Maharashtra’s Land Cash-In: Encroached Govt Lands to Fuel Financial Revival

Updated: November 23, 2025 09:13

Facing a severe financial crunch, Maharashtra government is actively monetising encroached government lands by forming a high-level panel to regularise encroachments and lease land parcels, especially in tier 2 and 3 cities. This policy aims to generate revenue through property tax and leases to bolster urban local bodies’ funds.

The Maharashtra government has taken decisive steps to address its pressing financial challenges by moving forward with monetisation plans for encroached government land. A high-level committee, led by Principal Secretary (Urban Development) Aseem Gupta, has been formed to study and draft a comprehensive policy to regularise encroachments and monetise government lands through leasing, targeting especially smaller cities.

Regularising Encroachment

One of the primary goals is to bring encroached land into the formal fold, ensuring encroachers pay property tax, which has historically been a missed revenue opportunity. The state has planned to regularise encroachments on lands belonging to municipal corporations, councils, rural development, and urban development departments. Encroachers on smaller land parcels up to 500 sq ft can have their holdings regularised free of cost, while larger areas will require purchase at prevailing rates under government scrutiny.

Panel’s Mandate and Impact

The eight-member panel is interviewing stakeholders across departments like revenue, housing, and urban development to draft policies that promote planned urban growth and generate sustainable income for local bodies. The leases of these lands to private parties are expected to provide a consistent income source, aiding local governments facing extreme fund shortages.

Broader Context of Land Rights Reform

This initiative fits with recent government reforms which include granting ownership rights to encroachers on state-owned land prior to 2011, potentially benefiting millions of households. These moves collectively aim to tidy Maharashtra’s chaotic land records while mobilising dormant assets toward economic use and generating tax revenue to bridge fiscal gaps.

Challenges and Criticism

Despite the promise, these policies face scrutiny and criticism given past controversies involving land deals and accusations of undervaluation or irregularities. Transparency and proper implementation will be key to ensure genuine monetisation benefits and avoid misuse of public assets.

Sources: Hindustan Times, The Realty Today, Times of India, India Today, Moneylife, NDTV, The Federal, Mid-Day, Indian Express, The Print.

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