WB govt amends Land Reforms Act, exempting real estate projects, to attract investment
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Barun Mitra
Nov 23, 2014, 4:14:01 AM11/23/14
to Property Rights India
West Bengal amends Land
Reforms Act to boost investments
When it came to power, Trinamool Congress removed township development from the exempted category, halting several real estate projects
Mint, November 20, 2014
Read more at: http://www.livemint.com/Politics/L0avG1zWIGh1KuzZpYMtqM/West-Bengal-amends-Land-Reforms-Act-to-boost-investments.html
KOLKATA: In a U-turn of sorts, the maa-mati-manush government is all set to give relaxation on mati, more specifically land ceiling, to make way for townships, logistic hubs, education and medical institutions — a provision it cancelled only two years ago in April 2012 after riding to power on the Singur-Nandigram movement.
A draft Bill — West Bengal Land Reforms (Amendment) Bill — proposes to bring back the relaxation clause under section 14Y given to commercial, civic and infrastructure projects during the Left Front rule.
If things go according to plan, a host of proposals — townships, terminals, logistic hubs, tea gardens, educational and medical institutions, fishery projects, piped transportation of oil and gas, mining and allied activities — are likely to get exemption under the West Bengal Land Reforms Act that debars entities from holding 24 acres in non-irrigated areas and 17 acres in irrigated areas.
According to government sources, business entities already have 12,000 acres of land in possession but are not declaring this because of the land ceiling. The draft Bill allows these entities to hold on to land beyond the land ceiling with permission from the government. To avail this opportunity, they have to declare their land assets and submit project proposals to the government. The government will vest the excess land but allow the entity to use it according to the project proposal once it is approved. The entity has to start work within three years of the approval, failing which the government will take back the land.
Two years ago when Partha Chatterjee was industries minister, the government had argued that setting up townships was not its priority and it would concentrate on affordable housing for low and middle-income groups. The plan didn't work out as the minister said. On the contrary, expansion of urban infrastructure suffered. The government didn't receive any private proposal or FDI to set up mega townships like Rajarhat New Town or the Kolkata West International City in the last two years. The cash-strapped government also couldn't release funds to set up infrastructure on its own.
A rethink started after Amit Mitra took over the industry portfolio. With chief minister Mamata Banerjee desperate to shake off the government's "anti-industry" image, the government gave a push for talks with all stakeholders and strike a golden mean. Some of the realtors urged the government to raise the land ceiling limit under clause 14M, and there was a pressing demand for relaxing the land ceiling for commercial and industrial projects. In fact, the chief minister held a meeting with the Tata companies recently and assured them that land won't be a problem for project expansion. The draft Bill is the first step indicating the government's change of stance from a land-neutral administrator to a facilitator.
Former land and land reforms minister and now an Independent MLA, Abdur Rezzak Mollah, has his doubts though. "It is very easy to say that the government will take back the land if the project doesn't start within three years from the zero date. Entities put up a boundary wall around the site and mortgage the entire land to banks against loans. The government has to go through a prolonged legal route to take back a mortgaged property," Mollah said.
When it came to power, Trinamool Congress removed township development from the exempted category, halting several real estate projects
Mint, November 20, 2014
Read more at: http://www.livemint.com/Politics/L0avG1zWIGh1KuzZpYMtqM/West-Bengal-amends-Land-Reforms-Act-to-boost-investments.html
Kolkata: West Bengal’s
lawmakers on Wednesday amended the state’s restrictive land laws to
allow development of large housing projects, capping three years of
lobbying by property developers for exemption of real estate projects
from the ceiling on private ownership of land at 24 acres.
After the latest amendment to the West Bengal Land Reforms Act, township development has again been included in the exempted category under section 14Y of the law.
After Trinamool Congress came to power in the summer of 2011, it had removed township development from the exempted category, halting several projects. There is substantial potential for development of townships in West Bengal under public-private partnerships, said Debashis Sen, principal secretary in the urban development department.
Affordable homes can be built for millions through joint sector development if portions of such projects are reserved for people from economically weaker sections of the society, he added. It is “a very exciting and significant decision” in addressing the state’s need for affordable housing, said Harsh Vardhan Patodia, a Kolkata-based developer and vice-president of Credai, a real estate lobby group.
For a township project to be commercially viable, a developer needs to build at least 5,000 residential units spread over 50 acres, he said. Interest in such projects will be determined by demand, so developers may not immediately start building large townships in West Bengal, said Abhijit Das who leads the east India business of realty consultancy Cushman and Wakefield. But it is “a positive signal to the industry at large”, added Das.
The state would need some 2.68 million new homes by 2030, and most of the demand would come from people from the low- and middle-income groups, according to a recent report to the state government by KPMG, a consultancy firm. Alongside the joint sector projects, West Bengal should also formulate policies to allow private development of townships, Sen said, adding that it has potential to create thousands of jobs.
The policy reversal on real estate development may have also been triggered by the state’s immediate need to build small townships on the outskirts of Kolkata, said a government official, who did not want to be identified. West Bengal government is looking to move the district headquarters of South 24 Parganas from Alipore in Kolkata to Baruipur, where land is available with the administration, but development hasn’t started because of the lack of enabling regulatory environment, this person said.
There are similar plans for Kalyani, a town in North 24 Parganas in the outskirts of Kolkata, he added. The state’s lawmakers also decided to grant up to five years (from three years previously) to start projects for which exemptions were granted from the restrictions on private ownership of land.
