Mumbai’s former textile mill workers have waited for decades for something that many families regard as a basic promise: a home in the city whose economy they helped build. While the mills that once defined central Mumbai have largely given way to luxury housing, shopping centres and commercial towers, the housing programme for their workers has struggled to deliver homes at anything close to the scale required.

The Maharashtra government’s October 19, 2026, Government Resolution (GR) offers a fresh attempt to break the impasse. It reduces the minimum land requirement for specified private developers from 30 acres to one acre, increases permissible Floor Space Index (FSI) on residential land from 2.5 to 3, and introduces a route for MHADA to seek ready-to-occupy homes from developers.

The changes could make it easier to identify land, improve the financial feasibility of new construction and procure completed flats instead of waiting for fresh projects to be built. But the central question remains: will the new rules persuade developers to supply homes at a price the government can afford and mill workers can access?

For the families who have waited through successive governments, housing policies and changes to development regulations, the GR may offer a small ray of hope. It is not, however, an allotment order or a guarantee that homes will be delivered immediately.

The 1982 Strike That Changed Mumbai’s Textile Industry

Mumbai’s textile mills were once central to the city’s economy and social life. The area stretching through Parel, Lalbaug, Byculla, Worli, Sewri and adjoining neighbourhoods became known as Girangaon, or the village of mills. The mills provided employment to a large workforce and shaped the surrounding neighbourhoods, including their chawls, markets, social institutions and cultural traditions.

The scale of the industry was enormous. Historical accounts estimate that around 2.5 lakh workers were employed in Mumbai’s textile mills before the major industrial decline. On January 18, 1982, approximately 2.5 lakh workers went on strike under trade union leader Datta Samant. The strike, which began over wages, bonuses and service conditions, lasted around 18 months.

The consequences extended far beyond the dispute over wages. The strike failed to secure the workers’ demands, while the textile industry was already facing structural pressures, changing production practices and competition from powerloom centres outside the city.

According to a historical account published across the spectrum, around 91,251 mill workers were laid off following the strike. As mills became sick or closed, thousands of families lost their principal source of income.

The eventual closure of the mills also created a major question over the future of the land they occupied. These were not ordinary industrial plots: many were large parcels in what would become some of Mumbai’s most valuable real estate locations.

What Happened to Mumbai’s Mill Land?

In 1991, Maharashtra introduced Development Control Regulation 58 (DCR 58), which permitted redevelopment of mill lands subject to conditions. The original framework became widely associated with a one-third formula: portions of mill land and development potential were intended for the mill owners, public open spaces through the municipal corporation, and public housing through MHADA.

The arrangement was meant to balance redevelopment with public benefits. It would allow obsolete industrial land to be put to new uses while ensuring that the city received open spaces and housing for sections of the population affected by industrial change.

However, the policy did not unfold as its public-housing promise suggested.

A significant change came in 2001, when the development regulations were amended so that the sharing formula was calculated on vacant or open land rather than treating the entire mill property in the same way. This substantially reduced the land available for public purposes compared with what many had expected from the original framework.

The consequences became visible as central Mumbai’s industrial landscape changed. Former mill premises were redeveloped into offices, malls, entertainment destinations and high-end residential projects. The redevelopment helped reshape the city’s commercial geography, but the delivery of housing for mill workers remained limited.

The Supreme Court examined disputes relating to DCR 58 and mill-land redevelopment in Bombay Dyeing & Manufacturing Company Ltd. v. Bombay Environmental Action Group, decided in March 2006. The controversy highlighted the competing interests involved: private redevelopment, environmental concerns, public open spaces and the need for public housing.

The result was a long-running disconnect between the commercial transformation of mill land and the slow delivery of homes to former workers.

Thousands of Homes Delivered, But the Waiting List Remains Large

The figures show the gap between the scale of the original promise and the number of homes delivered.

According to information published by the Maharashtra government, MHADA had constructed 13,453 homes on mill land, while 2,417 homes had been obtained through MMRDA. Together, 15,870 homes had been allotted to mill workers and their heirs.

The government’s March 2024 housing policy referred to 1,74,172 applications from workers and heirs associated with 58 sick or closed textile mills in Greater Mumbai.

