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The amended DCR introducing a compensatory FSI in form of Fungible FSI in early 2012, has been proved a golden goose for BMC and has laid dear eggs worth Rs 1,500 crore in little over a year by charging builders a premium for utilizing Compensatory Floor Space Index (FSI). FSI defines how much can be built on a plot.

The premium paid by the Developers Fungible FSI in redevelopment projects, has become a major source of additional income for BMC. Within a year, it has become the third highest revenue earner after Octroi and Property Tax. It is learnt that BMC will utilize this amount to supplement Mumbai’s overall infrastructure.

It is now widely known that the amended DCRs permits Developers to build 35% additional area for residential buildings and 20% additional area for commercial projects by paying premium to be paid to the BMC. These extra areas were earlier manipulated and misused by majority of unscrupulous Developers who clandestinely and shrewdly sold them to the innocent flat buyers as part of the flat. In 2011, with an intention to arrest such deceiving and misleading attitude of Developers while selling of flats, a new policy was framed to ensure that Developers pay a premium for utilizing these spaces in a flat.

In western belt of suburbs, the Developers collectively paid app. Rs 750 Crore as premium on Fungible FSI till last month. Developers in the eastern belt of suburbs paid an equal premium of app. Rs 750 Crore including the premium revenue from island city and redeveloping the slums.

However, though the premium collection is unique, it may not last in case of slump in the property market as the premium earned so far, is from major projects of redevelopment which are on-going. Shortly, the realty market may face a down-turn and many Developers may not opt for the extra FSI immediately to offer.

With an objective to streamline the non-transparent and highly corrupt building approvals system, the new amendments were recommended in 2011 and were made effective from 6th Jan. 2012. These modifications now curtail the discretionary powers of Municipal Commissioner to grant building concessions to the Developers as against the earlier system, the Municipal Commissioner used to generously clear the projects with unusually large flower beds which is evident today in thousands of buildings, voids, lily ponds and car decks mainly in suburbs. These areas were not included in the building’s FSI.

These concessions were allowed to the Developers to build an additional 50% to 80% area above the permitted built-up area i.e. free of FSI. These tricksters then would sell these spaces to flat buyers at market rate and then encourage them to illegally integrate these free of FSI areas to make the flat spacious.

Builders operating in the Bandra-Khar-Juhu belt had been making huge profits by manipulating building concessions granted to them by successive Municipal Commissioners.

The corrupt plans approval system is still prevalent. Earlier, the sanctioning authorities at Building Proposal Depts. used to demand a fixed rate per sq. ft as passing charges. Now, they ask for a lump sum amount as said by a Developer.

We append below, a comprehensive list of items counted in FSI Calculations in New DCR in Mumbai:
Under DCR Regulation No. 35(3), the following shall be counted in FSI.

i) Covered parking spaces as provided under DC Regulation No. 36 (5) (e).
ii) Area of fire escape balcony as provided in DC Regulation 44 (5).
iii) Area of sanitary block for the use of domestic servants engaged in the premises, other than at staircase mid-landing level, stilt level, parking level.
iv) Part/Pocket/Covered Terraces, for whatever purpose, except open terrace above the top most storey and the part terrace at top most storey due to planning constraints but accessible from common staircase.
v) Area below open to sky swimming pool, clearance exceeding 1.5 meters from floor level.
vi) Air condition plant room/Air handling unit room, meter room, DG set room except provided in basement.
vii) Fire checks floor/service floor of height exceeding 1.8 meters.
viii) Area of balconies a provided in sub regulation 22 of DC Regulation 38.
ix) Niches below window sill.
x) Area of one public telephone booth and one telephone exchange (PABX) room per building.
xi) The ornamental projection including the voids, flower beds, etc. projecting from the face of the building except at the terrace level.
xii) Ornamental projection, flower bed etc. over a balcony or gallery.
xiii) Area of one room for installation of telephone concentrators as per requirements of Mahanagar Telephone Nigam Limited.
xiv) Area of a separate letter box room on the ground floor of residential and commercial buildings.
xv) Covered areas required on top terrace for antenna/dish antenna/communication tower used for Telecom (Basic Cellular Or Satellite Telephone) or ITE purposes, V-Sat, Routes, Transponders or similar IT related structure or equipment in excess of 20.00 sq. meters.
xvi) The parking floor in excess of required parking under these DC Regulations [35 (2) (VI)]. Deck parking inclusive of car lifts and passages thereto on habitable floors.
xvii) Driver’s room/sanitary block on podium and or parking floor.
xviii) Covered swimming pool.

The following new DC Regulation 35(4) added.

DC Regulation 35(4):Compensatory Floor Space Index (Fungible FSI):-
Notwithstanding anything contained in the DC Regulations 32, 33 & 34, the Commissioner may, by special permission, permit Fungible Compensatory Floor Space Index, not exceeding 35% for Residential Development and 20% for Industrial or Commercial Development, over and above admissible Floor Space Index by charging a premium at the rate of 60%, 80% and 100% of the Stamp Duty Ready Reckoner Rate for Residential, Industrial and Commercial Development.

Provided in case of redevelopment under DC Regulation 33 (7), 33 (9) & 33 (10) excluding clause no. 3.11 of Appendix-IV of Development Control Regulation 1991, the Fungible Compensatory FSI admissible on rehabilitation component shall be granted without charging premium.

Provided further that redevelopment under DC Regulation 33 (5) and redevelopment proposal of existing buildings in suburbs and extended suburbs by availing TDR, the Fungible Compensatory FSI advisable on FSI consumed in existing structure shall be granted without charging premium.

However, such Fungible Compensatory FSI for rehabilitation component shall not be used as free sale component and shall be used to give additional area over and above the eligible area to the existing tenants/occupants. Provided, that this regulation shall be applicable in respect of the buildings to be constructed or reconstructed only.

Explanatory Note:-

i) Where IOD/IOA has been granted but building is not completed, this Regulation shall apply only at the option of Owner/Developer,
ii) For plots/layouts where IOD is granted for partial development, this Regulation will apply for the balance potential of the plot,
iii) The Fungible FSI is usable as Regular FSI,

Provided, further, the development in Coastal Regulation Zone (CRZ) areas shall be governed by the Ministry of Environment & Forests Notification issued from time to time.