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Land Acquisition Compensation and the State Multiplier (2026)
How compensation for acquired farmland is built under the 2013 LARR Act: market value, the First Schedule multiplier of 1.00 to 2.00 for rural land, solatium and interest, and why the multiplier differs by project and state.
When the government acquires farmland under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR), the market value is not the end of the calculation. It is multiplied by a factor from the First Schedule, then solatium is added. For rural land the factor runs from 1.00 to 2.00 depending on distance from an urban area, as notified by the appropriate Government. This guide explains each step and what we could and could not confirm about state notifications.
The calculation in order
The Act, in the Gazette text we opened, sets out how the Collector arrives at the award. Section 26(1) fixes the market value, using the higher of the value in the stamp-registration schedule, the average of the higher sale prices of similar land nearby, or an agreed amount where a private company or public-private partnership project is involved. Section 26(2) says "the market value calculated as per sub-section (1) shall be multiplied by a factor to be specified in the First Schedule". Section 30(1) then requires a solatium "equivalent to one hundred per cent. of the compensation amount". Section 30(3) adds interest at "twelve per cent. per annum on such market value" for the period from the Social Impact Assessment notification to the award or possession, whichever is earlier.
| Step | Source | What it does |
|---|---|---|
| 1. Market value | Section 26(1) | Highest of the listed benchmarks |
| 2. Multiplier | Section 26(2) and First Schedule | Multiplies the market value |
| 3. Value of assets attached to land | First Schedule (we did not read the full item) | Added to the total |
| 4. Solatium | Section 30(1) | 100 per cent of the compensation amount |
| 5. Interest | Section 30(3) | 12 per cent a year from SIA notification to award or possession |
For the full process and your rights, read LARR land acquisition compensation.
What the First Schedule says on the multiplier
We could not extract the First Schedule from the official PDFs we opened; the Gazette scans we fetched stopped before the Schedule. The text of the Schedule that we read comes from a bare act reproduction (advocatekhoj.com), which is a secondary source. It gives the factor for rural areas as "1.00 (One) to 2.00 (Two) based on the distance of project from urban area, as may be notified by the appropriate Government". Solatium is stated as 100 per cent of the market value multiplied by the applicable factor. For urban areas the Schedule uses a different, separate item. We did not confirm its value.
The point for landowners is that the multiplier is not a fixed number. It is a range, and the number actually applied depends on a notification. A lower number means a lower award, and each 0.25 step on a large holding can change the amount by a large sum.
Who notifies: the appropriate Government
The appropriate Government for a project is defined in the Act. The Madhya Pradesh High Court decision on NH-148N, as summarised by SCC Online, shows how this matters. The court found that for land acquired by NHAI for a national highway, the Central Government was the appropriate Government, so the Central notification of 9 February 2016, which set the factor at 2.00, applied rather than the State notification of 29 September 2014, which set 1.00. The court left the exact multiplier to the arbitrator under section 3G(5) of the National Highways Act, in line with its findings.
A Lok Sabha reply of 8 March 2018 from the Ministry of Rural Development adds that a Central order dated 28 August 2015 applied the First Schedule compensation provisions to land acquired under 13 enactments, including the National Highways Act, 1956 and the Railways Act, 1989, with effect from 1 September 2015. So whether the Act, a different law, and which Government's notification applies can all change the multiplier.
Ask which law and which notification
For a highway, railway or state project, ask the Land Acquisition Collector or competent authority in writing: under which Act was the land acquired, who is the appropriate Government, and which notification fixes the multiplier for this village.
State multipliers: what we could confirm
The brief for this page was to give state multipliers only where we read them. We did not open an official gazette notification of the multiplier for Rajasthan, Haryana, Uttar Pradesh, Punjab, Uttarakhand or Himachal Pradesh, and we therefore do not give any value for them. Two examples we did read are from court reports, not from gazettes:
- Madhya Pradesh: a State notification dated 29 September 2014 fixed the factor at 1.00 (per the SCC Online report of the High Court order).
- Himachal Pradesh: a Verdictum report of a High Court judgment says the State applied a flat 1.00 to all rural areas through a notification of 1 April 2015 issued under section 30(2), and that the High Court quashed it, holding that the First Schedule gives a graded range from 1 to 2 and an executive notification cannot override it, and directed 2. We did not read the judgment itself, and the matter may be on appeal.
These show a pattern: states have notified low or flat factors, and courts have been asked to review them. They are not a table you can rely on for a claim.
Reading your award
- Find the market value rate the Collector used and the basis (registered values, nearby sales).
- Find the multiplier applied and the notification number cited.
- Check that solatium and interest are included.
- Check the area, khasra numbers and holder names against the revenue record. See government acquisition notices.
- Note the time limits for seeking reference or appeal in the award; we did not confirm them here, so read the notice carefully.
Where an award appears low, a lawyer who handles land acquisition references can compare the rate with recent registered sales. Circle rates are a different concept; see circle rate vs market rate.
What this means for buyers
Land near a planned highway or airport may be acquired at the multiplier-based rate, not at the inflated asking price. Before paying, check whether the plot is already notified; see check government acquisition notices, Delhi-Mumbai Expressway land impact, Delhi-Dehradun Expressway and Jewar airport land guide. A buyer who purchases after a notification may face limits on compensation. We did not confirm the details of that rule, so seek legal advice.
Compensation received may have tax consequences, which change from year to year; the Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 and section numbers changed, so check the current year.
What is unconfirmed
We did not confirm: the First Schedule text from an official source (only a bare act reproduction), the urban factor, the multiplier notified in each North Indian state, whether any state has revised its notification since, and time limits for challenging an award. This page is general information, not legal advice.
Frequently Asked Questions
What is the multiplier in land acquisition compensation?
Who decides the multiplier?
Is the multiplier the same in every state?
Is solatium added on top?
Is interest payable?
Does the multiplier apply to highways and railways?
Can a state notification be challenged?
How is market value fixed?
Where can I read the Act?
What should I do if my award looks low?
Sources
- RFCTLARR Act, 2013 (Gazette text, sections 26 and 30)
- RFCTLARR Act, 2013 (Gazette scan)
- First Schedule text (bare act reproduction, secondary source)
- Lok Sabha unstarred question reply, 8 March 2018, Ministry of Rural Development
- SCC Online: MP High Court on multiplier for NH-148N (secondary)
- Verdictum: Keshav Ram v. State of Himachal Pradesh (secondary)
