August 22, 2025: The state government has issued a fresh circular aimed at simplifying and clarifying the procedure for converting Occupant Class-2 and leased government land into Occupant Class-1, or freehold land. In an effort to bring greater accountability and transparency, the circular directs district collectors to process complete conversion applications within three months of receipt.
Applicants who are served with a surcharge demand notice will also be required to make payment within three months. Failure to comply could see the land revert to its earlier Class-2, or leasehold, status. Ramesh Prabhu, chairman of the Maharashtra Societies Welfare Association (MahaSewa), welcomed the development, noting that the timeline would give applicants much-needed clarity and reduce uncertainty in the system.
The circular sets out special provisions for cooperative housing societies pursuing self-redevelopment. These societies must reserve 25% of the additional floor space index (FSI) availed during redevelopment for beneficiaries under the Pradhan Mantri Awas Yojana (PMAY). Non-compliance will result in the forfeiture of the 5% surcharge relief, and any premium already paid will be absorbed by the government, with the land reverting to Class-2 status.
Further, redevelopment projects must be initiated within two years of availing the scheme’s benefits. While a one-time extension of two years may be granted, societies risk losing eligibility if work does not commence within the stipulated timeframe.
For cases where the conversion premium exceeds Rs 1 crore, the circular bars district collectors from making unilateral decisions. Instead, state government approval will be mandatory, with such applications required to be forwarded within three months.
The government has reiterated that forest land, or land officially recorded as forest, will remain excluded from conversion provisions due to incomplete revenue records and legal constraints.
Source: The Free Press Journal
