The Urban Development Department, through a Government Resolution dated June 5, 2026, has sanctioned funds for acquiring 191.21 acres of land within the Nashik Municipal Corporation area. This land is reserved for the construction of temporary religious settlements that host saints, akhadas, and devotees during the Kumbh Mela.

The Simhastha Kumbh Mela, one of the largest religious gatherings in the world, attracts lakhs of pilgrims from across India and abroad. To accommodate religious leaders and ensure smooth event management, the government plans to expand the Sadhu Gram infrastructure in the Tapovan area.

Out of the total reserved 377 acres for Sadhu Gram and related uses, around 94 acres have already been acquired. The remaining land is now being procured through negotiated purchase based on market-linked compensation rates approved at the district level.

The approved ₹2267 crore includes ₹2264 crore for land compensation and ₹3 crore for administrative expenses. The government has clarified that this is a one-time financial sanction, and no additional funds will be provided even if project costs increase later.

Strict conditions have been imposed, including:

• Immediate payment to landowners via RTGS after finalizing compensation
• Mandatory adherence to land acquisition laws and procedures
• Accountability of Nashik Municipal Corporation and District Collector for timely possession
• Prohibition on diversion of funds for any other purpose
• Mandatory submission of utilization certificates and financial reports

Impact on the Common Man

For local residents and landowners, this decision has direct financial implications. Those whose land falls under the acquisition zone are likely to receive compensation at negotiated market rates, potentially benefiting from higher payouts compared to older acquisition methods.

However, affected landowners may also face displacement, making rehabilitation and proper compensation crucial.

For the general public and pilgrims, the move is expected to significantly improve infrastructure, crowd management, and overall experience during the Kumbh Mela. Better planning of Sadhu Gram can reduce congestion, improve sanitation, and enhance safety.

At a broader level, the decision signals the government’s intent to avoid last-minute preparations and ensure timely execution of mega religious events, which often face criticism for delays and cost overruns.

With clear funding, accountability, and timelines in place, the Nashik Kumbh Mela 2027 is expected to see more organized and efficient planning compared to previous editions.

Also Read: Ranbir Kapoor Buys ₹3.31 Crore Land in Ayodhya’s ‘The Sarayu’

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What Is Gairan Land?

Gairan land refers to village common grazing land — pasture traditionally reserved for the free use of village cattle under the Maharashtra Land Revenue Code, 1966. These lands were historically off-limits for any alternative use. Over decades, however, rapid urbanisation has brought large tracts of such land within the jurisdictions of Municipal Corporations and Municipal Councils, where they have often remained in legal limbo — neither actively used for grazing nor formally available for civic development.

The Key Change

The amendment inserts a new Sub-section (8) into Section 22A of the Code. In plain terms, it allows Gairan land located within a Municipal Corporation or Municipal Council area — where a final Development Plan has already been notified under the Maharashtra Regional and Town Planning Act, 1966 — to be used for the specific purposes designated for it in that Development Plan. Crucially, this can only happen with prior permission from the State Government.

Why This Amendment Was Needed

The move has been in the making for years. The Supreme Court, in Civil Appeal No. 1132/2011 (Jagpal Singh & Others vs. State of Punjab & Others), had flagged concerns about misuse of common grazing lands across India. Following those observations, Maharashtra issued guidelines in 2011 and amended Section 22A in 2017. More recently, the Bombay High Court’s observations in Writ Petition No. 3098/2021 (Santosh Madhukar Bhondve vs. State of Maharashtra) on September 12, 2024 brought renewed urgency. The 2026 amendment is the government’s legislative response — designed to provide a legal framework to utilise these urban pockets of Gairan land productively and in a planned manner.

What the GR Directs Field Officers to Do

The GR lays down four clear instructions for revenue officials across the state:

First, Gairan lands within Municipal Corporation or Municipal Council limits that are included in a final Development Plan are now eligible for use as per that plan. Second, such lands can only be put to the specific purpose for which they are reserved in the Development Plan — whether that be a school, road, garden, or housing — and no other. Third, prior State Government approval is mandatory before any such land is put to use. Fourth, once approval is granted, the District Collector must update the land records: the “Gairan” entry must be removed and the new designated purpose must be formally recorded.

