New Delhi: The Himachal Pradesh Assembly on Friday passed the Himachal Pradesh Land Revenue (Amendment) Bill, 2025, aiming to generate revenue by taxing government and private land diverted for non-agricultural purposes.
Tabled on the penultimate day of the budget session, the Bill amends the Himachal Pradesh Land Revenue Act, 1954, to target land used for industries, hotels, hydroelectric projects, and other non-agricultural land for such purposes.
Apart from this Bill, three other amendment bills to hike the salary and allowances of the chief minister, the ministers and the legislator were passed on the last day of the budget session.
The latest step follows the cash-strapped state’s failed attempt to impose a water cess through the Himachal Pradesh Water Cess on Hydropower Generation Bill on hydroelectric projects. Later, the Himachal Pradesh High Court had declared the water cess as “unconstitutional” after around 40 power-generating companies challenged the legislation.
Under the new provisions, the government will conduct a special assessment to fix land revenue, capped at four percent of the average market value. For vacant and unused sites, the rate will not exceed one percent. Additionally, environment cess of up to two percent of the assessed land revenue will be levied, with the proceeds directed to a dedicated Environment Fund for conservation efforts.
The Bill also covers private land diverted for non-agricultural use, a significant shift from the current system where land revenue—pegged at a nominal Rs 1 per bigha every six months for agricultural land—has remained unchanged since 1954.
Presenting the Bill, Revenue Minister Jagat Singh Negi said the amendments to Sections 4, 49, 50, 51, 63, 68, and 170 of the Act were necessary to align it with contemporary needs and address revenue management challenges. “This is a step towards effective revenue collection while tackling practical issues,” Negi informed the state assembly.
The special assessment will rely on two existing formulas in the Act—up to one-fourth of the net letting value (rental value) or a maximum of four percent of the average market value—while allowing the government flexibility to adopt other methods as deemed fit.
Section 63 has been amended to include leased land and diverted forestland under the revenue net, alongside land already used for non-agricultural purposes. Landowners failing to pay the revenue or cess will face a one percent monthly interest penalty. Payment can be made annually or in installments.
The government has reserved the right to exempt specific projects from the revenue levy. For private agricultural landowners, the nominal rates remain unchanged.
Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu told the media that the passage of the Bill was crucial for resource mobilisation. “This is a part of our effort to generate revenue from our sources. As per a rough estimate it would generate a maximum of Rs 1,000 crore per annum,” he added.
(Edited by Tony Rai)
Also Read: Himachal braces for ‘toughest’ yr. How state’s budget aims to deal with soaring debt, falling grants