By July 2025, a government statement reported that 98,619 workers and heirs had been declared eligible for homes following an eligibility-verification campaign. That figure is a more useful indicator of the group whose claims had been verified, although eligibility and actual allotment are separate steps.

The figures should be read carefully:

• 1,74,172: total applications submitted by mill workers and their heirs.
• 15,870: homes reported as allotted under the scheme.
• 98,619: applicants reported eligible by July 2025.
• Not yet housed: a large number of eligible applicants remained without an allotted home, although the precise current figure needs to be confirmed against the latest eligibility and allotment records.

The total number of applications cannot simply be treated as the number of people who will receive homes, because applications must meet the eligibility requirements and records can change. Nevertheless, the gap between the homes delivered and the number of eligible applicants is substantial.

For families who have waited since the closure of the mills, the passage of time has meant that some original workers have grown old or died, leaving legal heirs to continue the process.

Earlier Government Plans Did Not Deliver Homes at the Required Scale

The October 2026 GR is not the government’s first attempt to resolve the issue. Earlier measures sought to use mill land, government land and private developers to expand the supply of affordable homes.

The original mill-land approach

The 1991 development framework sought to link redevelopment of mill properties with public housing and open spaces. But subsequent changes to the rules, disputes over land and the pace of redevelopment reduced the expected public benefit.

The land that might have helped accommodate a large number of workers was increasingly absorbed into Mumbai’s commercial and residential real estate market.

The March 2024 policy: three routes to housing

The government’s March 15, 2024, GR proposed three models:

1. Construction by MHADA on government land.
2. Joint ventures with private landowners on approved layouts.
3. Construction by private developers on their approved layouts.

The policy aimed to provide homes to approximately one lakh eligible workers and heirs. It envisaged around 8,000 homes on government land in Thane and an estimated subsidy of ₹5,500 crore, shared among the Brihanmumbai Municipal Corporation, the Maharashtra Housing Fund and state budgetary provisions.

The prescribed cost of a home under these models was ₹15 lakh, of which the eligible beneficiary’s contribution was set at ₹9.5 lakh and the government subsidy at ₹5.5 lakh.

The state also selected two project promoters following an Expression of Interest process. The proposals identified in the government’s material covered large land parcels at Shelu in the Karjat area and Wangan in Thane, with a combined proposed capacity of more than 80,000 homes.

These were significant proposed numbers, but selecting project promoters and identifying capacity is not the same as completing and allotting homes. Construction requires suitable land, planning approvals, funding, infrastructure and the ability to deliver homes at the prescribed cost.

The new GR indicates that the government is still trying to make the existing policy more workable and expand the routes through which homes can be delivered.

Why Has the Scheme Been So Difficult to Implement?

The basic challenge is the mismatch between the cost of housing in the Mumbai region and the price at which the government wants to provide homes to mill workers.

The ₹15 lakh benchmark was set for a 300 sq ft home under the earlier policy, with a subsidy intended to bridge part of the cost. But constructing homes involves land, permissions, building costs, utilities, infrastructure and financing. The economics can become difficult if a developer must deliver a home at a price that does not cover the project’s costs.

This is where the interests of the government, beneficiaries and private developers may diverge.

A developer may be unwilling to supply a completed home at ₹15 lakh if the cost of land, construction and statutory compliance is higher. The applicable ready-reckoner rate may also be below the price the developer believes the property could command in the market. In those circumstances, a developer may decline to participate, seek different terms or prefer to sell the homes commercially.

That is a structural risk for the scheme, not proof that every developer has refused to cooperate. The GR itself does not name developers who have rejected the new offer or establish that all earlier delays were caused by builders. Land availability, project approvals, infrastructure, funding and policy design can also affect delivery.

But the problem is clear: the government can invite offers at a prescribed price, yet it cannot assume that a sufficient number of developers will find that price commercially acceptable. The success of the ready-home model will depend on whether developers actually submit viable offers and whether MHADA can procure the homes.

Nearly Two Lakh Unsold Homes in MMR: Can Some Be Used for Mill Workers?

The new GR’s ready-home provision becomes particularly significant when viewed against the region’s unsold housing inventory.

According to ANAROCK Research’s third-quarter 2026 data, the Mumbai Metropolitan Region had approximately 1,98,050 unsold residential units at the end of September. That was close to one-third of the unsold inventory across the seven major housing markets tracked by the firm.

