The compensation stems from revenue losses incurred by urban local bodies following the nationwide implementation of GST on July 1, 2017, which abolished entry taxes, octroi, local body taxes, and other levies that municipalities previously collected under Entry 52 of List II of the Seventh Schedule of the Indian Constitution.

Of the total sanctioned amount, certain deductions were made before disbursement. A sum of ₹3.44 crore was recovered from 25 municipal corporations toward the operation and maintenance of High Capacity Suction and Jetting Machines with Water Recycling Facility — equipment being provided to urban local bodies for the health and safety of workers who clean underground drainage and sewage collection systems. Additionally, ₹49.96 crore was deducted for outstanding payments to EESL (Energy Efficiency Services Limited) for LED street lighting for 15 municipal corporations, with dues pending up to November 2025. After these deductions, the net amount actually disbursed stands at ₹5,532.28 crore.

The Additional Secretary of the Urban Development Department has been designated as the Drawing and Disbursing Officer, responsible for drawing the full amount from the Pay and Accounts Officer in Mumbai and transferring it immediately to the respective municipal corporations and the Directorate of Municipal Administration.

Here is the breakdown of funds allocated to each municipal corporation for April and May 2026:

Nagpur has received ₹318.63 crore. Chandrapur has been allotted ₹12.62 crore. Amravati gets ₹23.27 crore. Akola receives ₹18.34 crore. Chhatrapati Sambhajinagar (formerly Aurangabad) has been allocated ₹78.12 crore. Parbhani receives ₹1.75 crore. Latur gets ₹1.38 crore. Nanded-Waghala has been allocated ₹22.48 crore. Nashik receives ₹269.54 crore. Malegaon gets ₹44.46 crore. Dhule receives ₹28.28 crore. Jalgaon gets ₹31.74 crore. Ahilyanagar (formerly Ahmednagar) receives ₹25.24 crore. Pune has been allocated ₹485.05 crore. Pimpri-Chinchwad receives ₹457.54 crore. Kolhapur gets ₹35.78 crore. Solapur receives ₹57.52 crore. Sangli has been allotted ₹43.16 crore. Mira-Bhayandar receives ₹58.40 crore. Vasai-Virar gets ₹94.16 crore. Bhiwandi-Nizampur receives ₹68.02 crore. Ulhasnagar gets ₹51.48 crore. Kalyan-Dombivli receives ₹59.82 crore. Thane has been allocated ₹221.52 crore. Navi Mumbai receives ₹316.28 crore. Panvel gets ₹90.42 crore. Brihanmumbai Municipal Corporation (BMC) has received the largest share at ₹2,587.55 crore. Jalna receives ₹10.86 crore. Ichalkaranji gets ₹18.82 crore.

The expenditure is being charged under Demand No. F-4, Major Head 3604, Sub-Head 0998 of the 2026–27 budget.

Also Read: CIDCO Puts 20 Plots Up for Auction in Navi Mumbai: Includes Bungalows and Warehouses for Lease

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What Were Smart City SPVs?

When the Centre launched the Smart City Mission, each selected city was required to set up a Special Purpose Vehicle — a separate company incorporated under the Companies Act — to plan, appraise, approve, and implement Smart City projects. These SPVs had their own Chairpersons, Boards of Directors, and Chief Executive Officers, typically drawn from senior IAS officers, functioning independently of the parent Municipal Corporation. Maharashtra had eight such SPVs operating across Nagpur, Nashik, Pune, Pimpri-Chinchwad, Thane, Kalyan-Dombivli, Solapur, and Aurangabad (Chhatrapati Sambhajinagar).

What the GR Orders

The GR is sweeping in its scope. It orders the following:

The Chairpersons and Directors of all eight Smart City SPVs are relieved of their positions, and their powers stand transferred to the respective Municipal Corporation Commissioners. The CEO role of each SPV is similarly handed over to the Municipal Commissioner or Additional Commissioner of the concerned corporation.

