Gujarat Links Power-Line Payouts to Market Value After Protests

A Market Rate Committee will determine land values. The committee includes the district collector, representatives of affected farmers, authorised valuers nominated by landowners, and representatives of the transmission company. It will set the market value for the land itself and, separately, for the right-of-way corridor under the transmission lines. For corridor land, compensation will be 30% of the market value in rural areas, 45% in municipal areas and 60% in metropolitan areas – again replacing the earlier Jantri-linked formula.

For transmission developers, the policy means a meaningful cost increase. Land acquisition already accounts for a significant share of project capital expenditure. Higher per-unit compensation, a larger compensable footprint, and upfront payment all raise the cash requirement before construction begins. That may squeeze smaller developers and make underground cabling or existing corridor rights-of-way more attractive alternatives.

The policy applies retroactively to projects still under execution. If compensation was assessed under the old rules but construction has not finished, eligible landowners can claim the enhanced payout. That creates a retroactive cost liability for developers on partially completed projects, a risk that may not have been priced into original budgets.

Gujarat has long been a test bed for the central government's Green Energy Corridor and interstate transmission system expansions. Linking compensation to market value here could set a precedent for other states facing similar land-acquisition protests. For developers building transmission lines across multiple states, a patchwork of compensation regimes – some Jantri-based, some market-linked – complicates budgeting and project timelines. The Gujarat shift makes state-by-state land policy due diligence more critical before committing capital.

For farmers, the change addresses the core grievance: compensation that did not reflect the real cost of losing productive agricultural land to tower infrastructure. Whether the Market Rate Committee delivers transparent valuations remains to be tested. The mechanism removes the most glaring disconnect – the gap between the notional Jantri rate and what a willing buyer would actually pay.

The Gujarat government said the revised policy takes immediate effect. Transmission companies operating in the state will need to rework their acquisition budgets for pending projects and factor in higher land costs for new ones.