The framework mandates separate valuation of buildings and clear rules for public versus commercial use to improve transparency, prevent undervaluation and unlock revenue for public projects. Land transfers to private players and states will require cabinet approval.
“One of the clear differentiators is that transfers for public purposes will typically be priced at guideline rates, while commercial transactions will follow market rates, which reduces so many disputes,” a senior official told ET.
This will help meet the target of realising ₹16.72 lakh crore from government land and other assets sales under the National Monetisation Pipeline 2.0 (NMP 2.0) in five years from FY2026 to FY2030, the official added.
Until now, “rules related to land transfers were not standard, often causing disputes, and were one of the stumbling blocks in monetising land assets, buildings and other spaces,” the official explained.
As per the framework, valuation of land and structures will primarily be conducted by the National Land Management Committee (NLMC), which may charge a fee for its services. Buildings or superstructures on land will be valued at current replacement cost minus depreciation.
In Case of Competing Demands
As per the new framework, where two ministries are seeking the same land assets, the expenditure secretary may conduct inter-ministry consultations to weigh competing demands, alternative uses, and opportunity costs before approvals.
Earlier this week, the department of expenditure under the finance ministry issued two office memorandums amending clauses related to land transfer rules in the General Finance Rules 2017 to facilitate the new framework.
It also issued separate guidelines consolidating all prior instructions while defining procedures, valuation methods, and competent authorities for land transfers and disputes.
In case of central public sector enterprises’ (CPSE) land transfers, the department of public enterprises will separately issue a formal policy, the official said.
The framework has defined the nominal values for sale and lease transactions, differentiating public-purpose transfers from commercial ones, and noted that all the proposals for the land usage must be supported by concrete plans or projects with clear timelines.
The new framework will not cover cases where allotment orders were given prior to March 31, 2026.