Gujarat Chief Minister Bhupendra Patel announced on Friday, 3 July 2026 that the state government will now compensate farmers at twice the prevailing market rate for land used to erect electricity poles and transmission towers — replacing the earlier practice of paying at Jantri (circle) rates. The decision, shared by the Chief Minister on X, also shifts compensation from a three-instalment model to a single 100% upfront payment.

Context

In his post, CM Patel explained the rationale in Gujarati: 'ખેડૂતોની જમીનની વાસ્તવિક બજાર કિંમત તટસ્થ અને પારદર્શક રીતે નક્કી થઈ શકે' — ('so that the actual market value of farmers' land can be determined in a neutral and transparent manner'). He noted that farmers had long felt the compensation offered for poles erected on their fields was inadequate, and that the government held consultations with them before arriving at this decision.

The Chief Minister described farmers as 'અન્નદાતા' ('providers of food') and called them the 'foundation pillar of a developed Gujarat', pledging that the government 'was, is, and will always stand beside them.'

Policy Backdrop

Until now, compensation for power transmission infrastructure passing through private agricultural land in Gujarat was calculated using Jantri rates — government-notified circle rates that typically lag behind actual transaction prices — and disbursed in three separate instalments. Critics and farmer groups had argued this left landholders under-compensated relative to what the same land would fetch on the open market.

Gujarat has simultaneously pursued aggressive expansion of its electricity transmission network, including renewable energy evacuation lines, making land-use disputes with farmers a recurring friction point. The shift to market-linked compensation mirrors adjustments seen in other Indian states when rolling out high-voltage or grid-scale renewable infrastructure.

Market Rate Committee

To operationalise the new rate, the state government will constitute a Market Rate Committee (MRC). The body will include representatives of affected farmers and their authorised market valuers, alongside government officials, to ensure the land valuation process is independent and transparent.

The MRC's formation and its first operational guidelines will be closely watched, as the committee's methodology will directly determine how much individual farmers receive and could set a precedent for future infrastructure projects across the state.

Stakeholders and Impact

The primary beneficiaries are farmers whose land falls along existing or planned electricity transmission corridors in Gujarat. Power transmission utilities — both state and central — will face higher land-use costs, which could feed into project estimates for new lines.

For farmers, the shift to a single upfront payment eliminates the cash-flow uncertainty that came with staggered disbursements, a change that smaller landholders in particular are expected to welcome. The inclusion of farmer-nominated valuers on the MRC is also a structural departure from purely government-controlled assessments.

What's Next

The immediate milestones will be the formal gazette notification constituting the Market Rate Committee and the publication of its operating guidelines. Pending transmission projects in the state may see revised cost estimates once the new compensation framework is applied. The policy could also influence how other BJP-governed states approach similar land-use compensation revisions as India expands its national grid.