Maharashtra Revises Land Acquisition Compensation Formula, Limits 12% Annual Payment Calculation To Base Land Value

Mumbai: The state government has changed the method for calculating the additional 12% annual payment made to landowners during land acquisition, ruling that the amount will now be calculated only on the market value of the land and not after applying the government-prescribed multiplier.

Decision Expected To Impact Major Infrastructure Projects

The Revenue Department issued a Government Resolution on September 10, replacing its earlier instructions of October 28, 2016. The move is expected to have a major impact on compensation calculations, particularly for large infrastructure projects involving extensive land acquisition.

According to officials, the Maharashtra State Road Development Corporation (MSRDC) had sought clarity on the calculation as it undertakes land acquisition for projects such as the Virar-Alibaug corridor and the proposed Shaktipeeth Expressway. The clarification is aimed at bringing uniformity, speeding up acquisition and reducing the scope for disputes and litigation.

The government has held that the 12% payment provided under the 2013 land acquisition law should be calculated on the market value determined under Section 26(1). The earlier practice of applying the factor under Section 26(2) before calculating the additional payment has now been discontinued. The government also considered the Attorney General's opinion while finalising the revised method.

For instance, if the market value is Rs1 crore and a factor of two applies, the 12% payment will now be calculated on Rs1 crore instead of Rs2 crore. Thus, the annual additional payment will be Rs12 lakh instead of Rs24 lakh.

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