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Rediff.com  » Business » Bengal: New land policy favours small projects

Bengal: New land policy favours small projects

September 05, 2011 11:57 IST

LandWest Bengal land acquisition protests in Singur and Nandigram have often been cited as agenda setting events in the country's land versus and industry discourse.

The state now has a new policy, under a new government.

However, the new policy which has been formulated by the new government led by Trinamool Congress chief and now the state chief minister Mamata Banerjee appears to be marred by issues of a perceived contradiction.

Mamata Banerjee, who rode to power on her pro-farmer platform, has ensured a gradual shift toward the Singur model.

Roughly speaking, the Singur model symbolises a stance that multi crop agricultural land must not be acquired for industry.

Not only has the government announced that it will not acquire land for the industry, it is also focused on the correct implementation of the Urban Land Ceiling Act, a move which has created frown-lines on the faces of the state's businessmen.

"How are we supposed to buy land ourselves when we cannot own land above 25 acres. Also there is no policy at all under which industry can buy land in Bengal. It is impossible to acquire land under the present circumstances," said M K Jalan, chairman, Keventer Agro.

According to the ULCA, land holdings above 24 acres are illegal and the government has the right to vest this land within itself. West Bengal is the only state in the country where the ULCA is still applicable.

"The government wants industry to directly purchase land, but given the current laws, even if one gets a 14y license, and acquires more than 24 acres, one end up just holding the land and not owning the land," Jalan further said.

The 14y waiver on the Land Reforms Act, allows a company to acquire more than 24 acres. However, when a company gets this waiver, the company does not own the land but holds it on lease. This means that land, although bought, cannot be sold by the buyer.

"We are the only state where the ULCA is still applicable, but I do not see it getting abolished because of the populist nature of this government.

"Also, the many legal cases that are pending make the abolishing of the ULCA a practical impossibility," said a city based realtor on conditions of anonymity.

According to Anup Sinha, professor at Indian Institute of Management-Calcutta (IIM-C), the pattern of land use determine the pattern of acquisition that are determined by the government.

"Given the fact that the government does seem to be looking at acquiring any land for the industry, and has announced that no fertile multi-crop land can even be acquired for industry, the indications are that the government is in favour of smaller projects," Sinha said.

One has to only glance at the TMC election manifesto, to understand how important the small project scheme is to this government.

The document talks of sectors like tourism and food park besides others, but is silent on investment in sectors like steel, where greenfield projects are land intensive.

The small project scheme is probably what has prompted the government to choose information technology as its industry of focus.

"Given the fact that land and unemployment are two big problems facing Bengal and that there is enough availability of talent we propose setting up of IT hubs in every district of Bengal," chief minister Mamata Banerjee had said at her investors' meet in May.

The sentiments have been reiterated by commerce and industries minister Partha Chatterjee who has said that the government would focus on setting up IT hubs in Darjeeling, Haldia, Durgapur and Siliguri in the first phase.

"IT is a manpower intensive industry, which does not need large tracts of land to be developed. It can be built vertically. I do not understand the need for large campuses; our government will not support the allocation of large tracts to IT companies for campuses," Chatterjee has said.

The land issue marred the allocation of space to companies like Infosys for a long time. In fact in November last year, when the Left Front government allocated 100 acres to the IT bellwether, the company had been scouting for land in the state for over 10 years.

Also, with the new policy, there is a problem given the fact that most IT companies like Wipro, Infosys and Cognizant like to work out of campuses and not built in spaces.

"Campuses are important for two reasons. First, it allows us a long term investment, given that we can keep working space and not have to go scouting frequently," said Wipro chief financial officer, Suresh Senapathy.

Senapathy, who said that while Wipro, the country's fourth largest IT company, had no problems going to tier-II and tier-III cities, it preferred the campus system to built in office space.

"Campuses are important also because according to government of India rules, below 25 acres the operation does not get special economic zone status," he explained further.

The land movement in Nandigram and Singur catapulted to Mamata Banerjee to the CM's chair in Bengal. Since coming to power, Banerjee has remained true to the things that brought her there.

The Singur Act is passed and the case is pending in court, the chemical hub has been scrapped in Nayachar, the power project in Katwa and the nuclear project in Haripur has been suspended as well.

Whether West Bengal can afford a politician who sticks to her word, is another story altogether.

Swati Garg in Kolkata
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