Land bill changes to hurt Bengal industrialisation

The proposed modification of the Land Acquisition (Amendment) Bill is likely to throw the industrialisation drive in West Bengal out of gear, if state governments are given the power to determine the extent of their roles in acquiring land for industries.

The stated position of the Trinamool Congress-led West Bengal government is that no land should be acquired for private projects, but in a competitive scenario, it is West Bengal that is likely to lose out in the long term if the state government decides to opt against facilitating land acquisition.

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"We will definitely require government help for land acquisition," Bhushan Steel Managing Director Neeraj Singal said.

Bhushan Steel, incidentally, will be setting up a six-million-tonne steel plant at a cost of Rs. 30,000 crore (Rs. 300 billion), for which the land requirement is 2,500 acres.

Notifications for land acquisition had been issued by the erstwhile government, but it is still not clear whether the new government will go ahead with land acquisition for such projects.

"We want to set up the project in Bengal, but if we don't get land then we will not," Singal said.

He has already waited long.

The memorandum for the project was signed in 2007, right after the Nandigram fiasco.

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Moreover, the Karnataka government is in the process of acquiring land for Bhushan Steel.

For the Trinamool Congress, land, which resurrected the party, is an all-important issue.

"It is Chief Minister Mamata Banerjee's position that private companies should directly purchase land from the farmers," a senior Trinamool Congress leader said.

West Bengal, where fallow land is just about one per cent, has faced resistance in both the models: Acquisition by the state (in the case of Singur and Nandigram) and direct purchase by companies or the state.

"I think if the Bill has a provision for the state to play a role, it's a good thing. The state will take care of rehabilitation of project-affected people," the state's previous commerce and industry minister, Nirupam Sen, said.

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Sen had tried his hand in purchasing directly from land owners, but in many instances it has not worked.

The West Bengal Industrial Development Corporation managed to acquire only about 260 acres for Tata Metaliks against a requirement of 350 acres in Kharagpur, where land was mostly barren.

"The requirement was scaled down from 500 acres to 350 acres, but even that didn't happen within a reasonable timeframe," Tata Metaliks Managing Director Harsh Jha recalled.

The project ultimately moved to Karnataka.

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"If the land requirement is small like 40-50 hectares, then it is possible for an individual buyer to do the project within a reasonable timeframe and cost. But for much larger projects, unless government-owned, in Bengal where land parcels are small, larger projects may not happen," said Jha.

The average landholding in West Bengal happens to be one of the lowest, much lower than the national average of 1.41 hectares.

During 2005-2009, West Bengal received investment proposals of Rs. 2.37 lakh crore, of which only about 10 per cent has been implemented. The balance will now have to be executed.