NASHIK: The civic body has made it mandatory for developers to use premium floor space index (FSI) and transfer of development rights (TDR) in an equal 50:50 ratio for all construction projects under the 2020 Development Control and Promotion Regulations, in a move aimed at reviving shrinking demand for TDR and ensuring fair compensation for landowners. The order was issued by municipal commissioner Manisha Khatri.
The decision follows a decline in TDR rates in recent years, which has led to dissatisfaction among landowners and slowed the acquisition of land reserved for public amenities in the city’s development plan. Under the TDR mechanism, landowners surrender their land to the civic body and receive TDR as compensation. However, as developers increasingly prefer premium FSI over TDR, demand for TDR has dipped sharply , and its market value has fallen.
This discourages landowners, particularly farmers, from handing over land required for civic projects against TDR, and they instead prefer cash compensation.
Nashik‘s basic permissible FSI is 1.10, but additional FSI can be availed through premium FSI and TDR, depending on road width and project category. Builders had largely shifted to using only premium FSI due to its predictable cost pattern and ease of availability. This trend affected the TDR market and created hurdles for Nashik Municipal Corporation (NMC) in acquiring land for over 400 pending reservations.
Under the new guidelines, developers must now load half of the additional FSI through premium FSI and the remaining half using TDR. According to NMC officials, the equal distribution significantly boosts demand for TDR, helps stabilise rates and encourages landowners to part with their land in exchange for TDR.
Nashik’s Development Plan, approved in 2017, included 540 reservations for public utilities such as parks, playgrounds, hospitals, roads and other infrastructure. Of these, 425 reservations remained unacquired, posing a fiscal challenge.
Under the 2013 land acquisition law, NMC must compensate landowners at twice the market value, an expense that officials estimated would exceed Rs 5,000 crore, which they said is beyond the civic body’s financial capacity.
By reinforcing the use of TDR alongside premium FSI, NMC aims to reduce its financial burden while ensuring faster implementation of Development Plan-related projects. Officials believed the revised rule created a healthier, more balanced development ecosystem, benefiting civic planning, landowners and the real estate sector alike.
