Maha Cabinet approves hike in interest rate on delayed land acquisition compensation

Mumbai, Aug 11 (IANS) In a move aimed at protecting landowners’ interests, the Maharashtra Cabinet chaired by Chief Minister Devendra Fadnavis on Tuesday decided to upwardly revise the interest rates paid on delayed land acquisition compensation.

Under the new decision, the interest rate payable on delayed compensation will now be pegged at 1 percentage point above the prevailing repo rate — the rate at which the Reserve Bank of India (RBI) lends to commercial banks.

Development and infrastructure projects in the state frequently require early possession of land before the final acquisition award is declared.

Under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, project-affected persons are entitled to interest on delayed payments.

Observing a gap between statutory interest rates and prevailing bank lending rates, the Cabinet approved an amendment to Section 72 of the 2013 Act to align the payout structure with current market dynamics, said the release.

Further, the Cabinet, in a bid to accelerate the rollout of clean energy initiatives, approved a 25 per cent reduction in land transfer fees for properties acquired for renewable energy projects.

The concession will be incorporated into the Maharashtra Renewable Energy and Energy Storage Policy (2025–2036) under the relevant provisions of state tenancy and agricultural land laws.

Currently, transferring land among group companies or subsidiaries for renewable projects requires paying a transfer fee to the District Collector equivalent to 25 per cent of the land’s market value as per the Ready Reckoner Rate.

The Cabinet noted that this fee structure imposed a heavy financial burden and caused project delays. The fee waiver carries a strict clause whereby the land must be used exclusively for renewable energy development. If a company claims the discount under an internal transfer and subsequently diverts or sells the land for non-renewable purposes, the waived amount will be recovered with interest.

Moreover, the Cabinet has granted a complete stamp duty exemption on intra-group land transfers for renewable energy projects.

While parent companies pay standard stamp duty during initial land purchases, subsequent transfers to group entities or Special Purpose Vehicles (SPVs) will now attract zero stamp duty.

The policy aim is to reduce capital costs and fast-track project commissioning under the Maharashtra Renewable Energy and Energy Storage Policy (2025–2036).

In addition, the Cabinet approved the creation of four senior administrative posts within the Agriculture Commissionerate to strengthen digital governance and engineering oversight.

Following directives from the Union Ministry of Agriculture, the state is establishing a dedicated Directorate of Agricultural Engineering and a Directorate of AgriStack.

To head these units, the High-Power Secretary Committee recommended creating four positions comprising Director of Agriculture, Additional Director of Agriculture, Joint Director (Statistics) and Joint Director (Information Technology).

The Cabinet also approved a proposal allowing the Sri Nilkantheswar Farmers Co-operative Sugar Factory in Killari (Ausa taluka, Latur district) to secure an Rs 18.09 crore loan from the National Cooperative Development Corporation (NCDC).

The factory had submitted a request to the Sugar Commissionerate in Pune for capital expenditure and working capital support.

The Cabinet cleared the Rs 18.09 crore proposal for submission to the NCDC as a one-time special dispensation, clarifying that this decision will not serve as a precedent for other mills.

–IANS

sj/rad