WB seeks policy punch for Mumbai makeover

Relaxation in CRZ, NDZ and an increase in FSI recommended

The World Bank (WB) estimates that $ 50 billion can be easily attracted for Mumbai's modernisation, mostly from the private sector, if the Maharashtra government acts quickly to initiate reforms by repealing the Urban Land Ceiling Act (ULCA), rationalising the Rent Control Act (RCA) and permits a much higher floor space index (FSI) for commercial constructions(between five and 10) while increasing the fllor space index (FSI) for residential housing from 1.33 to 2.

A World Bank team that was in Mumbai has also suggested that the huge tracts of privately held mill lands, Bombay Port Trust (BPT) land, salt pan land, railway land besides the land holdings currently locked under the coastal regulation zone (CRZ) stipulations and no development zone (NDZ) laws be brought into the market.

This will not only result in checking skyrocketing real estate prices in the city but also lead to cheaper housing options becoming available for the general masses, the mission feels.

The seven-member World Bank mission that was in Mumbai since March 22 is currently in New Delhi for discussions with the central government on Mumbai's transformation into a world class city.

A senior central government official told Business Standard, "The mission in its report has recommended the elimination of the ULCA, rationalisation of the rent control regulation, rationalisation and an increase of the FSI in Mumbai, rationalisation of the taxes and user charges used to fund shelter-related services (property tax and stamp duty tax)."

He added that the mission felt that current laws and regulations in these areas, aimed at regulating and allocating real estate equitably in the market, was actually very pervasive and implemented by a flawed governance structure.

"The city no longer plays the catalytic role of development but actually boasts of the most expensive markets for real estate," the World Bank report said.

"The mission sought a study of the full costs of the policies that have resulted in so much valuable private land remaining off the market," the official said.

The mission asked the Maharashtra government to effectively rationalise stamp duties and introduce a policy to reorganise urban services, to be run by autonomous entities, by the end of April 2005.

According to the mission, Mumbai is expected to witness an additional influx of 38 lakh migrants between 2001 and 2021.

In order to cater to the housing demand that will be a direct consequence, the mission has sought a rationalised increase in the FSI stipulations in Mumbai.

While currently 1.33 is the permitted FSI for both residential and housing construction in the city, the bank has recommended a sharp increase of the FSI to 2 for housing purposes, and as much as between 5 and 10 for commercial property.

"To ensure that commuting is not encumbered as a result of increased FSI, the bank states that those residential property within a radius of one kilometer from railway stations be permitted an FSI of 2 for construction so that commuting is immediately at hand for the huge daily outflow from these residential complexes," the Union secretariat official said.

While commending the central business disctict (CBD) set up in the Bandra-Kurla Complex (BKC), the World Bank team strongly urged an increased FSI for the business district in the range of 5 to 10, in tune with global standards.

"In most developed cities of the world, the FSI is distinctly higher for commercial realty, unlike the uniform FSI for both residential and commercial realty observed in Mumbai," the official said.