The Bengal government is all set to amend a 68-year-old law — The West Bengal Land Reforms Act 1955 — to unlock government land parcels for commercial and industrial use.
It is likely to introduce a bill in the state assembly in the budget session. This bill is to garner revenue for the state exchequer as so far the land for commercial use was available for a 99-year lease.
A minister said, the state government is bringing the amendment in the assembly so that the land parcels can be offered to commercial houses for lifelong possession instead of the earlier norm of 99-year lease. Thus, instead of the leasehold many industries would like to buy land plots and from it the state exchequer is expected to gain.
However, this change of stance from leasehold to freehold is a major shift in the policy decision of the Trinamool government, as in 2012 it was decided that industries would be offered land plots on a 99-year lease. But now the proposed bill is going to unlock the government land for the industry. Many land parcels in Kolkata would also be offered to the industries, officials said. Thus except khas land – which is used for personal cultivation and land under bargadari – will be available for freehold. Industries had welcomed the move thus making land available from leasehold right to freehold right, which was reported by TOI after the cabinet decision of January 11.
Officials are mulling amending section 3A of the 1955 Act which deals with the “right of the non-agricultural tenants and under-tenants in non-agricultural lands to vest in the state.” The state will also have to amend and introduce new clauses in the 1955 Act which deal with the amount to be paid for the land. Till now to get a land lease, 95% of the market price of the land had to be paid in advance, and 0.4% of the land price had to be paid annually. Now to get freehold rights, an additional 10% of the land prices have to paid. Thus, sources pointed out, changes need to be brought about in the old law.
However, the Bengal government made an exception to its policy of 2012 in 2017, when it gave 50 acres of the land freehold to Infosys on the condition that the company would use 51% of the plot for IT and ITeS services.
The Housing Infrastructure Development Corporation (HIDCO) in September 2022, invited applications for freehold transfer of a 10-acre government plot at Tagore Park for residential and commercial use. But all these were done on a case-to-case basis without a general policy guideline.
Investors have been asking for freehold land because of its bankability. The government, on the other hand, can mop up more revenue if it gives land freehold instead of giving it on lease.
The fact came to light during the e-bidding of the HIDCO plot in September. There was a huge response from the investors while the HIDCO fixed the start bid price at Rs 177.3 crore.