The Hindu Business Line : Increasing land costs pose hurdle to cos planning to set up offices in Bengal

The challenges
The impact of the global financial crisis on the Indian banking system has also affected sectors such as real estate, manufacturing and information technology.
Construction firms also need to adopt more low-cost technologies in order to cater to the low-income group and middle-income groups, he pointed out.

Our Bureau

Kolkata, Nov. 3 Increasing land prices in West Bengal urban areas is causing problems to companies that are planning to set up offices in the State, the Chief Minister of West Bengal, Mr Buddhadeb Bhattacharjee, said here on Monday.

While a number of industrialists like L.N. Mittal, the Jindals and companies such as Airtel and ICICI have expressed a desire to set up central offices in the Rajarhat area, the mounting cost of land is causing a problem for such ventures, the Chief Minister said.

Addressing the World Congress on Housing Science Mr Bhattacharjeesaid, “Land at Rajarhat is now priced at nearly Rs 7 crore an acre. Urban land prices are moving up every day causing a problem for companies planning to set up offices here.”

The impact of the global financial crisis on the Indian banking system has also affected sectors such as real estate, manufacturing and information technology, he said, adding that the challenge now is also to find out ways to mobilise banking finance to these sectors.

Construction firms also need to adopt more low-cost technologies in order to cater to the low-income group and middle-income groups, he pointed out.

The State is also focusing on development of satellite townships following the public-private-partnership model in places such as Baruipur, Dankuni in Hooghli and Domjur in Howrah, he said. “The Government alone cannot provide housing to all. Private companies like Shapoorji Palonji and DLF are coming forward to join hands with the state to achieve that goal,” he said.

Mr Somnath Chatterjee, Speaker of Lok Sabha said, “Availability of credit is a problem now to the real estate sector at a time of global meltdown.”

Loans at reasonable interest rates and flexible repayment options are needed to boost the sector, he added.

Mr Harshavardhan Neotia, Managing Director, Ambuja Realty, said though sales were down in the Kolkata market, prices and rents may fall marginally only in pockets of over-supply such as Rajarhat as overall demand in the city is stable.

While most of Ambuja’s projects including the City Centre-2 were on track, new projects like the Rs 150- crore proposed IT complex in Rajarhat may be delayed by six months, he said.

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