Gujarat government revises compensation policy for farmers affected by power transmission projects

The Gujarat Government has announced a significant increase in compensation for farmers whose land is used for electricity transmission infrastructure, including transmission lines and power towers. The revised compensation framework replaces the earlier jantri-based calculation system with compensation linked to twice the prevailing market value of land.

Compensation to be calculated at twice the market value

The decision has been taken under the leadership of Chief Minister Bhupendra Patel and the guidance of Deputy Chief Minister Harsh Sanghavi after extensive consultations with farmers and farmer organisations across the state. Agriculture Minister Jitubhai Vaghani, Energy Minister Rushikesh Patel and Minister of State for Energy Kaushikbhai Vekariya also participated in the discussions before the policy was finalised.

Earlier, compensation for power transmission projects was calculated at 200 per cent of the jantri value of land. However, farmer organisations had consistently argued that jantri rates were substantially lower than actual market prices, resulting in inadequate compensation for affected landowners.

Responding to these concerns, the government has now decided that compensation will be based on twice the prevailing market value determined through an independent and transparent process.

To ensure fair valuation, the government will constitute a Market Rate Committee (MRC). The committee will include the District Collector, representatives of affected farmers, an authorised market valuer nominated by farmers and representatives of the transmission service provider. The inclusion of farmer representatives is aimed at ensuring transparency and protecting farmers’ interests during the valuation process.

Upfront payments and expanded compensation area to benefit farmers

The revised policy also enhances compensation for land occupied by transmission towers. Earlier, compensation was calculated only on the exact tower base area. Under the new policy, the compensable area will include an additional one metre on all four sides of the tower base, thereby increasing the total area eligible for compensation.

For instance, in the case of a 765 kV transmission line, the compensable area has increased from 625 square metres to 729 square metres, resulting in higher compensation for landowners.

In another major relief measure, the Gujarat Government has abolished the earlier staggered payment mechanism. Previously, compensation was released in three instalments—40 per cent during foundation work, another 40 per cent during tower erection and the remaining 20 per cent after the transmission lines were strung.

Under the revised framework, farmers will now receive 100 per cent of the compensation upfront before any project work begins. The government said this step would provide financial certainty and reduce hardship for affected landowners.

The policy also introduces differentiated compensation under the Right of Way (RoW) corridor system. Farmers in rural areas will receive compensation equal to 30 per cent of the market value assessed by the MRC, while those in municipal areas will receive 45 per cent and those in municipal corporation areas will receive 60 per cent.

Importantly, the benefits of the revised policy will also be extended to farmers whose compensation had been determined under the earlier rules but whose projects are still under execution.

The Gujarat Government said the revised framework demonstrates its commitment to ensuring fair, transparent and market-linked compensation while balancing the development of critical power infrastructure with the protection of farmers’ economic interests.