All contractual officers and employees working under the Smart City SPVs are to be relieved and their charge transferred to regular Municipal Corporation staff — with a compliance report to be submitted to the government by April 30, 2026.

After the transfer of SPV assets to the Municipal Corporation is complete, the CEOs of each Smart City SPV are directed to independently initiate the process of winding up the company incorporated under the Companies Act for the Smart City Mission.

Who Gets Charge of Which City

The GR names specific IAS officers as the new custodians of Smart City powers. For Nagpur, Commissioner Bipin Iyenkar takes over from MMRDA Commissioner Sanjay Mukherjee. In Nashik, Commissioner Manisha Khatri, who was already holding additional charge as SPV CEO, now formally holds full authority. Pune’s Smart City powers move to Commissioner Navalkinshore Ram, while Pimpri-Chinchwad’s go to Commissioner Vijay Suryavanshi. Thane’s Commissioner Saurabh Rao, Kalyan-Dombivli’s Commissioner Abhinav Goyal, Solapur’s Commissioner Sachin Ombale, and Chhatrapati Sambhajinagar’s Commissioner Amol Yedge round out the list.

Why Is This Happening?

The GR’s preamble is candid about the reasons. The Smart City Mission’s operational period ended some time ago, and the Centre has made clear that no further funds will flow for the mission beyond its concluded tenure. All Smart City projects were to be completed by December 2025 — a deadline set at a meeting on April 7, 2025, and communicated through an official memorandum. With the project pipeline wound down and central funding ceased, maintaining parallel institutional infrastructure in the form of standalone SPVs no longer serves any administrative purpose.

The Maharashtra government had already directed the transfer of SPV assets to Municipal Corporations through a letter dated March 27, 2025, and the current GR is the logical follow-through — dismantling the human resource and governance layer of the SPVs as well.

The Larger Picture

The Smart City Mission, launched by the Centre in 2015, was one of India’s most ambitious urban transformation programmes, injecting funds into 100 selected cities for infrastructure, technology, and governance upgrades. Maharashtra had eight cities selected under the mission. However, the programme has faced sustained criticism for delays, incomplete projects, and the creation of parallel bureaucratic structures that sometimes operated at cross-purposes with the parent Municipal Corporations.

By merging Smart City powers back into the Municipal Commissioners’ offices, the Maharashtra government is signalling a consolidation of urban governance — streamlining accountability and reducing institutional duplication. The move also means that any pending Smart City works or assets will now fall squarely under the Municipal Corporation’s responsibility, with no separate body to either credit or blame.

Also Read: Shutdown Impacts Renovation & Interior Work In City

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Mumbai, 23rd January 2025: Net absorption of commercial office space across India’s top six markets is projected to exceed 60 million square feet (msf) in FY2026, the highest ever, according to a report by ICRA. The cities—Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai Metropolitan Region (MMR), and Pune—are expected to achieve a 3-4% increase in absorption over FY2025’s estimated 59-60 msf.

Despite a surge in new office space supply of 125-130 msf across FY2025 and FY2026, vacancy levels are anticipated to decline to 14-14.5% by March 2026, marking a multi-year low. This trend is driven by robust demand from global capability centers (GCCs), domestic corporates, increased physical occupancy in offices, and revival in IT-SEZ spaces due to regulatory changes.

“Leasing activity has remained resilient, with net absorption reaching approximately 54 msf in FY2024 and 44 msf during the first nine months of FY2025. Vacancy levels dropped by 70 basis points to 14.7% as of December 2024, compared to March 2024. By March 2026, occupancies in the top six markets are expected to reach a decade-high of 85.5-86%,” said Anupama Reddy, Vice President and Co-Group Head – Corporate Ratings, ICRA.

India’s Office Market Resilient Amid Global Slowdown

The Indian office market has defied global economic sluggishness due to its cost-effective, highly skilled workforce, a growing domestic economy, and competitive rental prices. These factors continue to attract global firms, strengthening India’s position as a preferred real estate investment destination.

