Premium on extra space in FSI may be legalised

The state government is planning to amend the Maharashtra Regional Town Planning (MRTP) Act, 1966, to legalise the premium the municipal corporation charged builders for excluding areas used to build the staircase and the lift-well while calculating the Floor Space Index (FSI) of a project.

The state government is planning to amend the Maharashtra Regional Town Planning (MRTP) Act, 1966, to legalise the premium the municipal corporation charged builders for excluding areas used to build the staircase and the lift-well while calculating the Floor Space Index (FSI) of a project.

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A Bombay High Court order earlier this month quashed the 19-year-old practice saying there was no provision of a ‘premium’ in the Act. The Brihanmumbai Municipal Corporation (BMC) earns an average of Rs 200 crore annually as premium from developers who wish to exclude area covered by the staircase, passages and elevators while calculating the FSI. This exclusion ensures that builders get more area to build on.

The FSI determines how high a building can be built. The premium is charged at 25 per cent of the Ready Reckoner rates. The court had on June 11, barred the BMC from collecting this premium.

“We will amend the MRTP act to include a provision for collecting premium on making these areas FSI-free with retrospective effect,” T.C. Benjamin, principal secretary, Urban Development, told HT.

The state’s legal department is studying the HC order.

A senior official from the BMC’s Development Plan department said, “The point of charging a premium was that we need extra funds to provide infrastructure to the project. The developer will sell the extra area he gets at exorbitant rates.”
The BMC ruled out any immediate refund of premium collected from developers.