On 11 August 2025, the Punjab government withdrew the Land Pooling Policy (LLP) 2025, which it had introduced earlier in June. Under the LPP 2025, the state government had planned to acquire 65,000 acres of land across 165 villages and 27 cities in Punjab for industrial and residential development. However, this move by the government saw protests from farmers’ groups and landowners across the state. Following the protests, on 7 August 2025, the Punjab and Haryana High Court stayed the policy, citing that the state had not conducted a Social Impact Assessment or an Environmental Impact Assessment before carrying out its proposed development work. Four days after the court’s order, the government scrapped the policy. 

While introducing the Land Pooling Policy 2025, the Punjab government had stated that the Department of Housing and Urban Development aims to create “well planned urban estates” by “consolidating fragments of land parcels.” The government further stated that under the policy, farmers and landowners can opt to pool their land, and they will later receive 1,000 square yards of residential land and 200 square yards of commercial land in developed zones in exchange for each acre pooled. The rest of the land will be used for infrastructural development.

The policy also said that an amount of Rs 50,000 will be offered against a letter of intent for land pooling, along with an annual allowance of 1 lakh rupees with regular yearly increments. The government also said that the land acquisitions under the LPP 2025 will be carried out following the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. 

As soon as the policy was introduced, it faced backlash from farmers, landholders, farm leaders, and other political leaders from within the opposition, as well as within the AAP government in Punjab led by Bhagwat Mann. Leader of the Samyukt Kisan Morcha termed the policy a “major conspiracy.” According to a report by The New Indian Express, the Samyukt Kisan Morcha (SKM), comprising 35 farm unions, had given a call for tractor marches, which got support from other farm unions, including the Kisan Majdoor Morcha (KMM) and BKU Ekta-Ugrahan.

Tractor marches were taken out in various parts of the state, including Ludhiana, Amritsar, Sangrur, Mohali, Bathinda, Taran Taran, Patiala, Ferozepur, Fategarh Sahib, Ropar, Jalandhar, SBS Nagar, Hoshiarpur, Moga and Mansa districts. "It was the biggest-ever march in recent times, as the public in rural areas showed their anger against the government’s bid to take over their fertile lands and displace them from their homes. This policy will ruin at least 20,000 families of farmers and leave farm labourers jobless," president of BKU (Rajewal Group) Balbir Singh Rajewal told The New Indian Express. 

On 7 August 2025, a petition was filed by a resident of Ludhiana challenging the move to earmark 26,000 acres of land for the setting up of residential and commercial projects. The petitioner argued that the policy was “arbitrary” and “irrational” and had been proposed without carrying out the necessary environmental and social impact assessment, which is an essential prerequisite for the acquisition of land under Sections 4 to 8 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. It was also argued that the policy has no provision for providing compensation at the time of acquisition, and only an annual livelihood allowance of Rs 50,000 per acre would be paid, but it would be too meagre for the sustenance of families of small and marginal farmers. The petition also argued that under the policy, the land acquired would not be through voluntary pooling but also would be forcefully acquired by the state under the Land Acquisition Act, 2013. 

The Punjab and Haryana High Court put an interim stay on the LPP 2025. “The policy appears to have been notified in haste and all concerns, including social impact assessment, environmental impact assessment, timelines and redressal grievance mechanism, should have been addressed at the very outset in the policy, before its notification,” the court said. “As an interim measure, lest any rights are created, the impugned Land Pooling Policy, 2025, notified on 14.05.2025 and 04.06.2025, and subsequently amended on 25.07.2025, shall remain stayed,” the court ordered. 

A few days later, the Punjab government, through an official notification, withdrew the Land Pooling Policy 2025. In a statement, the principal secretary, Housing and Urban Development, said, “The government hereby withdraws the Land Pooling Policy dated May 14, 2025, and its subsequent amendments. Consequently, all actions, like LOIs issued, registration done, or any other action taken thereunder, shall be reversed henceforth.” Farmers and several organisation hailed it as a victory.