West Bengal government is set to amend the land reforms act

To unlock government land parcels for commercial and industrial use, the Bengal government might modify the provisions of a 68-year-old law, the West Bengal Land Reforms Act 1955.

It is likely to introduce a bill in the state assembly in the budget session. Since the land for commercial use has already been available for a 99-year lease, this bill is intended to generate income for the state exchequer.

The state cabinet approved it on January 11, and as per the report, the bill will be introduced in the assembly to make this decision official.

According to a minister, the state government will introduce an amendment to the assembly that will allow land parcels to be offered to commercial buildings for lifetime possession rather than the previous standard of a 99 year lease. Therefore, many industries would prefer to purchase land plots rather than leaseholds, and as a result, the state exchequer is anticipated to benefit. 

However, this shift from leasehold to freehold represents a significant policy change for the Trinamool government, as it was decided in 2012 that businesses would be provided with land plots on a 99-year lease. However, the proposed bill will now allow the industry access to public land. According to officials, numerous land parcels in Kolkata will also be made available to industries. Thus, all land will be available for freehold, with the exception of khas land, which is used for private farming, and bargadari land. Following the cabinet decision on January 11, the move had been well-received by the industry and had made land available from leasehold to freehold rights, as per the reports. 

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 need to change and add new provisions to the 1955 Act, which deals with the amount of money to be paid for the land. Up until 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 an additional 10% of the land price has to be paid to get freehold rights. 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 land freehold to Infosys on the condition that the company would use 51% of the pot for IT and ITeS services. 

In September 2022, the Housing Infrastructure Development Corporation (HIDCO) invited applications for the 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 show interest in 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 that there was a huge response from the investors while HIDCO fixed the start bid price at Rs 177.3 crore during the e-bidding of the HIDCO plot in September. 

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