The New Realty in Punjab: Creating a Pool of Goodwill— and Developed Plots

By aligning interests of the state, its citizens, and the market, this initiative under CM Bhagwant Mann’s leadership and innovative policy framework sets a new benchmark for inclusive urban growth.

Creating a Pool of Goodwill

1. Land Pooling: A Quiet Revolution in Planned Urbanisation

In a transformative move aimed at redefining the dynamics of urban expansion, Punjab’s Land-Pooling Policy 2025, notified today (June 4, 2025), has emerged as a new blueprint for participatory development. In place of coercive land acquisition—often hamstrung by the procedural and compensation constraints of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013—the government now invites landowners to become co-developers, sharing not just land, but also the fruits of urban growth. This quiet revolution is steadily converting erstwhile resisters into willing stakeholders, creating what many are calling a “pool of goodwill” in the state’s evolving development narrative.

2. Under the CM’s Vision: A Political Mandate with a Human Touch

This progressive policy carries the clear imprimatur of Punjab Chief Minister Bhagwant Mann, who personally chaired the Cabinet meeting of the Council of Ministers that granted it formal approval earlier this week. His government’s approach is anchored in a pragmatic recognition: even generously compensated compulsory acquisitions—such as those under the National Highways Act—often provoke sharp resistance and prolonged agitation among Punjab’s farming communities. By replacing confrontation with collaboration, the Chief Minister’s enlightened vision presents a humane and politically astute alternative—one that balances development imperatives with grassroots sensitivities and the dignity of landowners.

3. From Acquisition Anxiety to Collaborative Confidence

The days of forced acquisition are being quietly retired. Farmers and landowners, once locked in bitter legal battles against the state, are now can become willing and strategic participants. Instead of one-time payouts, they have the option to receive developed residential, industrial, or commercial plots as equity returns on their land contribution. With additional support like a ₹30,000-per-acre subsistence allowance during the development phase, landowners are gaining not only security but a stake in the state’s future.

4. Innovative Bureaucracy and Civil Service Leadership

At the heart of this transformation lies a quietly determined and reform-oriented bureaucracy. Principal Secretary Vikas Garg, IAS, has piloted the policy’s formulation and rollout with rare clarity, foresight, and responsiveness. One of the most empowering features of the framework is that the Letters of Intent (LOIs) issued to landowners are officially transferable, creating the foundation for a robust secondary market. This not only enhances liquidity but also allows landowners the freedom to book profits or cash out, should they so choose—transforming what was once dead capital into a tradable asset.

Garg’s team has also introduced a suite of citizen-sensitive innovations—from special LOIs for micro-holdings, to seamless layout approvals, and real-time public feedback mechanisms. These reforms reflect an administration that is not merely executing policy but actively enabling participation and trust. Under his leadership, the government machinery is being reshaped from an enforcer into an enabler—proving that good governance can be both firm and facilitative.

5. Master-planning with Integrity

Despite opening the gates to private participation, the sanctity of the master plan remains intact. Only about one-third of pooled land is returned to owners as developed plots, while the remaining area is retained by authorities for parks, roads, utilities, and public infrastructure. This ensures that new sectors do not suffer from the chaotic sprawl of earlier times. External development charges (EDC), quantified in advance, safeguard budgetary provisions for roads, sewage systems, and power grids—an essential guarantee for end-users and future residents.

6. Thinking Big: Unlocking the 9-Acre and 50-Acre Opportunities

Two special windows give this policy its strategic edge. Landowners pooling nine acres or more can secure group housing permissions on three acres, making vertical, serviced residential clusters viable. Meanwhile, land aggregators crossing the fifty-acre threshold qualify for thirty-acre plotted colonies, provided they follow a smart layout mix—20% roads, 10% green, 5% commercial, and 65% plotted housing. This enables Punjab to incubate township-scale developments that are integrated, inclusive, and scalable—without bypassing the master plan.

7. A Win-Win-Win Equation for All Stakeholders

For landowners, the new model offers more than just physical plots—it delivers income-tax-free compensation, as permitted under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Section 96), making the returns significantly more attractive than taxable cash awards. The flexibility to freely transfer Letters of Intent (LOIs) in an officially recognised secondary market empowers owners to either book profits or monetise their holdings, depending on their financial goals.

For urban development authorities, the gains are structural. There is no need for massive upfront acquisition budgets—which in the past would have required extensive borrowing from financial institutions, most of whom insist on a Punjab government guarantee. This is particularly critical at a time when the State is already grappling with an accumulated debt burden nearing ₹4 lakh crore. The exemption from the payment of any Stamp Duty at the stage of the first acquisition is also total (Section 96).

For plot buyers and end-users, the policy ensures access to fully serviced plots with clean title, transparent pricing, and no hidden levies—a rarity in many urban estates where unclear dues and murky documentation often delay possession or registration.

This is a rare public policy that genuinely creates a “win-win-win” framework—delivering tangible value to landowners, institutional certainty to authorities, and long-term security to end-users. At the same time, it minimises the social and legal friction that has long plagued land aggregation in Punjab and across India.

8. Risks, Lightly Shaded

Contrary to a popular misconception, the Letter of Intent (LOI) is fully tradable from day one—there is no lock-in period on its transferability. The notion of a three-year lock-in appears to be a myth propagated, perhaps deliberately, by individuals with vested interests seeking to dissuade landowners from participating or holding out for acquisition.

That said, no innovation is entirely without risk. While the LOI can be sold or transferred at any time, some landowners—especially smaller holders—may feel constrained if they seek cash immediately and cannot realise the full value in the early resale market. Additionally, external development charges (EDC), pegged to prevailing authority rates, could rise unexpectedly, impacting net gains. Coordination among multiple landowners, particularly in sharing zonal infrastructure costs, may also pose challenges and lead to execution delays.

Yet, these risks are manageable—not structural. With transparent execution, phased servicing, and clear institutional accountability, the framework is robust enough to absorb these shocks while preserving the long-term value proposition for all stakeholders.

9. Summing Up: A Blueprint Worth Watching

Punjab’s Land-Pooling Policy 2025 is not just about land—it is about dignity in development. By aligning the interests of the state, its citizens, and the market, this initiative under Chief Minister Bhagwant Mann’s visionary leadership and Principal Secretary Vikas Garg’s innovative execution sets a new benchmark for inclusive urban growth. If it succeeds in delivering time-bound infrastructure and transparent plot allotments, it could well become a national template—an enduring pool of goodwill that refreshes Punjab’s development ethos.

By Karan Bir Singh Sidhu

Retired IAS officer, Punjab cadre; former Special Chief Secretary, Government of Punjab.

Karan Bir Singh Sidhu brings extensive experience in the housing and urban development sector, having served as Chief Administrator of the Punjab Urban Planning and Development Authority (PUDA) from 1999 to 2002, and later as Principal Secretary, Housing and Urban Development, Punjab, from 2004 to 2006. At the national level, he was Joint Secretary in the Ministry of Housing and Urban Affairs, Government of India (2013–15), where he played a key role in forging the national consensus on the Real Estate (Regulation and Development) Act (RERA) under the leadership of then Union Minister M. Venkaiah Naidu.

He now writes on land reforms, urban governance, and public policy with a sharp Punjab perspective.