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The Nashik Municipal Corporation (NMC) has imposed a regulatory requirement that developers must use premium Floor Space Index (FSI) and Transfer of Development Rights (TDR) in an equal 50:50 ratio for all construction projects governed by the city's 2020 Development Control and Promotion Regulations. The move, directed by municipal commissioner Manisha Khatri, is intended to revitalise waning demand for TDR, stabilise its market value and facilitate the city's acquisition of land earmarked for public amenities and infrastructure. Nashik's basic permissible FSI is 1.10, with additional FSI available through premium FSI and TDR, but heavy reliance on premium FSI had weakened the TDR market in recent years, reducing interest among landowners to surrender land in exchange for TDR. By enforcing parity between the two mechanisms, NMC aims to restore balance in the real estate development regime, address stalled land reservations and reduce the financial burden of cash compensation for land acquisition. Officials believe the equal mix will benefit civic planning, landowners and the realty sector by encouraging use of TDR alongside premium FSI.
The Nashik Municipal Corporation has implemented a significant amendment to its development regulations by requiring developers to utilise premium Floor Space Index (FSI) and Transfer of Development Rights (TDR) in equal measure for all construction projects under the city's 2020 Development Control and Promotion Regulations, municipal authorities said earlier this week. The directive, issued by municipal commissioner Manisha Khatri, seeks to address a pronounced slump in demand for TDR that has developed in recent years as developers increasingly opted for premium FSI due to its ready availability and predictable costs. Advertisement
Under Nashik's regulatory framework, the base permissible FSI for development is 1.10, and additional built-up area can be obtained through premium FSI and TDR based on factors such as road width and project category. However, developers preference for premium FSI had eroded active demand for TDR, resulting in a sharp drop in its market value and a reluctance among landowners to surrender land in exchange for TDR certificates. This situation, officials said, hindered the corporation's ability to acquire land reserved for public utilities, amenities and infrastructure under the city's development plan.
Land acquisition efforts stalled for more than 400 of the 540 reserved plots in Nashik's development plan, officials added, in part because many landowners preferred cash compensation over TDR, leaving important civic reservations unfulfilled. Compulsory cash payouts under the 2013 land acquisition law would substantially increase the civic body's fiscal burden, with estimates suggesting costs could exceed INR 5,000 crore a figure beyond the corporation's financial capacity.
To reinvigorate the TDR market and ensure a balanced approach to development, NMC's new rule mandates that half of the additional FSI obtained by a developer must be loaded through premium FSI and the remaining half through TDR. Municipal officials said that this parity is expected to boost demand for TDR, stabilise its valuation and entice landowners to participate in land surrender arrangements, thereby facilitating acquisition for public-use reservations.
The revised requirement is aimed at creating a more balanced development ecosystem that reduces overreliance on premium FSI, supports civic planning priorities and enhances the financial viability of land transactions across the city. Authorities believe that by strengthening the TDR mechanism and ensuring its consistent use alongside premium FSI, the city's development agenda will benefit landowners, developers and the broader real estate sector.
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