ICRA expects the credit profiles of office space operators to remain stable, supported by an increase in net operating income (NOI). The debt-to-NOI ratio for operators is forecasted to improve to 3.9-4x by March 2026, compared to 4.3-4.4x by March 2025. Debt service coverage ratios (DSCR) are projected to rise to 1.45-1.5x in FY2026 from 1.35x in FY2025.

Retail Malls See Growth Amid Challenges

Retail mall operators are also expected to witness growth, with rental income projected to increase by 7-8% year-on-year in FY2025 and 8-9% in FY2026. New mall supply of 9-9.5 msf each year in FY2025 and FY2026 is expected to stabilize vacancy levels at 21% as of December 2024 and maintain occupancy rates of 79-80% through March 2026.

“Retail consumption growth is expected to moderate to 6-7% in FY2025 due to the General Elections, weather disruptions, and the impact of extended monsoons. However, a rebound is anticipated in H2 FY2025, driven by the festive and wedding seasons. Segments such as food, apparel, accessories, and hypermarkets will continue to drive growth,” added Reddy.

Despite the positive outlook, challenges persist for retail mall operators, including the growing competition from e-commerce and q-commerce platforms, which are increasingly impacting even premium brands in the fashion segment.

ICRA estimates the debt-to-NOI ratio for mall operators to improve to 4.2-4.5x by March 2026 from 4.6-4.8x in March 2025, driven by rising NOI levels. DSCR is expected to remain stable at 1.45-1.5x during FY2025-FY2026, indicating a healthy financial outlook for the sector.

Conclusion

The sustained growth in India’s office and retail real estate markets underscores the country’s resilience and potential as a global investment hub, driven by its robust economic fundamentals and growing demand for quality commercial spaces.

Bengaluru office demandAlso Read:

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A decade of infrastructure expansion in India, led by expressway development, has transformed connectivity and reshaped real estate opportunities across the country. Colliers India, in its latest report titled “Top 30 Emerging Cities of India”, has identified Nagpur, Jaipur, and Lucknow as the top three performers among 30 emerging cities assessed for growth potential in infrastructure, demographics, and economic factors.

Nagpur, backed by the Mumbai–Nagpur Expressway (Samruddhi Mahamarg), ranked first, followed by Jaipur and Lucknow. These cities, along with five other micro-markets—Ahmedabad (Shela), Agra (Shastripuram), Meerut (Ganga Nagar), Chandigarh (Kharar), and Bhopal (Indus Towne)—have shown significant potential for land price appreciation, with some areas expected to witness a 5.2x increase by 2035.

Expressways: Key Drivers of Growth

The rapid expansion of India’s expressway network, under initiatives such as the Bharatmala Pariyojana, has been instrumental in unlocking the economic and real estate potential of underdeveloped regions. Expressways such as the Samruddhi Mahamarg, Yamuna Expressway, and Dwarka Expressway have catalyzed urbanization by improving connectivity, fostering integrated township development, and boosting tourism.

“Expressways drive urban and economic growth by enhancing accessibility, which, in turn, increases demand for real estate. Investors and homebuyers should capitalize on the current opportunities in micro-markets along these expressways, where land values are projected to grow significantly,” said Swapnil Anil, Managing Director, Advisory Services, Colliers India.

Nagpur: A Rising Investment Hub

The 701-km Samruddhi Mahamarg has positioned Nagpur as a premier investment destination, with land prices around the Samruddhi Circle area projected to rise from INR 3,300 per sq. ft. in 2024 to INR 17,213 per sq. ft. by 2035—a 5.2x increase. This rapid growth outpaces other emerging micro-markets, including Shela in Ahmedabad and Shastripuram in Agra.

Key Micro-Market Land Price Projections

This report underscores the growing influence of expressway connectivity in shaping India’s real estate landscape and highlights emerging cities as lucrative investment opportunities for the next decade.

