"We are fostering a culture of scarcity"

What would you say is Mumbai's biggest problem today?

Today if you ask anybody what is Mumbai's biggest problem, they will tell you that the city has no infrastruture, roads, drainage, water supply, medical facilities or ambience.

Then we talk about old buildngs and rent control. Flat prices here are out of reach of most ordinary people. Yet, we have the city's elite saying that we should not have any developments.

The crux of Mumbai's problems is that 55 percent of its people live in slums and do not pay taxes. Of the remaining 40 per cent, ten per cent live in old cessed buildings and pay very low taxes.

In south Mumbai, barring Peddar Road and Napeansea Road, areas like Girgaum, Mohammed Ali Road, Tardeo, Colaba are all old and virtually dilapidated buildings. The entire burden of development is falling on the 30 per cent who are paying taxes.

How can you expect them to foot the cost of the city's development? What will the city earn from?

Let's look at why people are staying in slums and old buildings. Today, if you want to buy a flat in Mumbai, you have to put aside 15-20 years of your income.

Because we have made a law that the city will only grant an FSI of 1.33, on the grounds that it is an island city and there is no infrastructure. Yet, we have a population of 16 million and more are coming in. Still we have people saying "no infrastructure, no development".

So people live in slums. We have develpoment, but those people are not paying taxes. This is the crux of the problem: We are fostering a market of scarcity.

What should be done to change that?

We have people saying Mumbai contributes 35 per cent of all taxes so the cnetral gobernment shoudl givethe city more. Delhi is not going to give us anything. A city cannot survive on begging. Nor can we go to the World Bank and ask for Rs 55,000 crore to put the city in order. The firstthing they will ask is 'How are you going to repay?' We don't have repayment plan.

Where is the monetary going to come from? That is your golden question. The golden answer is that the need for more housing is already there. So let us enhance the opportunities there.

In Mumbai, people want to go up because they can that is only way they can get a sea view. It is like having an an open air park in front of your house: You feel better. When there are no parks, people go for the sea view.

All the small restaurants in the Fort area have been sold to banks. All the hair cutting saloons have gone. Our streets are now filled with boys selling chinese food. But we still don't want to give extra FSI.

In New York, if the builder gives a restaurant on the ground floor of a building, sandwich corner and a hair cutting saloon, puts a park with benches, a water body and a sculpture, he gets extra FSI for all of these additions.

The basic FSI of 7or 8 can go up to 25 on the basis of these additions. Unless you give benefits for creating utilities, no builder is going to do anything for the city. It is not that our housing is expensive to build, it is the price of air.

What is this price of air?

In the city today, the price of housing is Rs 25,000 - Rs 30,000 a sqaure foot. The cost of construction is Rs 2000 sq ft, finance, etc., is Rs 500 sq ft and land is Rs 5000 sq ft. Today, the city gives an FSI of 1.33. If that is rasied to 10 with the additional 8.7 being sold by a real estate endowment trust to the builders.

The trust in turn plows the money back into the city's infrastructure. With this you will get development which is legal, money which can be plowed into the city. The endowment should be set up by the municpality, so that the money does not get dissipated in other schemes, it is used only for the city's infrastructure.

This FSI should be made availble only the builder commits to creating social infrastructure like low-cost housing, schools and hospitals. With a trust like this, you can create infrastructure for the city easily and quickly in 10-15 years.