West Bengal Plans to Resume Township Construction
West Bengal is set to permit real estate builders to resume construction of townships, which had been stalled for the past six months. Previously, the West Bengal government had barred builders from constructing townships in the state.
Amendment of Section 14Y
Townships were excluded from the list of permissible projects with an Amendment of Section 14Y. The exemption might only be granted to private entities owning more than 24 acres in rural areas. However, the government is now reconsidering the resumption of large-scale real estate projects such as townships.
14Y Clearance for Real Estate Projects
The state might grant the so-called 14Y clearance or exemption to real estate projects. Land ceiling restrictions will be exempted if more than half of the project is dedicated to commercial real estate. Under the proposed policy, 51% of the project must be reserved for commercial purposes, with the remainder utilized for residential purposes.
Government Aims and Policies
Debashis Sen, Principal Secretary of West Bengal’s urban development department, revealed that the government aims to encourage the development of integrated real estate projects that lead to long-term employment. The upcoming housing policy may require builders to sell homes to workers in nearby commercial blocks of a project.
CREDAI’s Views
Sushil Mohta, Vice-President of the Confederation of Real Estate Developers’ Association of India (CREDAI), West Bengal unit, stated that the state government consulted with developers on this issue. He believes the new policy was framed in consultation with CREDAI members.
Mohta expressed that this model is suitable for distant suburbs of Kolkata and other smaller towns where larger tracts of land are available at a lower cost. He noted that the policy might not be relevant in larger cities like Kolkata and Rajarhat due to the scarcity of large land tracts for such integrated projects.
Land Ceiling Laws and Developers’ Suggestions
Residential real estate builders have been advocating for the abolition of urban land ceiling laws for years. Under these laws, ownership of vacant land in urban agglomeration areas is capped at 500 sq. m. West Bengal Chief Minister Mamata Banerjee opposes the repeal of these laws.
CREDAI’s Mohta stated that the government did not agree to the developers’ suggestion to allocate 20% of the space for commercial sectors in large real estate projects. However, the state government agreed to consider office spaces and shopping malls as non-residential units.
The developers’ proposal to reserve 20% of the space in large housing projects for affordable homes was not approved by the West Bengal government. Mohta hopes the government will accommodate this suggestion in the proposed housing policy.
Government Investigation
State government officials, who chose to remain anonymous, noted that the reservation of homes for backward economy buyers has never been considered during the 34-year rule of the Left Front Government until last year. The government has initiated an investigation to uncover irregularities in joint-sector real estate housing firms. They speculated that the government, led by the Trinamool Congress, might yield to the same.