VIJAYAWADA: In a major policy shift aimed at empowering marginal farmers, and accelerating the state’s renewable energy ambitions, the State Cabinet has approved amendments to the Assigned Lands (Prohibition of Transfers) Act, 1977 allowing assigned lands to be leased out exclusively to renewable energy companies.
The move enables solar, wind, compressed biogas (CBG), and pumped storage firms to lease assigned lands in designated zones identified by the State government for green energy development.
Until now, farmers holding assigned lands were permitted to cultivate them only. In the event of crop failure or natural calamities, they had no alternative but to endure the loss. With the new policy, all of this is set to change. Assigned lands can now be leased out for renewable energy projects, offering farmers a stable, and assured income regardless of agricultural risks.
“This is a golden opportunity for poor farmers,” said Revenue Minister Anagani Satya Prasad.
“We are reforming the revenue system to ensure assigned lands provide stable income. These farmers will become stakeholders in Andhra Pradesh’s renewable energy future. Their children will find employment in upcoming plants. This is a step toward making AP poverty-free,” he said.
AP has 36.36 lakh acres of assigned land, of which 26.43 lakh acres are now eligible for lease under the revised policy. The leasing process will be facilitated through NREDCAP or a soon-to-be-established Rural Energy Board. Firms can set up renewable energy plants only in pre-identified zones, either on government-allotted or leased private and assigned lands.
The new policy is expected to generate significant economic benefits. Lease rates will range between Rs 30,000 and Rs 40,000 per acre annually, with a 5% hike every two years. Companies are also required to provide employment to at least one unemployed member from each beneficiary family.
For smallholders owning 1–2 acres, this ensures steady income without agricultural risks. The Cabinet approved amendments to Sections 2(6), 3(2), and 3(2A) through the AP Assigned Lands (Prohibition of Transfers) Amendment Ordinance, 2025, processed via GOs 50 and 51 on October 10.
The government said the policy unlocks vast land for renewable energy, empowering farmers and driving growth.