Land Pooling Scheme: Farmers to Receive ₹1 Lakh Annually from Punjab Government – CM

Chandigarh, July 22, 2025: In a major decision under the leadership of Chief Minister Bhagwant Mann, the Punjab Cabinet on Tuesday approved several farmer-friendly amendments to the Land Pooling Policy-2025. 

The most significant highlight of these amendments is that farmers will now receive an annual livelihood allowance of ₹1 lakh until their land is developed — a fivefold increase compared to the ₹20,000 given by previous governments.

The government has also assured long-term support by announcing a 10% annual increment in this ₹1 lakh amount. To ensure faster and more transparent processes, the government will now issue a Letter of Intent (LOI) to farmers within 21 days. For the convenience of farmers, the LOI can be sold or used to obtain loans. Furthermore, until development work actually begins, farmers can continue cultivating their land and will receive an additional ₹50,000 per year from the government.

Throughout the process, there will be no restrictions on the sale or purchase of land. Farmers will be free to buy, sell, or register their land at any time.

It is worth mentioning that to further streamline land acquisition by the Punjab Urban Planning and Development Authorities (PUDA) and other special development authorities, the Punjab Cabinet on Tuesday approved amendments to the Land Pooling Policy 2025.
These amendments aim to make the land collecting process by the Department of Housing and Urban Development more efficient, inclusive, and attractive. The Punjab Government had earlier introduced the Land Pooling Policy 2025 to involve landowners, promoters, and companies as stakeholders in urban development and to encourage participation in land pooling. To gather feedback for the policy, the state government conducted several meetings with sarpanches of various villages, representatives of different unions, and farmers. 

Based on the suggestions received, amendments have now been incorporated into the policy to make it more progressive, rational, and development-oriented. As per the amended policy, landowners whose land is taken will be offered an alternative of 125 square yards of residential land and 25 square yards of commercial land per kanal of land. Additionally, the department will issue a Letter of Intent (LOI), enabling landowners to obtain bank loans.

Furthermore, upon issuing the LOI, the department will provide landowners with a lump sum of ₹50,000 as a subsistence allowance. After taking the possession landowners will be paid an annual payment of ₹1,00,000. This annual amount will increase at a rate of 10% per year, starting from the date of taking land until the developed plots are handed over to the respective parties. 

It was also decided that no charges other than External Development Charges (EDC) will be levied in the case of land pooling involving 50 acres or more. Additionally, landowners surrendering commercial land will receive three times residential area in return. For example, if a farmer contributing one acre opts out of a 200-square-yard commercial plot, they will instead receive a 600-square-yard residential plot. In such a case, the farmer will be allotted a total of 1,600 square yards of residential land in the urban estate for each acre contributed.