km around Kolkata - for building SEZs, townships and industrial parks.
The outcome: prices of land in all these locations have gone up by leaps and bounds. Brokers and real estate agents, who are by no means very reliable sources for such information, say the increase has been 100 per cent and for advantageously located places, 200 per cent.
But what is most significant is that data from the Hooghly district's registry office, which like all government data errs on the side of conservatism, also paints a similar story.
This despite the fact that the computerisation of land registry operations, implemented in Hooghly in the last year or so, has meant that extraordinary increases in market value (the figure on which stamp duty is calculated) are generally not reflected in the records.
Here the software itself generates the market value of the land changing hands, taking into account various parameters like locality, position within that locality, land use etc. There is very little leeway here for the registry officers to record the extraordinary prices that plots are selling for these days.
So all S Biswas, additional district sub-registrar, can do is note down the extraordinary valuations in his register for use when the District Level Monitoring Committee gets down to re-evaluating market value in these areas.
For example, he has noted down that a 22.5 decimal plot (1 acre=100 decimals) in Bajemelia village sold last month for Rs 5,04,022. Or, that another tiny 436 square feet commercial plot, in Kismet-Apurbapur moujah, sold for Rs 67,000.
In fact, the DLMC for Chinsurah has already initiated a re-valuation exercise in nearby Shrirampur and Chandannagar sub-divisions where it has asked for a 10-15 per cent across the board increase in market value.
Government records also show that registrations in the entire Hooghly district have increased by 71 per cent in the first four months of this financial year, compared to last year; while revenue accrued has also gone up by 110 per cent.
The Singur ADSR's office alone has overshot its revenue targets in land registration by 24 per cent. Clearly, people have not waited for August 1, when the 1 per cent stamp-duty rate cut announced in the state budget would come into effect, to legitimise their dealings.
Most of these transactions in land are speculative, says Biswas, with people buying land from impoverished farmers hoping for a higher price from the government.
Indeed, the compensation policy of the state government, as per the Land Acquisition Act, does say that in addition to the market value of the land, the land-holder will be given a solatium of 30 per cent plus 12 per cent interest on the value of the land for the period between notification and final transfer.
The speculative dealings have now come down, he says, with the government notifying a freeze on land registration in the mouzahs of Chanditala, Shrirampur, Dankuni and Singur in early July.
But there are still some dealings going on primarily by organised players, Biswas notes, in the areas adjoining Durgapur Road, which will be ideal for setting up shops, restaurants and other services necessary in the new industrial town.
The story in Singur is not an isolated one. Many areas where the government has declared it will acquire land - Dankuni, Uluberia, Sonarpur-Baruipur, the areas of Rajarhat outside the notified New Town, the lands abutting Bombay Road and Delhi Road - have become hot spots for property dealers.
But while all the activity surrounding land transactions may bring prosperity to some, one question remains: What will happen to all the farmers who are selling off their land?