- The Urban Land Ceiling Act remains active in West Bengal despite the central government's repeal in 1999
- The law limits private urban land holdings, hindering large-scale development in Bengal cities
- Industry bodies have demanded the withdrawal of the law
A law introduced in the 1970s may soon be scrapped, opening up massive development opportunities in West Bengal. The Urban Land Ceiling Act of 1976 was scrapped by the central government in 1999, but it exists in the state.
The law is seen as a major impediment to development in the state.
The law targets the concentration of urban land by capping private holdings in designated urban 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 Unlike most states that repealed the Act, West Bengal maintains it to ensure equitable distribution.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 Act.
Both the Left Front and Trinamool Congress, which cumulatively ruled the state for 50 years, had refused to roll back the law, but the newly elected BJP government may finally look at scrapping the legislation, making more land readily available for development.
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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 bodies 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, Bhattacharya hinted at the big change which will completely overhaul the land acquisition scenario in the state.
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.
He said the government will bring a new land policy.
"There are no land hurdles. We will bring in our new land policy. The model 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.
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Industry Body Welcomes The Remarks
"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 had scrapped it. But even after so many years, this has continued in Bengal. 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, Chairman-Merlin Group and President-CREDAI West Bengal, told NDTV.
"Today, land is no longer an asset to be held, but rather it is a raw material for development. By scrapping this act, large-scale 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 Law
States that have repealed the Urban Land (Ceiling and Regulation) Act, 1976, have unlocked significant potential in real estate development, including Haryana, Punjab, Uttar Pradesh, Gujarat, Karnataka, Madhya Pradesh, and Rajasthan.
Calls for the repeal are growing louder.
Speaking at the NSE recently, Sanjeev Sanyal, Member of the Economic Advisory Council to the Prime Minister (EAC-PM), 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 a 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...Now that the political configurations in Eastern India have suddenly shifted very dramatically, we can 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 time. 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, but it is also a critical part of getting the eastern half of India to fire again."
