Bengal FM says urban land ceiling law ‘has to go’, invites big realty investment

West Bengal Finance Minister Swapan Dasgupta on Friday made a strong pitch for removing the Urban Land (Ceiling and Regulation) Act, 1976, saying the decades-old legislation “has to go” as the state seeks to unlock land, attract large developers and accelerate organised real estate development.

Addressing the real estate industry at CREDAI NATCON 2026 in Kolkata, Dasgupta said Bengal continued to operate under laws dating back to the 1970s that had become impediments to contemporary development. His remarks signalled a stronger position on the urban land ceiling framework than the state’s earlier commitment to examine the legislation.

‘It has to go’

“One of them is something called Urban Land (Ceiling and Regulation) Act 1976. It is an impediment and deterrent to development. It has to go,” Dasgupta told the gathering.

The law was originally enacted to prevent the concentration of urban land in a few hands, curb speculation and profiteering, and provide for the acquisition of vacant land exceeding prescribed limits. While Parliament passed legislation repealing the central law in 1999, the repeal required adoption by individual states in which the original Act applied under the constitutional mechanism through which it had been enacted.

West Bengal did not adopt the repeal and the urban land ceiling framework has consequently continued to operate in the state. The government still maintains a system of clearances, exemptions and other proceedings under the legislation.

For developers, the restrictions have long been viewed as an obstacle to assembling large contiguous parcels required for major housing, commercial, township and mixed-use projects. Industry bodies have repeatedly sought relaxation or repeal of the framework.

From review to reform

The latest statement marks a significant shift in the language being used by the state government on the issue. Bengal had previously indicated that the applicability of the Urban Land Ceiling Act would be revisited and examined as part of efforts to remove constraints on investment and development.

Dasgupta’s assertion that the legislation “has to go” suggests that the government is now looking at more substantial reform. Any eventual change, however, would have to pass through the required legislative and administrative processes before the existing framework ceases to operate.

The state has already taken steps to ease some constraints. In 2025, the government clarified exemptions from ceiling provisions for certain private acquisitions of land from the state government, government agencies and urban local bodies under their land-allotment policies.

Big opportunity in Kolkata

Dasgupta linked land reform with a wider attempt to modernise Kolkata and attract organised investment into its ageing urban landscape. He said the quality of old housing required substantial improvement and upgrading, presenting a sizeable opportunity for developers willing to undertake redevelopment.

The minister argued that Kolkata had not witnessed the level of organised real estate development seen in several other major Indian cities over the past 15 years or longer, particularly in middle-class housing. The city’s stock of older residential buildings and underdeveloped parcels, he indicated, could become an important part of the next phase of growth.

The government wants established developers capable of undertaking large projects rather than fragmented and uncoordinated construction. Dasgupta invited major real estate companies to consider Bengal for mega projects and said the state would seek to create conditions in which they could operate responsibly.

Call to big developers

The minister told developers that Bengal needed their capital, technology and ability to execute projects at scale. He said businesses should be able to earn returns from their investments while also contributing to society and the broader development of the state.

His pitch comes as Bengal seeks to attract investment not only into residential and commercial property but also manufacturing, logistics, technology and associated infrastructure. Large projects in these sectors often require sizeable contiguous land parcels, making land-use rules an important part of the investment environment.

CREDAI Kolkata has also been pressing for changes to the land ceiling regime. The industry body has argued that easing restrictions could facilitate larger housing projects, integrated townships, industrial hubs and IT parks while attracting long-term domestic and foreign capital.

Bringing investment back

Dasgupta also placed the proposed reforms within a broader economic argument about Kolkata’s position among India’s major cities. He said the city needed to move beyond being remembered largely through its historical and cultural legacy and again establish itself as a destination for jobs, entrepreneurship and investment.

Creating opportunities that could persuade younger people to build their careers in Kolkata would require a combination of private investment, modern infrastructure, industrial expansion and a more responsive regulatory environment, he said.

The real estate sector, in that framework, is being positioned as part of a wider urban and economic renewal rather than merely a housing industry. With the government signalling willingness to reconsider longstanding land restrictions, the focus will now be on how quickly its stated intent is translated into legislation — and how far the eventual reforms go in dismantling one of Bengal’s most enduring constraints on large-scale urban development.