This is being seen as a recognition of the downturn in the economy in the wake of which the construction several projects across India has been delayed.
Most importantly, it also brings relief to a lot of real estate developers, who had previously acquired land in excess of 24 acres, but because of the earlier revision in laws, were unable to start their projects, said Das of Cushman and Wakefield.
This amendment condones the delay as also enables such developers to launch their projects.
====
Mamata brings back land relief for infrastructure projects
Times of India, Nov 19, 2014
http://timesofindia.indiatimes.com/city/kolkata/Mamata-brings-back-land-relief-for-infrastructure-projects/articleshow/45198901.cms After the latest amendment to the West Bengal Land Reforms Act, township development has again been included in the exempted category under section 14Y of the law.
After Trinamool Congress came to power in the summer of 2011, it had removed township development from the exempted category, halting several projects. There is substantial potential for development of townships in West Bengal under public-private partnerships, said Debashis Sen, principal secretary in the urban development department.
Affordable homes can be built for millions through joint sector development if portions of such projects are reserved for people from economically weaker sections of the society, he added. It is “a very exciting and significant decision” in addressing the state’s need for affordable housing, said Harsh Vardhan Patodia, a Kolkata-based developer and vice-president of Credai, a real estate lobby group.
For a township project to be commercially viable, a developer needs to build at least 5,000 residential units spread over 50 acres, he said. Interest in such projects will be determined by demand, so developers may not immediately start building large townships in West Bengal, said Abhijit Das who leads the east India business of realty consultancy Cushman and Wakefield. But it is “a positive signal to the industry at large”, added Das.
The state would need some 2.68 million new homes by 2030, and most of the demand would come from people from the low- and middle-income groups, according to a recent report to the state government by KPMG, a consultancy firm. Alongside the joint sector projects, West Bengal should also formulate policies to allow private development of townships, Sen said, adding that it has potential to create thousands of jobs.
The policy reversal on real estate development may have also been triggered by the state’s immediate need to build small townships on the outskirts of Kolkata, said a government official, who did not want to be identified. West Bengal government is looking to move the district headquarters of South 24 Parganas from Alipore in Kolkata to Baruipur, where land is available with the administration, but development hasn’t started because of the lack of enabling regulatory environment, this person said.
There are similar plans for Kalyani, a town in North 24 Parganas in the outskirts of Kolkata, he added. The state’s lawmakers also decided to grant up to five years (from three years previously) to start projects for which exemptions were granted from the restrictions on private ownership of land.
This is being seen as a recognition of the downturn in the economy in the wake of which the construction several projects across India has been delayed.
Most importantly, it also brings relief to a lot of real estate developers, who had previously acquired land in excess of 24 acres, but because of the earlier revision in laws, were unable to start their projects, said Das of Cushman and Wakefield.
This amendment condones the delay as also enables such developers to launch their projects.
====
Mamata brings back land relief for infrastructure projects
Times of India, Nov 19, 2014
KOLKATA: In a U-turn of sorts, the maa-mati-manush government is all set to give relaxation on mati, more specifically land ceiling, to make way for townships, logistic hubs, education and medical institutions — a provision it cancelled only two years ago in April 2012 after riding to power on the Singur-Nandigram movement.
A draft Bill — West Bengal Land Reforms (Amendment) Bill — proposes to bring back the relaxation clause under section 14Y given to commercial, civic and infrastructure projects during the Left Front rule.
If things go according to plan, a host of proposals — townships, terminals, logistic hubs, tea gardens, educational and medical institutions, fishery projects, piped transportation of oil and gas, mining and allied activities — are likely to get exemption under the West Bengal Land Reforms Act that debars entities from holding 24 acres in non-irrigated areas and 17 acres in irrigated areas.
According to government sources, business entities already have 12,000 acres of land in possession but are not declaring this because of the land ceiling. The draft Bill allows these entities to hold on to land beyond the land ceiling with permission from the government. To avail this opportunity, they have to declare their land assets and submit project proposals to the government. The government will vest the excess land but allow the entity to use it according to the project proposal once it is approved. The entity has to start work within three years of the approval, failing which the government will take back the land.
Two years ago when Partha Chatterjee was industries minister, the government had argued that setting up townships was not its priority and it would concentrate on affordable housing for low and middle-income groups. The plan didn't work out as the minister said. On the contrary, expansion of urban infrastructure suffered. The government didn't receive any private proposal or FDI to set up mega townships like Rajarhat New Town or the Kolkata West International City in the last two years. The cash-strapped government also couldn't release funds to set up infrastructure on its own.
A rethink started after Amit Mitra took over the industry portfolio. With chief minister Mamata Banerjee desperate to shake off the government's "anti-industry" image, the government gave a push for talks with all stakeholders and strike a golden mean. Some of the realtors urged the government to raise the land ceiling limit under clause 14M, and there was a pressing demand for relaxing the land ceiling for commercial and industrial projects. In fact, the chief minister held a meeting with the Tata companies recently and assured them that land won't be a problem for project expansion. The draft Bill is the first step indicating the government's change of stance from a land-neutral administrator to a facilitator.
Former land and land reforms minister and now an Independent MLA, Abdur Rezzak Mollah, has his doubts though. "It is very easy to say that the government will take back the land if the project doesn't start within three years from the zero date. Entities put up a boundary wall around the site and mortgage the entire land to banks against loans. The government has to go through a prolonged legal route to take back a mortgaged property," Mollah said.
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