Maharashtra amends Act to legalise premium on extra floor space index

The Maharashtra government today decided to amend the Maharashtra Regional Town Planning Act to legalise premium on additional floor space index (FSI). FSI is the ratio of the total floor area of buildings on a certain location to the area of the location.

This would help the state government earn Rs 1,000 crore annually through premium charged on FSI.

A state government release said the Cabinet had given its nod for the issuance of an ordinance in this regard after seeking approval of the governor. In June, the Bombay High Court had ruled against charging any premium for additional FSI. About 50 per cent of the premium fees — levied on extra FSI, in addition to the base FSI of 1.33 (island city) and 1 (suburbs) given to a construction project — is given to the civic body, while the rest goes to the government fund.

The premiums have not been used for any specific purpose, but the government now wants to use these funds to provide civic amenities and upgrade infrastructure.

Sunil Mantri, president of Maharashtra Chamber of Housing Industry, told Business Standard: “I hope more than 600 pending proposals at the BrihanMumbai Municipal Corpporation will get cleared. This will help in resolving the stalemate due to the high court order.”