The Maharashtra cabinet has approved a proposal to provide additional interest to landowners when compensation for land acquired for government projects is delayed.
Under the decision, affected landowners will receive interest at a rate 1 percentage point higher than the rate at which the Reserve Bank of India (RBI) lends to commercial banks. The move involves an amendment to Section 72 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (LARR) Act, 2013.
Officials said the decision addresses situations where the government takes possession of land before the final compensation award is determined, particularly when projects are considered urgent. In such cases, landowners may have to wait for the compensation to be formally assessed and paid.
“Since there is a difference between this interest rate and the prevailing interest rate on bank loans, the state cabinet approved an amendment to Section 72 of the LARR Act, 2013. Accordingly, interest will now be paid at a rate 1% higher than the rate at which the RBI lends to commercial banks,” the official said.
According to officials, delays in compensation payments can occur due to administrative procedures, coordination issues between revenue authorities and other government departments, as well as delays in releasing funds for land acquisition.
The decision comes as Maharashtra undertakes land acquisition for several major infrastructure and industrial projects. The state is currently acquiring land for Mumbai 3.0, a proposed 323.44-sq-km development spread across 124 villages in Uran, Panvel and Pen tehsils.
The government is also working on acquiring nearly 15,000 hectares for the Eastern Vidarbha Industrial Corridor. Land acquisition is also underway for projects including the Vasai-Virar multimodal corridor, Vadhvan Port and Shaktipeeth Expressway.
The higher interest provision is expected to provide greater financial protection to landowners who face delays in receiving compensation after surrendering their land for public projects.
Source: The Times of India
