The Himachal Pradesh government has decided to start collecting land revenue from power projects operating in the state. Additional Chief Secretary of the Revenue Department, Kamlesh Kumar Pant, has issued a notification directing the initiation of special assessments for this purpose.
According to the notification, settlement officers of the Shimla and Kangra Settlement Divisions have been instructed to begin special assessments from power projects under the newly amended Himachal Pradesh Land Revenue Act, 1954 — marking the first-ever amendment to this law since its enactment.
The state government has set a target to collect ₹1,018 crore through land revenue in the current financial year’s budget. Initially introduced through an ordinance and later passed as a bill in the Assembly, the new provision was approved by the Governor.
Under Section 52 of the amended Act, the government can now levy land revenue through special assessments on any land used for non-agricultural purposes, including hydropower and other commercial projects. The revenue will be calculated based on the current cost of such projects, with a maximum rate capped at four percent. The exact rate will be determined by the government in due course.
Officials said that the process of special assessments will begin with hydropower projects, which occupy large tracts of diverted land. The move is expected to generate significant revenue for the state and ensure that commercial use of land contributes fairly to public finances.
The Himachal Pradesh Land Revenue Amendment Act, 2025, also provides that land revenue may be separately levied on agricultural land diverted for non-agricultural purposes, such as commercial or industrial activities. The assessment formula will take into account factors like the land’s rental value, market value, or other valuation methods decided by the government.
In addition, an environmental cess will be levied on the land revenue collected, and an environmental fund will be established to utilize these proceeds. The fund will be used to support environmental protection and restoration efforts in the state, particularly in areas affected by large-scale infrastructure and hydropower development.
