Should Mumbai Allow Higher FSI In Suburbs?

When compared to global cities such as London, Berlin and Paris, scarcity of land that India's financial capital Mumbai faces is much severe as it is built on a narrow peninsula. People from across the country migrate to the Maximum City looking for jobs which also makes Mumbai denser every year. While accommodating this ever-growing population remains a challenge, the city has stringent building-height restrictions in place.

For example, there are 21,000 people per square kilometre in Mumbai, while in London and Berlin, the population density is 5,432 and 4,000 people per square kilometre, respectively. The average floor space index (FSI) in Mumbai central is 1.33, much lower than other central areas of major cities across the world.

However, Maharashtra's urban development department recently decided to allow an additional FSI of the earlier 0.33, for a premium that developers are expected to pay. (FSI is the ratio of the area of floor to the area of plot on which a building stands.) The state government along with municipalities will share the revenues for allowing a higher FSI. The premium, the government will charge for additional FSI, would be Rs 3,000-5,000 per sq ft. Earlier, it was Rs 800-Rs 2,000 per sq ft. In a city where floor space is scarce, higher FSI would be a great boon for real estate developers as well as buyers. But, the proposal may be criticised on certain grounds.

When the government allows higher FSI to raise revenues, it may allow higher FSI in areas that are not served by proper infrastructure. Further, urban policy in Mumbai is largely intended to lower population density in central areas. To achieve this, Mumbai lowered the FSI in the central city, while the demand for floor space remained higher here as compared to its suburbs. 

Mumbai is the only major city in the world where the ratio of the highest residential FSI and the lowest residential FSI is 4. (The residential FSI in Mumbai's business district Bandra-Kurla Complex is 2, while the residential FSI in suburban Gorai is 0.5. This means a ratio is 2 between the highest and lowest residential FSI.) In New York, the ratio is as high as 30, because the highest residential FSI is 15 in the CBD, while it is 0.5 in suburbs. The low ratio between the highest and lowest FSI constrains real estate development in Mumbai as much as the near-uniform low FSI throughout the city. 

In the 2005 Mumbai floods, many people died because the existing infrastructure could not handle the higher FSI in areas it was allowed. This is why a system that allows a higher FSI by charging a premium is often criticised. This places greater pressure on the infrastructure of the city.