The Ministry of Power, Government of India, has issued new guidelines for determining compensation for Right of Way (RoW) damages associated with the construction of Inter-State Transmission System (ISTS) lines. Dated October 6, 2026, the guidelines supersede previous circulars and aim to resolve disputes over land compensation, improve transparency in valuation, and accelerate the development of transmission infrastructure across the country.
The new framework applies to transmission lines with a voltage level of 66 kV and above in cases where landowners dispute the proposed compensation because official circle rates are lower than prevailing market prices. Compensation will cover both the tower base area and the Right of Way corridor, in addition to payments for damage to crops and trees during construction.
Under the revised guidelines, land valuation will primarily be based on circle rates or market rates, with the latter determined by a Market Rate Committee (MRC). The committee will be chaired by the District Magistrate or Collector and will oversee the process of establishing an appropriate market value for the affected land.
The market rate will be assessed through valuations prepared by three independent land valuers empanelled by the Insolvency and Bankruptcy Board of India (IBBI). These valuers must submit their reports in sealed envelopes within 21 days. Their valuation figures will then be normalized within a range of 20% above or below the median value. The average of the normalized figures will be used to determine the final market rate.
The guidelines establish separate compensation rates for the tower base area and the RoW corridor. For the tower base area, compensation will be calculated at 200% of the determined market value. The area will include the space enclosed by the tower’s four legs, along with an additional one-metre extension on each side.
For the RoW corridor, compensation will depend on the location of the affected land. Landowners in rural areas will receive compensation equivalent to 30% of the market value. The rate will increase to 45% for areas within municipalities and nagar panchayats and 60% for municipal corporations and metropolitan regions. However, construction of any kind will remain prohibited within the designated RoW corridor.
The framework also addresses cases where local municipal authorities use alternative compensation mechanisms, including Transfer of Development Rights (TDR). In such situations, the transmission service provider (TSP) will deposit the calculated compensation directly with the relevant development authority.
Compensation will be paid as a one-time, upfront amount for the designated stretch of transmission work. The guidelines allow digital payment methods, including the Unified Payments Interface (UPI) and the Aadhaar Enabled Payment System (AEPS), to facilitate timely disbursement.
To reduce land requirements in areas facing RoW constraints, the Ministry has also identified alternative transmission technologies. These include narrow-based lattice towers, steel pole structures, compact towers and underground cables, which can help minimize the physical footprint of transmission infrastructure.
The guidelines further clarify the treatment of RoW compensation costs under Tariff Based Competitive Bidding (TBCB). If actual compensation differs from the amount included in the base scheme, the Central Electricity Regulatory Commission (CERC) will allow the additional amount as a pass-through under the Change in Law provisions.
Landowners or other parties dissatisfied with the MRC’s decision may appeal to a State-notified Appellate Authority within 30 days. However, the landowner must allow transmission work to proceed while the appeal is pending. The authority’s decision will be final and binding.
The revised framework is expected to provide a more structured approach to land valuation and compensation, reduce disputes between landowners and transmission developers, and support faster implementation of India’s inter-state transmission infrastructure.
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