This provides a potentially important opportunity. Rather than waiting for new construction, the government could explore whether a portion of the completed or otherwise suitable unsold housing stock can be procured for eligible mill workers.

However, there is an important distinction between unsold and ready to occupy. Unsold inventory includes homes at different stages of construction and does not mean every unit is completed, legally ready for occupation or available at the government’s prescribed price.

The new GR sets out a specific condition for the ready-home route: a project must have at least 100 ready homes, and the developer must be willing to supply them at the lower of ₹15 lakh per home or the applicable ready-reckoner rate. MHADA is to invite expressions of interest for this purpose.

The government would therefore need to identify projects that meet the conditions, assess their legal and construction status, and determine whether the homes are suitable for the intended beneficiaries. The overall unsold-stock figure cannot be treated as a pool of nearly two lakh homes available for purchase under this scheme.

Still, the scale of the inventory raises a reasonable question: if the government is able to find even a limited number of suitable completed homes at the prescribed price, could that provide a faster route to allotment than waiting for entirely new projects?

What Exactly Has Changed Under the October 19 GR?

The latest GR modifies the March 2024 policy in three important ways.

1. Minimum land requirement cut from 30 acres to one acre

For the specified private-development models, the earlier requirement of 30 acres has been reduced to a minimum of one acre. The developer must own the land or have the qualifying non-transferable instrument specified in the GR.

This could allow smaller land parcels to be considered and widen the pool of developers capable of participating. It may also make it easier to identify potential projects across the Mumbai Metropolitan Region.

However, a smaller minimum plot does not by itself guarantee that a project is feasible or that it will contain a large number of homes. Actual capacity will depend on planning conditions, the permitted layout and other applicable requirements.

2. Residential FSI raised from 2.5 to 3

The GR increases the permissible FSI for these projects on residential land from 2.5 to 3. It also specifies an FSI of 1 for green or non-development zones under this housing mechanism.

FSI determines how much floor area can be built relative to the size of a plot. Raising residential FSI from 2.5 to 3 allows 20% more floor area than the earlier limit, subject to applicable rules and restrictions.

For a developer, additional permissible floor area can improve the project’s ability to accommodate homes and may improve its financial feasibility. The provision for green or non-development zones also creates another route to consider land under the scheme, subject to the GR and the required approvals.

3. MHADA can seek offers for ready homes

This is arguably the most immediate part of the new policy.

MHADA will invite expressions of interest from developers in the MMR who have at least 100 ready homes and are willing to supply them at the lower of ₹15 lakh per home or the applicable ready-reckoner rate.

The advantage is that the government would not necessarily need to wait for construction to begin and finish before allotting every home under this route.

But the crucial words are ready homes and willing to supply. The GR does not identify a project from which homes have already been procured, specify the number of units that will be purchased, or announce an allotment date.

The Road Ahead: A Policy Change Is Not the Same as a Home

The latest GR attempts to address some of the barriers that have slowed the mill-worker housing programme. Smaller land requirements may widen participation; higher FSI may improve project viability; and procurement of ready homes could shorten the wait for some beneficiaries.

The policy’s real test will be implementation.

MHADA must invite offers, identify projects with at least 100 suitable ready homes, assess whether the prescribed prices are acceptable to developers, and complete the procurement process. For new construction, the authority will need to move beyond project selection and ensure that land, permissions, financing and construction timelines translate into actual homes.

The government must also publish clear information about how many eligible beneficiaries remain without homes, how many units are currently available for allotment, how many ready-home offers are received, and how many homes are finally procured and handed over.

The history of Mumbai’s mill lands makes this more than an ordinary housing scheme. A workforce that helped shape the city watched its former industrial neighbourhoods transform into some of the most valuable real estate in the country, while the promise of affordable housing moved through decades of changing regulations and government plans.

For the families still waiting, the October 2026 GR offers a small but meaningful possibility: that the government may finally use a combination of new construction and existing housing stock to move from policy announcements to actual allotments.

Whether that possibility becomes reality will be determined not by the number of acres or the FSI permitted on paper, but by the number of homes that MHADA can secure at the prescribed price—and the number of eligible workers and heirs who finally receive their keys.

Also Read: Mill Workers get 3,894 homes in Mumbai

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