A law introduced in the 1970s may soon be scrapped, opening up massive opportunities in West Bengal. The Urban Land Ceiling Act of 1976 is still in force in West Bengal and is seen as a major impediment to development in the state. Despite the Government of India having already repealed the law with effect from January 11, 1999, states like West Bengal still continue with the law.
The law targets the concentration of urban land by capping private holdings in designated agglomerations like Kolkata, Asansol, and Durgapur. It strictly limits vacant land ownership (typically 500 sqm or 7.5 cottahs) and mandates state acquisition of excess land. Unlike most states that repealed the Act, West Bengal maintains it to prevent land speculation and ensure equitable distribution.
The land acquired under the 1976 Act vests with the state governments. Only the state governments can dispose of such land as per provisions contained in Section 23 of the said Act.
Both the Left Front and Trinamool Congress that cumulatively ruled the state for 50 years had refused to roll back a law that had become an anachronism, but the newly elected BJP government may finally look at scrapping the law and make more land readily available for development.
But with a new BJP government in power in West Bengal, industry bodies are looking at the BJP with hope. Addressing members of Bengal National Chamber of Commerce and Industry, which is one of India's oldest business chambers and was set up in 1887, West Bengal BJP President Samik Bhattacharya also spoke about the possibility of scrapping the Urban Land Ceiling Act and introducing contract farming, something industries and corporate houses have demanded for years. For the first time after the BJP came to power in West Bengal, Samik Bhattacharya hinted at the big change, which will completely overhaul the land acquisition scenario in the state.
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Addressing a gathering of BNCCI members on Tuesday, Samik Bhattacharya said: "We have made the landless, owners here. This is a social change; it was social engineering. But unfortunately, we failed to implement the next stage, which was to bring in a cooperative movement."
"There is no contract farming in this state. Urban land ceiling is a major hurdle. We are thinking about it and will remove it. But through you, we want to give a message to everyone: in the future, if someone wants to set up a factory, no political party worker will come to you asking for money," Bhattacharya added.
"There are no land hurdles. We will bring in our new land policy. The model that is successful in Punjab, Haryana, and Maharashtra. If 1,000 acres of land are needed, acquire 1,100 acres. After the land is developed, return the 100 acres properly to those whose land is being taken," Bhattacharya said, speaking about the roadblocks in land acquisition for projects in Bengal in a bid to woo big ticket projects to West Bengal.
Industry bodies are welcoming the move. "During the Left Front regime and the Trinamool regime, the act continued to remain in force although by 2000, almost all the states in the country scrapped it. But even after so many years, this has continued. The act, instead of doing any good to the public, has become a big hurdle in the development of the state. In fact, by scrapping the act and bringing those lands into the fold of development, the actual purpose of the act will be achieved," Sushil Mohta chairperson of Merlin Group and president of Credai West Bengal, told NDTV.
"Today land is no more an asset to be held but rather it is a raw material for development. By scrapping this act, large scale of development will be possible. Unfortunately, due to the land ceiling act, lands were fragmented and they were sold in small parcels resulting in chaotic, unplanned and haphazard development of small buildings where the full potential of the land was not utilised. But now by bringing a large chunk of land into the fold of development, pursuant to the scrapping of the urban land ceiling act, we will be able to attract FDI, institutional investment, multi-national companies coming to Kolkata and other cities of Bengal," Mohta added.
States that have repealed the Urban Land (Ceiling and Regulation) Act, 1976 have unlocked significant potential in real estate development. States like Haryana, Punjab, Uttar Pradesh, Gujarat, Karnataka, Madhya Pradesh and Rajasthan immediately repealed it after the Centre passed the Urban Land (Ceiling & Regulation) Repeal Act, 1999, which was notified on January 11, 1999. Maharashtra repealed the act in November 2007.
While West Bengal has not repealed the law, calls for repeal now are growing louder as experts believe that the repeal of the act will unlock potential in the state. The BJP has promised reforms and a push for industry in the state after a decline in economic performance for five decades. And one of the key areas of opening up for industry and unlocking potential will be removal of roadblocks and laws that have held the state back for years, especially antiquated, anachronistic laws to re-energise urban hubs in West Bengal.
Speaking at the NSE recently, Sanjeev Sanyal, member of the Economic Advisory Council to the Prime Minister, said: "A few high-growth urban hubs are critical to generating high growth. Eastern India's problem is that its heavyweight Kolkata has not been pumping for half a century at least. It's a bit sad because it is my hometown. But I am witness to what happened to Kolkata in the 80s in particular. Kolkata did not die, it was murdered. And I am a witness to the murder. It did not only see de-industrialisation that happened. Once it went into that loop, it took with all the other dynamics of society."
"Now that the political configurations in Eastern India have suddenly shifted very dramatically, we can now begin to think of it in a very different way. After a very long time, there is actually a political dispensation in Bengal and the centre at the same. For the very first time in two generations, the underlying economic philosophy of the regime is pro-growth. And this is not only important from the perspective of West Bengal and Kolkata itself. It is a critical part of getting eastern half of India to fire again," Sanyal added.
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