Govt land transfer code set up to pare disputes, boost monetisation
The framework mandates separate valuation of buildings and clear rules for public and commercial use to increase transparency, prevent undervaluation and free up revenue for public projects. Land transfers to private players and states will require cabinet approval.
“One clear difference is that transfers for public purposes are usually priced at guide rates, while commercial transactions follow market rates, reducing many disputes,” a senior official told ET.
This will help achieve the target of generating ₹ 16.72 lakh crore from government land and other asset sales under the National Monetization Pipeline 2.0 (NMP 2.0) in five years from FY 2026 to FY 2030, the official added.
The official explained that so far “the rules on land transfers are not standard, often lead to disputes and are one of the obstacles to monetizing land assets, buildings and other areas.”
According to the framework, valuation of land and structures will be primarily carried out by the National Land Management Committee (NLMC), which can charge fees for its services. Buildings or superstructures on the land will be valued by deducting depreciation from the current renovation cost.
In case of competing demands
Under the new framework, under which two ministries seek the same land assets, the spending minister can hold inter-ministerial consultations to assess competing claims, alternative uses and opportunity costs before approval.
Earlier this week, the expenditure department under the finance ministry published two office memorandums amending clauses on land transfer rules in the 2017 General Finance Rules to facilitate the new framework.
It also issued separate guidelines combining all previous instructions when defining procedures, valuation methods and competent authorities for land transfers and disputes.
In case of land transfers by central public sector enterprises (CPSEs), the public enterprises department will also issue a formal policy, the official said.
The framework defined nominal values for sales and leases, distinguished transfers for public purposes from commercial ones, and noted that all proposals for land use should be supported by concrete plans or projects with clear timelines.
The new framework will not cover situations where allocation orders were made before 31 March 2026.
