Ranchi/Jamshedpur, April 30: Villagers of Tontoposi have set the cat among the pigeons.

A day after laying down the market price of land for Tata Steel’s greenfield project at a whopping Rs 40 lakh an acre, they have forced industry to press panic buttons.

“Tata Steel can possibly afford to pay such an exorbitant demand but even if the price is halved, it would be beyond the reach of most of the smaller industrial undertakings. Moreover, it will set a bad precedent,” said a disturbed representative of another steel company seeking to make investment in the state.

Since Tatas are looking for 10,000 acres of land, it would mean they would have to cough up almost the entire project cost of Rs 50,000 crore on land alone, said spokesmen of trade bodies, who felt the demand is unrealistic.

Industry secretary Santosh Kumar Satpathy said in Ranchi that the state government has decided to set up a panel to decide the market price of the land that would be acquired for industries. The decision taken by the panel, he said, would be binding on the investor, who will have to pay the price recommended for acquiring the land.

The panel, he added, would comprise the respective deputy commissioner, representatives of the investors and elder citizens from the local community.

A section of prospective investors warned that any unreasonable demand would force companies to rethink on their entire investment strategy in the state. “If villagers are indeed demanding such astronomical sum, then it simply means that they are not interested in parting with their land,” said a company representative scouting for land in West Singhbhum.

Acknowledging that determining the market price of land is a “tricky” issue, government officials pointed out that even the government’s own nodal agency for acquiring land for industries, Jharkhand Infrastructure Development Corporation, is facing problems in acquiring land.

Industry sources in Jamshedpur too reacted sharply to the “unrealistic and unreasonable” demand made at Gamharia yesterday. Rs 40 lakh an acre is almost 10 times higher than the recommended government rate that ranges between Rs 3.5 and Rs 7 lakh an acre, they claimed. Tata Steel executives, they felt, should have turned down the demand on the spot.

Singhbhum Chamber of Commerce and Industry general secretary Suresh Sonthalia said: “According to my knowledge the price should not have been higher than Rs 5 lakh per acre.”

An official of Adityapur Industrial Area Development Authority, which also acquires land for industries on behalf of the government, also appeared upset. “If Tata Steel agrees to pay even half the price demanded , then it will start creating problems for us in the future,” he added.