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Mamata effect: West Bengal industry caught in a cleft stick

Last updated on: August 31, 2009 09:42 IST

Mamata BanerjeeMamata Banerjee's opposition to government intervention in land acquisition may have helped her score political brownie points, but it has left industry in West Bengal with a Hobson's choice: Abandon projects or appoint hundreds of land brokers who can run amok.

Consider last week's incident involving Vedic Village, a local spa and resort, where locals turned their ire on one of the land brokers, leading to the death of one person and substantial damage to property.

Vedic Realty, which runs Vedic Village Spa Resort, was developing a 1,500-acre information technology township, which would also house Infosys and Wipro, as part of a deal with the state government. For land acquisition, Vedic Realty had to appoint 'hundreds of brokers', which led to a lot of unpleasantness with the locals.

If industry has to acquire land directly, it has little option but to appoint brokers in a state like Bengal, where the average landholding is less than an acre due to the land reforms or redistribution programme of the state government in the late 1970s.

According to Bhushan Steel managing director Neeraj Singal, it is impossible to deal with the thousands of farmers without government intervention. Bhushan Steel, which is setting up a steel plant in the state, requires 2,500 acres, and direct purchase would mean some brokers getting into the picture.

That puts industry in a Catch-22 situation. The state government has decided not to acquire land for projects where notifications for land acquisition have not been issued, which means industry has to depend on brokers over whom it has little or no control.

In an industrial town like Haldia, which has seen a shift of power with former Haldia Development Authority chairman Lakshman Seth losing the elections to Trinamool Congress leader Shubhendu Adhikary, land brokers are making hay.

A Kolkata-based industrialist says brokers are demanding Rs 25 lakh (Rs 2.5 million) an acre, while the market price is Rs 800,000 an acre. HDA is involved in development and promotion of Haldia as an industrial township.

Says West Bengal Commerce and Industry Minister Nirupam Sen, a strong proponent of government intervention in land acquisition: "Acquisition of land by the government is the most transparent method and protects the poorest of the poor as far as possible. Those who are the most vocal in their opposition against this method are the brokers, and not the farmers, because their business is at stake."

He points out that in a democracy, a farmer could demand his rights and the government is bound to respond. "The government not only compensates the people fairly, but also rehabilitates and resettles them. Private developers do not, in most cases."

JSW Steel vice chairman and managing director Sajjan Jindal, however, believes in dealing directly with land owners. JSW's direct purchase of 10 per cent of the total project area of 5,000 acres in West Bengal for a 10 million tonne steel project was smooth.

The rest was vested with the government. But even Jindal concedes that government intervention would be necessary as 10-15 per cent of crucial land could be held up due to vested interests.

"We have not faced any problem so far in direct purchase, but for our future projects, government intervention may be required for some part of the land."

He welcomes the Land Acquisition Bill, which was put off by the United Progressive Alliance government after Banerjee wanted her suggestions incorporated. One of the clauses in the Bill states that the government should not play a role in acquiring land for private projects, one of the main contentions of Banerjee, the Union railway minister.

However, West Bengal is acquiring land under the Land Acquisition Act 1894 for the Indian Railways, some of which is double-crop and multi-crop. As Bhushan Steel's Singal points out, "Even the Railways cannot acquire land without the state government's intervention."

Ishita Ayan Dutt in Kolkata