The Mamata Banerjee government has decided to take over the Rs 3,500 crore sand trade in Bengal in a bid to generate more revenue at a time the state administration is facing troubles in arranging funds for its welfare projects.

“We will engage agencies to extract sand from sand mines and stack it at the stackyards. The state mineral development and trading corporation would auction off the sand to the interested buyers,” said H. K. Dwivedi, chief secretary, after the first meeting of the newly constructed state industrial promotion board at Nabanna on Wednesday.

Sources in the government said the policy adopted by the government would be a departure from the ageold practice of auctioning off the sand mines to private investors.

“This will help the state generate an additional revenue of about Rs 2,500 crore annually. As of now, the state government gets about Rs 800 to |Rs 1,000 crore a year by auctioning off 700odd sand mines and through royalty on the sand extracted from the |mines. Now, the state government would entirely control the Rs 3,500 crore trade,” said an official.

The new policy, sources said, would also help the ruling party get rid of infighting over spoils of the sand mines, which are controlled by local Trinamul Congress leaders.

As of now, the state government auction off the sand mines for a period of five years to private investors. The successful bidders got the right to mine sand and sell it on their own by paying a royalty to the government.

But in the new system, the state would not auction off sand mines and it would mine sand by engaging private agencies. The government would sell off the sand through an online auction. “This means, the government would control the entire trade of sand like it does in case of liquors in the state. Earning additional revenues would help the state run the welfare schemes like Lakshmir Bhandar which were launched recently,” said a senior government official.

A section of the officials said that the new system would not come into effect immediately as private investors would continue to operate many of the sand mines till the end of 2022.

“The sand mines were auctioned off for five years and the auction took place 2016 onwards. So, the government would take control of some of the mines this year, but the majority of the mines would come under government control next year,” said a source.

A section of the officials said implementing the new system would not be easy for the government as many of the sand mines are operated by local Trinamul leaders.

“Now, it remains to be seen how the local ruling party leaders will react when the state government would recruit agencies to extract sand on its behalf. If the leaders demand money from the agencies, the state government has to deal with the situation strictly,” said another source.

The chief secretary also said the state had received a good response after it had announced that an ethanol policy would be framed for interested investors.

“We have received 15 proposals worth Rs 2,666 crore investment which could generate 4,000 jobs. We are trying to set up an industrial park exclusively for ethanol,” said Dwivedi.