Also Read: Mumbai Nagpur Expressway

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Currently, open houses are held weekly at the MahaRERA head office in Mumbai, where senior officials address queries from developers. Despite assistance from Self-Regulatory Organisations (SROs), developers often encounter challenges that require clarification. Responding to requests from developers in other regions, MahaRERA has decided to extend this initiative to Nagpur and Pune.

During these open houses, officials from financial, legal, and technical departments will provide on-the-spot resolutions to issues related to project registration. Developers are encouraged to attend with all necessary documents to ensure a smooth process.

To further facilitate registrations, MahaRERA recently reduced the minimum project requirement for forming SROs outside the Mumbai Metropolitan Region (MMR) from 500 to 200. This decision is expected to simplify the registration process for developers across Maharashtra.

As per the Real Estate (Regulation and Development) Act, 2016, housing projects cannot be advertised or sold without RERA registration. MahaRERA has emphasized the importance of submitting complete and accurate information during registration to expedite the process.

“The Real Estate (Regulation and Development) Act, 2016, clearly states that housing projects must be registered with RERA before advertising. MahaRERA has established a robust framework for legal, financial, and technical aspects of project registration. By extending open houses to Nagpur and Pune, we aim to make the process seamless for developers,” said the MahaRERA chairman.

Developers are urged to utilize this opportunity to address any issues and ensure compliance with RERA regulations.

Also Read: builder fined by MahaRERA

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Mapping property related trends across these five tier 2 cities, the report highlights that Nagpur (49%), Coimbatore (27%), Bhubaneswar (12%) observed the highest YoY growth for residential demand and     Nagpur (84%), Coimbatore (30%), and Indore (6%) exhibited the highest YoY growth for rental demand (searches). 

Elaborating on the trends, Sudhir Pai, CEO, Magicbricks, said, “Covid-19 was a watershed moment for real estate, especially for tier 2 cities that have emerged as real estate growth engines. Additionally, government initiatives like AMRUT and the Smart Cities Mission have helped these cities evolve into new economic hubs. With an uptick in economic activity and employment opportunities, we expect tier 2 cities to gain more momentum as prime residential markets in the coming months.”

The report also observes that Indian MNCs such as Infosys and TCS are present in 80% of these cities while foreign MNCs such as IBM are present in almost 60% of these cities, with further expansion plans. 

Market-specific takeaways from Magicbricks’ Emerging Cities Report Q2, 2022:

1. In Bhubaneswar, the residential demand increased 5% QoQ and 12% YoY, while the rental demand declined 15% QoQ. 37.7% of the customers preferred homes between 1000-1500 sf.

2. Residential demand in Coimbatore grew 12% QoQ and 27% YoY, while rental demand increased 11% QoQ and 30% YoY. As per the report, 43% of homebuyers prefer the 2 BHK configuration, 39% of homebuyers are searching for properties priced between INR 25-50 lakh, followed by 23% in the INR 50-75 lakh range.

3.In Jaipur, the aggregate demand for residential properties increased 5% YoY while the rental demand grew 17% YoY. The demand for 3 BHK configurations constituted 57% and majority (35%) of the homebuyers preferred units in the 1,000-1,500 sf bracket.

4. Residential demand in Nagpur grew 25% QoQ and 49% YoY,  while the rental demand increased 84% YoY. There was a preference for 2 BHKs, constituting 44% of the total residential demand and 45% of the  homebuyers preferred properties in the size bracket of 1,000-1,500  sf. 

5. Residential demand in Indore increased 12% QoQ and 2% YoY, while the rental demand increased 6% YoY.The report observed that 42.5% of homebuyers preferred 3 BHK units and 22% of homebuyers keen to opt for units in the size range of 1,000-1,500 sf. 

Also Read: Q3 2022 Housing Sales Up 4% Q-o-Q Across Top 7 Cities, 41% Jump Annually

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