Punjab Cabinet on Monday approved a new Land Pooling Policy, pitched by the government as a transformative step toward planned urban development and farmer empowerment. The policy, approved during a Cabinet meeting chaired by Chief Minister Bhagwant Mann at his official residence, seeks to revolutionize land utilization in the state’s urban expansion while addressing the exploitation of farmers by private developers and land mafias.
As per the policy, which will be rolled out initially in 27 major cities across Punjab, farmers can voluntarily contribute their land for development projects. In return, the government will provide them with a portion of the land fully developed with all necessary infrastructure such as roads, sewage systems, water and electricity connections, parks, and street lighting. For every one acre of land pooled, the farmer will receive a 1,000-square-yard residential plot and a 200-square-yard commercial plot, potentially worth up to four times the collector rate of the original land.
One of the most emphasized features of the policy is its voluntary nature. The government has categorically stated that no land will be taken without the farmer’s written consent in the form of a No Objection Certificate (NOC). Development will not begin unless the NOC is submitted. Moreover, until the farmer receives possession of the developed plots, the state will pay them an interim compensation of Rs 30,000 per acre annually for up to three years.
Renewable Energy and Housing Minister Aman Arora, who briefed the media after the Cabinet meeting, said that the policy would shield farmers from the longstanding menace of land mafias and speculative private builders. “Private developers used to acquire agricultural land at throwaway prices, and resell it at exorbitant rates after minor development. Our land pooling policy will put an end to this exploitation by ensuring that farmers themselves become stakeholders in development,” said Arora.
In cases where landowners contribute larger parcels — such as nine acres, the Government will return one-third (three acres) of the total land in developed form. Furthermore, landowners or groups owning 50 acres or more have the option to undertake development themselves. In such cases, 60 percent of the pooled land will be returned to them, with stipulated allocations for residential (20 percent), commercial (five percent), and public infrastructure, including roads and parks.
Despite its ambitious framework and potential benefits, the policy has triggered a flurry of criticism. Opposition parties, including the Shiromani Akali Dal (SAD) and Congress, have slammed the move, calling it a “land grab in disguise” and questioning the timing of the decision when farmers' trust in the government is already at an all-time low.
Farmer organizations, too, have raised red flags. While some welcomed the promise of higher returns, others feared that the policy could lead to indirect coercion and the eventual loss of agricultural land. “On paper, it’s voluntary. But how do we know there won’t be pressure tactics or manipulation through intermediaries?” asked a leader of one of the state’s major farmer unions.
Environmentalists have also expressed concern over the ecological impact of converting vast tracts of farmland into urban infrastructure, especially when Punjab is already grappling with groundwater depletion and urban congestion.
Nevertheless, the Mann government insists the policy is a win-win — promoting sustainable urban growth without alienating farmers. “This is the first time in Punjab that farmers have been offered such a structured, profitable and transparent model of land partnership with the government. It’s entirely their decision to join, and we are ensuring complete transparency,” said Arora.
The policy also includes a mechanism for aggregation of fragmented land parcels. If a farmer owns land at multiple locations, efforts will be made to return the developed plots at a single, consolidated site to ensure usability and better economic value.
Other Cabinet Decisions
Conditional Surrender and Cancellation of Licenses under PAPRA approved
In a significant regulatory move, the Cabinet has given its nod to the conditional partial surrender and cancellation of licenses granted under the Punjab Apartment and Property Regulation Act (PAPRA), 1995. The decision also covers partial revocation of approvals issued for industrial park projects across the state. This follows the state government’s policy notification dated March 10, 2025, which provides a structured framework for surrendering licensed areas of approved colonies and industrial parks, subject to stringent compliance with specified conditions. The move is expected to bring clarity to developers facing challenges in completing large-scale projects while also enabling better land-use management and legal oversight.
Lump Sum Incentives for Plot Allottees to Encourage Timely Payments
To improve financial discipline and reduce payment defaults, the Cabinet approved attractive incentives for allottees and bidders of residential, commercial, and other plots who opt for upfront payments. Under the new provision, any allottee paying 75 percent of the total plot cost in a single lump sum will receive a 15 percent discount on the total cost. This measure aims to ensure robust revenue collection for the state while providing financial relief and added value to genuine buyers. It is also expected to curb delayed payments and encourage faster project execution.
Greenlights Hike in Development and Land Use Charges
Aiming at aligning infrastructure contributions with rising development demands, the Cabinet has also cleared an upward revision in External Development Charges (EDC), Change of Land Use (CLU) charges, license fees (LF), and other related levies imposed on real estate developers and mega project promoters. This is the first significant hike since the last rate notification issued on May 6, 2016. Though an annual 10 percent escalation was originally mandated from April 1 each year, successive governments had waived these increases. The revised rates — effective retrospectively from April 1, 2020 — represent a cumulative hike of approximately 77 percent. Going forward, the Cabinet has approved an automatic 10 percent annual compounded increase in EDC, CLU, and license fees starting April 1, 2026.