The Maharashtra Government is considering an amendment to the Mumbai Regional Town Planning Act to hike the floor space index (FSI) in suburbs from one to two.
(FSI is the ratio of the total floor area of building to the size of the land, or the limit imposed on such a ratio).
Speaking on the sidelines of a CII real estate conclave, the Maharashtra Minister of State for Housing, Sachin Ahir, said that in any case two FSI was inbuilt in the system – 0.33 from the State and the rest by purchase of transfer of development rights (TDR).
TDR allows owners of property that are zoned for low-density development or conservation use to sell development rights to other property owners or use it themselves.
The permissible FSI in suburbs is two, of which one is permitted by the Act and balance is by way of loading.
The State offered 0.33 FSI at a premium of 30 per cent over and above the Ready Reckoner rate and the revenue garnered also went to the local civic bodies.
The Bombay High Court recently struck down the government order of according 0.33 additional FSI at a premium. This has raised questions on the legality of structures that are loaded with the additional FSI as also the premium the government had collected.
Further, TDR rates too have appreciated. The government intention of awarding the additional FSI to some extent helped in capping the prices of TDR and realty prices.
Industry sources say that without the government accorded FSI, property prices will go up by over five per cent. For developers keen on going in for high rises, the TDR is the only route to get the additional FSI. The TDR loading is permitted only in the suburbs and not in South Mumbai.
Ahir said the increase in FSI was done to create additional housing as there was a disparity in the permissible norms between city and suburbs. The government decision helped to even out the difference as a maximum of 1.33 FSI is permitted in the city.
