Mahayuti Announces Interest Waiver for Farmers Hit by Land Acquisition Delays

In a significant policy shift that could impact thousands of farmers, the Maharashtra government has decided to reduce the interest paid on delayed compensation for land acquired for public projects. The decision, taken at the state cabinet meeting on Tuesday, aims to curb the growing financial burden on the state exchequer amid economic instability.

Previously, the government paid interest ranging from 8% to 15% on delayed payments, in line with provisions under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Now, a uniform interest rate—1% higher than the current bank repo rate—will be applicable, effectively reducing the compensation for project-affected persons (PAPs).

“The interest rates have been standardised. In case of delays in paying land acquisition compensation, a uniform interest rate—1% above the prevailing repo rate—will now be applied,” the Chief Minister’s Office said in a release.

This amendment is expected to reduce both project costs and the state’s overall financial liability. However, critics argue that the move disproportionately affects farmers, who are already grappling with economic stress and uncertainty.

The 2013 Land Acquisition Act was introduced to reduce resistance to land acquisition by ensuring fair compensation and timely payouts. It included provisions under Sections 30(3), 72, and 80, mandating interest payments of up to 15% if the compensation was delayed. The state’s decision to amend this could dilute the financial safeguards previously guaranteed to PAPs.

A bill to officially revise the interest structure will be introduced in the monsoon session of the state legislature.

This is not the first time the Mahayuti government has rolled back its pre-election promises. In the lead-up to the last Assembly elections, the alliance pledged major relief to farmers, including a comprehensive loan waiver. However, on March 30, Finance Minister Ajit Pawar announced that no such waiver would be granted in the near future. This comes after the government also declined to increase payouts under the Ladki Bahin Yojana from Rs1,500 to Rs2,100 per month.

Opposition leaders and farmer organizations have already begun criticizing the latest move, calling it “anti-farmer” and warning that it may reignite protests over land acquisition.