Mittal described the scrapping of the Rajarhat project and land allotment to the two companies as a 'temporary setback' to the state's IT industry.

'It is an aberration. But it is good that the unfortunate thing has happened at a time when the IT industry is going through a slowdown.'

He hoped things will normalise in six to eight months. 'There is need for trust and confidence in the minds of the industry. The centre and the state should be able to come up with a solution.'

'It will be really sad if after all the efforts of the state government to create an industry-friendly environment we have to look for land elsewhere,' he said.

Asked whether the government should acquire land or let the companies do it, Mittal said: 'That's a decision the government should take. I think it's the responsibility of the government to do this. The government knows which is agricultural land and which is not,' he added.

The proposed IT township at Rajarhat near Salt Lake had become controversial in recent weeks following allegations that land sharks - allegedly backed by promoters of Vedic Realty - had been involved in acquisition of land there.

The state government depended on Vedic Realty, which set up a joint venture (Akash Nirman) with Webel, the state's key IT agency, to get land for the 1,600-acre IT project.

Both Infosys and Wipro had sought 90 acres from the state government for their ventures. Even ITC Infotech was eyeing for a space in the IT hub.