Calcutta, Sept. 8: The Bengal cabinet today cleared the conversion of a 50-acre plot leased to Infosys in Rajarhat into a freehold, with the condition that the company must use at least 51 per cent of the land for IT and ITeS purposes.

Sources said this was the first such relaxation offered by the Mamata Banerjee government in its efforts to woo investments, and was a "compensation" of sorts to Infosys for the denial of its request for special economic zone (SEZ) status.

A source said the company would now become the owner of the plot, whose market price would have risen sharply over the past few years, and could sell off 49 per cent of the land or lease it to a third party if it wanted.

"Infosys had requested us to convert the land into a freehold one as the state government could not grant the special economic zone status. The cabinet approved the proposal today as we want the company to start its operations in the state," state education minister Partha Chatterjee said after the cabinet meeting at Nabanna.

Senior officials said that technically, the company would need the government's approval to sell off or rent out 49 per cent of the plot, but it was a "mere formality".

"The government has decided to approve any plan the company prepares for 49 per cent of the plot," an official said.

A businessman said it was a "bold" move by the state government to signal to industry its seriousness about attracting investments.

Mamata had announced last week that Infosys had agreed to invest Rs 100 crore in Bengal despite the denial of SEZ status.

"An SEZ status would have offered income-tax and other exemptions to the company. By making the plot a freehold, the government is trying to compensate Infosys for the loss in income because of non-availability of the SEZ status. That apparently broke the ice," a government official said.

The Bengal government had in November 2011 leased the 50-acre plot to the company for 99 years at Rs 75 crore. Land department sources said the latest deal was a lucrative one for Infosys because land prices had shot through the roof in Rajarhat over the past few years.

"Infosys will now own the plot, for which it had paid Rs 1.5 crore per acre. The market price for land in the area would be around Rs 16-20 crore an acre now. Anybody would be interested in investing Rs 100 crore if given such a huge benefit," a senior land department official said.

Sources in Nabanna said the proposal placed before the cabinet had suggested the company would initially invest Rs 100 crore, which would generate 1,000 job opportunities.

"In future, the company plans to develop 2 lakh square feet of workspace on the plot, which would allow the creation of 2,000 direct employment opportunities," a source who attended today's meeting said.

The state government has decided to erect a boundary wall around the plot, whose cost is yet to be ascertained, sources said.