Selling Punjab State Power Land Assets Is Illegal and against Public Trust, Warns EAS Sarma

Moneylife Digital Team 05 January 2026

Economy & Nation

Cautioning the Punjab government against proceeding with the proposed sale of land assets belonging to the Punjab State Power Corporation Ltd (PSPCL), former Union power secretary EAS Sarma has described the move as prima facie illegal, imprudent and against public interest.

Mr Sarma, in a detailed letter addressed to Punjab's chief secretary KA Prasad Sinha, urged the state government to revoke the proposal immediately, warning that alienating such land could violate the very legal basis on which it was originally acquired.

Mr Sarma was responding to media reports suggesting that the Punjab government is considering monetising PSPCL’s land holdings as part of a broader effort to raise funds.

In his letter dated 5 January 2026, the former Union secretary pointed out that most of PSPCL’s land parcels were acquired under the Land Acquisition Act, 1894, specifically for a 'public purpose'.

He noted that the Act defined public purpose to include the provision of land for corporations owned or controlled by the state. According to Mr Sarma, this statutory condition places a clear restriction on how such land can be used.

“If the Punjab government now alienates those lands to private agencies, it would amount to a gross violation of the statutory requirement,” he wrote, adding that such a move would also constitute a breach of public trust.

He argued that transferring these lands to private entities would fundamentally defeat the purpose for which they were acquired, exposing the government to serious legal and constitutional scrutiny.

Beyond legality, the former Union secretary also raised concerns about the long-term consequences of selling PSPCL land to private parties, warning that it would effectively place valuable public assets in the hands of real estate developers.

He cautioned that such a move would allow private interests to profit at the expense of the state, while weakening PSPCL’s ability to plan for future expansion of its infrastructure and operations.

“PSPCL itself will require these lands in the future,” Mr Sarma wrote, underlining the strategic importance of retaining land assets for a power utility that is central to Punjab’s electricity supply.

Mr Sarma criticised what he described as a short-sighted land monetisation exercise, suggesting that Punjab was attempting to replicate asset-sale policies pursued by the National Democratic Alliance (NDA)-led Union government.

He accused the Union government of undertaking a 'senseless spree' of selling central public sector enterprises (CPSEs) and their assets under pressure from corporate interests, a policy he says runs contrary to the public good.

“It is unfortunate that an Aam Admi Party (AAP)-ruled Punjab should cave in to pressure from the NDA government at the Centre and yield to corporate pressure within the state,” Mr Sarma wrote.

Concluding his letter, the former Union secretary appealed to the Punjab government to abandon any plan that could financially or institutionally weaken PSPCL.

He urged the state to revoke the decision to monetise the power utility’s land assets and instead focus on strengthening the public sector undertaking which plays a critical role in Punjab’s economic and social infrastructure.

The Punjab government has not yet issued a public response to Mr Sarma’s letter. However, the intervention by the former senior bureaucrat is likely to intensify scrutiny of the proposed asset sale, particularly on legal and public interest grounds.

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