MUMBAI: The Maharashtra Cabinet, chaired by Chief Minister Devendra Fadnavis, on Tuesday approved concessions on land transfers between group companies and special purpose vehicles (SPVs) to reduce costs and speed up renewable energy projects in the state, The Hindu reported.
Under the decision, internal land transfers between group or SPV companies will receive a 25% reduction in land transfer fees and a full exemption from stamp duty. The concessions will be included in the State Renewable Energy and Energy Storage Policy 2025-36.
Previously, a group company or subsidiary transferring land internally was required to pay a transfer fee equal to 25% of the land’s market value to the district collector. The government said the cost had increased the financial burden on renewable energy projects and contributed to delays.
The concession will apply only if the land continues to be used for renewable energy projects. If a company obtains the benefit by claiming an internal transfer but later uses the land for another purpose or sells it, the government will recover the transfer fee along with interest, according to a statement from the Chief Minister’s Office.
The Cabinet also approved a complete stamp duty exemption for internal land transfers between group companies and SPVs involved in renewable energy projects.
Renewable energy companies often establish separate SPVs to develop individual projects. Land purchased by the parent company may subsequently be transferred to the SPV. Under the existing system, such an internal transfer could attract stamp duty even though the land had already been subject to the duty when it was purchased.
The government said removing the additional charge would reduce project costs and support faster development of renewable energy projects.
Interest rate revised for delayed land compensation
The Cabinet also approved a change in the interest rate payable when compensation for land acquisition, rehabilitation and resettlement is delayed.
The new interest rate will be one percentage point higher than the rate at which the Reserve Bank of India lends to commercial banks.
Under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, affected landowners are entitled to interest when compensation is delayed after their land has been taken over by the government.
The Chief Minister’s Office said the change was approved because the existing interest rate did not adequately reflect prevailing bank lending rates. The government will amend Section 72 of the Act to implement the revised rate.The move comes amid concerns over delays in compensation payments to people affected by land acquisition projects. In some cases, project-affected people have had to wait for years to receive compensation, with compensation related to CIDCO’s NAINA project still pending, according to the CMO.
