Most of the government agencies and departments are endowed with limited amount of land ownership; more so, in an urban area wherein private ownership of land tends to have a larger pie of total available land. Hence, land would have to be acquired from private parties for public purposes like infrastructure development. However, land acquisition is never easy to achieve:
- Private land ownership tends to be highly fragmented and would require spending good amount of time on their identification, liaison and seeking cooperation
- Private land owners generally ask for market prices for their land, which is difficult to determine and governments take longer time to dispose the cases of payments. Also, the land prices fixed by the government based on land sales transaction prices did not always represent ‘fair price/value of land’.
The Concept of TDR
In traditional approach to town planning, the development potential (measured as development density) of land is fixed and not transferable i.e., it needs to be consumed at site. TDR is meant to facilitate the use of surplus/unutilised development potential at one site to be utilised elsewhere.
The TDR is based on the assumption that each unit of land in a city has the potential to accommodate at least some level of development, which is determined by the property zoning, land use and development control regulations.
Essentially, the differential development potential of land can be utilised in a positive manner to preserve certain land uses which are required to be kept with little or no development on site; while at the same time, This unutilised development potential is tapped for beneficial use in other sector – such as residential housing through the issue of TDR that can be used for such an exchange.
Douglas Keare of Harvard University in 1999 suggested the need for TDR like mechanism for a better urban land management in Mumbai, like in other countries such as USA and Chile.
Evolution of TDR in Mumbai
The Maharashtra Regional and Town Planning (MRTP) Act, 1966 clearly mandated the local and regional planning authorities to prepare land use and development plans for cities and empowered them with imposing regulations on the development in order to curb unorderly city growth (both horizontal and vertical). However, the local governments or planning agencies were not provided with financial resources for the same.
The costs of development planning and implementation are large due to the rising price of urban land and increasing opposition to the surrender of land, especially in large cities like Mumbai wherein land price and development pressures are very high.
The Municipal Corporation of Greater Mumbai (MCGM) is perhaps the first urban local government in India to introduce the concept of TDR. The Development Control (DC) Regulations 1991 of Greater Mumbai had laid down provision for TDR both to finance civic works in the wake of rising costs and to give a boost to residential development.
The DC Regulation 34 makes provision for granting TDR in lieu of compensation for land acquired for public amenities, social facilities and utilities in development plan subject to certain conditions under ‘Accommodation Principle’.
Recently, in November 2016, the Government of Maharashtra issued a notification under Section 37 (1AA) (e) of the MRTP Act, 1966, which proposed some major amendments to the earlier TDR scheme under the modified DC Regulation 34. This amendment also makes sure that the TDR scheme is in line with the provisions of Right to Fair Compensation & Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
TDR Design in Mumbai
The TDR is a market based instrument that tries to restore the demand – supply balance of development at a site. The development potential of land in Mumbai is determined in the form of the Floor Space Index (FSI) – a ratio of the buildable area to plot area.
FSI is prescribed differently across different zones and that leads to some localities or plots with high development demand/potential but low FSI and vice versa.
| Zone | Allowed FSI |
| Island City | 1.33 |
| Suburbs nearer to the City | 1.0 |
| Suburbs farther to the City | 0.5 |
| Protected industrial and coastal areas on east | 0.75 |
| Location of area under reservation | TDR Entitlement |
| Mumbai City (Island city) | Upto 2.5 times the area of surrendered land |
| Mumbai Suburbs/ Extended Surburbans | Upto 2 times the area of surrendered land |
| S No. | Road Width of Plots Fronting on (m) | Maximum permissible TDR loading | |
| Island City | Suburbs/Extended Suburbs | ||
| 1 | < 9 | - | - |
| 2 | 9-12.2 | 0.17 | 0.50 |
| 3 | 12.20-18.30 | 0.37 | 0.70 |
| 4 | 18.30-30.00 | 0.57 | 0.90 |
| 5 | >30.00 | 0.67 | 1.00 |
| Category of TDR | Area/ activity | Allowable FSI |
| Reservation | Island city | 1.33 |
| Suburbs (nearer) | 1.0 | |
| Suburbs (extended) | 1.0 | |
| Eastern City (M Ward) | 0.75 | |
| Amenities | Land development | 1.0 |
| Land development and construction work | 2.0 | |
| Construction work | 1.0 | |
| Road | Land development and construction work | 2.0 |
| Construction work | 1.0 | |
| Slum | Re-development | 2.5 |
| Heritage | Forgone additional FSI of the heritage site | Equivalent to the additional FSI |
- Where permissible FSI is less than 1.0
- On plots falling within 50 m on roads on which no new shops are permitted, particularly as prescribed in Sub-regulation (2) of Regulation 52 of 1991 DCRs
- In the island city and the following non-receiving corridors: (a) Western Corridor – between tracks of Western Railway and S V Road and between tracks of Western Railway and Western Express Highway (b) Eastern Corridor – between the tracks of Central Railway and LBS Marg.
- In the Coastal Regulation Zone as defined by the Ministry of Environment and Forests
- On plots located in M Ward, except TDR generated from M Ward and slum TDR generated elsewhere
- In the No Development Zone (NDZ) and Tourism Development Zone (TDZ) and in those areas where either MMRDA or MHADA is the special planning authority
- On plots for housing schemes of slum dwellers for additional FSI is permissible under sub-regulation (7), (9)and (10) of Regulation 33
- In areas having any development prohibition or restrictions imposed by any notification issued under the provisions of any Central/State Act or the regulations
- The receiving and sending areas need to be identified on the municipal plan itself as it has been done in Bangalore so that the information uncertainty does not arise. The recent amendments in Mumbai have removed the earlier definition of North bound TDR flow and linked it to parameters like related to infrastructure capacity in terms of road width. It does not relate to current development patterns. In fact, development patterns and intensities can be well checked through a good design of TDR. Delineation of the zones lacking in infrastructure and development parameters shall be done for a better utilisation of the TDR.
- The trade aspect of the TDR needs to be well thought and mechanisms for making these transactions fair, open, clear and transparent have to be sought. They also need to maintain the database on TDR utilisation very well and should be able to trace the patterns so that the TDR design can be modified to suit the future needs.
- TDR utilisation potential is higher along the mass transportation corridors such as railway lines and highways but these areas are exempted from TDR loading. Therefore, the development potential of this zone goes unutilised.
- There needs to be clarity on the tax treatment of TDR, especially through treatment of it as goods or service tax and the various local taxes that it could be subject to. These issues will also have to be resolved beforehand.
