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The Chandigarh administration has excluded change of land use (CLU) permissions and conversion of industrial plots into commercial use from its ongoing reform agenda, citing feasibility and regulatory constraints. Officials indicated that fragmented land holdings, limited vacant land, and high infrastructure costs make CLU-based development impractical in the Union Territory. The move also aligns with restrictions under the Chandigarh Master Plan 2031 and the Periphery Control Act, 1952. Instead, the administration is prioritising alternative reforms, including higher floor area ratio (FAR), relaxed building norms, and mixed-use development in select industrial areas. The decision impacts long-standing demands from developers and industry stakeholders seeking greater flexibility in land use.
The Chandigarh administration has decided not to permit change of land use (CLU) in villages or allow conversion of industrial plots into commercial use as part of its ongoing urban reform framework, according to developments reported in the past week. Advertisement
Officials indicated that both proposals—long demanded by industry stakeholders and landowners—have been excluded from the current reform agenda after internal assessments concluded that they are not feasible under existing planning and infrastructure constraints.
The administration stated that Chandigarh’s villages lack large, contiguous land parcels required for planned CLU-based development. The fragmented nature of land holdings would significantly increase infrastructure costs, making such projects financially unviable.
Additionally, the limited availability of vacant land within the Union Territory has constrained the scope for large-scale land use conversion. Officials noted that in regions where CLU is permitted, larger land parcels enable integrated planning, a condition not present in Chandigarh.
From a regulatory standpoint, the decision is aligned with provisions under the Chandigarh Master Plan 2031 and the Periphery Control Act, 1952, both of which impose strict controls on land use changes in the city and its surrounding areas. The administration maintained that permitting conversion of industrial plots into commercial use would be inconsistent with the Master Plan framework.
The issue of industrial plot conversion has been a long-standing demand, particularly in Industrial Area Phases I and II, where several units have been informally used for retail and commercial activities. Authorities have issued notices in multiple cases of such misuse, highlighting enforcement challenges.
A previous policy introduced in 2005 had allowed limited conversion of industrial plots—typically above a specified size—into commercial use, enabling activities such as offices, shops, and hospitality establishments. However, officials clarified that the policy will not be revived under the current planning framework.
Instead of permitting fresh conversions, the administration is focusing on alternative regulatory reforms aimed at improving land utilisation and ease of doing business. These include proposals to increase floor area ratio (FAR) in industrial areas, relax building norms such as setbacks and ground coverage, and introduce mixed land use in the planned Industrial Area Phase III.
Other measures under consideration include leasehold-to-freehold conversion and streamlined approval processes to facilitate industrial and commercial activity within the existing regulatory structure.
The decision reflects a policy shift towards optimising existing land use rather than permitting fundamental changes in zoning. It also highlights the challenges faced by land-constrained urban centres like Chandigarh in balancing development demands with infrastructure capacity and statutory planning frameworks.
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