Govt likely to roll back FSI largesse to suburbs

Policy makers,however,indicate the scheme is likely to be shelved. “The existing Development Plan (DP) is not planned for an FSI of above 1. If more construction is allowed,it would put a tremendous strain on infrastructure in the 300 sq km area of suburbs,” said a senior government official,adding that increasing the FSI cannot be considered until the present DP is revised.

The Vilasrao Deshmukh government had in March 2008 increased the base FSI in the suburbs from 1 to 1.33 — instead of constructing 10,000 sq mts built-up area on a 10,000 sq mt plot,a developer could now construct 13,000 sq mts. The move was aimed at reducing developers’ dependence on the very expensive TDR (Transfer of Development Rights). The additional FSI was to be made available at rates lower than TDR rates. TDR is a kind of floating FSI which is generated and sold by developers who take up slum rehabilitation projects.

Currently,there is 6.5 lakh sq mts of TDR in the market with the major TDR traders being listed players like DB Realty,HDIL and Ackruti. “The supply of TDR is limited. On the other hand,if the 0.33 FSI policy is allowed to continue,it will translate into 30 million sq mts of additional space,” said the official. Senior government officials point out that repealing the additional FSI may increase the TDR rates but in the larger interest of the urban planning,the government is inclined to stall the extra FSI.

If the state government goes ahead with its plan of scrapping the extra FSI in suburbs,this would be the second most important real estate policy decision that would be reviewed by the new Chief Minister. Just a couple of months back,the government had decided to put on hold permissions for the additional FSI granted to developers constructing public parking lots in the island city.