Scale of the Issue

The amendment is significant given the sheer scale of Gairan land locked in legal uncertainty. According to an affidavit filed by the Maharashtra government before the Bombay High Court in 2022, there are over 2,22,153 illegal constructions on Gairan lands across the state, encroaching upon approximately 10,089 hectares. Separately, the state had identified 7,700 hectares of grazing land for potential diversion for public infrastructure projects statewide. Mumbai-specific figures, however, are not publicly disclosed and would require an RTI query to the relevant Collector’s office.

What It Means in Practice

For cities like Mumbai, Pune, Nagpur, and other Municipal Corporation areas, this amendment effectively creates a lawful pathway to develop land parcels that were previously stuck between their village-era classification and modern urban needs. A plot classified as Gairan but reserved for a public garden in the Development Plan, for instance, can now legally be developed as one — provided the State Government gives the nod.

Urban planners and civic bodies are expected to identify such parcels and initiate the approval process. Legal experts note, however, that the requirement of prior State Government permission adds an important safeguard against arbitrary diversion of these commons.

Also Read: 87 Land Deals for 1862+ Acres Closed in FY-23

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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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The decision marks a transition from a welfare-driven land allocation model to a more market-linked and revenue-focused framework.

What Has Changed?

Until now, local bodies such as municipal corporations, councils, and gram panchayats were allowed to obtain land from the Maharashtra State Farming Corporation free of cost for public purposes like:

• Village expansion (gaothan extension)
• Government housing schemes
• Solid waste management
• Water supply infrastructure

However, under the new Government Resolution, all such land allotments will now:

• Be priced as per Ready Reckoner rates
• Require formal government approval
• Be treated as monetised transactions instead of free transfers

Why the Government Took This Decision

The policy change comes after the state observed a surge in demand for free land allotments and the unintended consequences it created.

Rising Demand from Local Bodies

There has been a sharp increase in requests from gram panchayats and urban local bodies seeking land for various public infrastructure projects.

Shrinking Land Bank

Frequent free allocations led to a reduction in the land holdings of the Maharashtra State Farming Corporation, raising concerns about long-term availability of land assets.

Revenue Loss Concerns

Providing land free of cost meant the state was foregoing significant revenue. The new policy aims to:

• Preserve land value
• Generate financial returns for the state
• Ensure accountability in land usage

Key Features of the New Policy

• Land will be allotted to government and semi-government bodies
• Applicable to:
  • Municipal corporations
  • Municipal councils
  • Nagar panchayats
  • Gram panchayats
• Pricing will be based on Ready Reckoner (RR) rates
• Ensures transparent valuation and allocation process

Impact on Local Bodies and Development Projects

Higher Project Costs

Local authorities will now need to factor in land acquisition costs, which could increase the overall budget for public infrastructure projects.

More Efficient Land Use

By eliminating free access to land, the policy is expected to:

• Reduce unnecessary land demands
• Encourage optimal utilisation of land parcels

Financial Discipline

The move promotes:

• Better financial planning by local bodies
• Reduced dependency on state-supported land allocation

Impact on Real Estate and Land Markets

The decision is also expected to influence the broader real estate ecosystem:

• Establishes market-linked benchmarks for land valuation
• Prevents distortion caused by zero-cost land transfers
• Encourages structured and transparent land transactions

Policy Context

The decision is rooted in provisions of the Maharashtra Agricultural Land (Ceiling on Holdings) Act, 1961, along with amendments introduced in 2023 and earlier government resolutions in 2024.

The government reviewed the earlier policy after noting the high frequency of free land requests and their impact on public land resources.

Conclusion

With this move, Maharashtra has effectively signaled the end of free land allocation for public use, opting instead for a system that balances development needs with financial sustainability. While it may increase costs for local projects in the short term, the policy is expected to ensure better land governance, transparency, and long-term value creation.

Also Read: Bombay High Court Quashes SRA Land Acquisition in Mumbai, Upholds Landowner’s Preferential Right for Redevelopment

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The Maharashtra government has reconstituted a high-powered Cabinet Sub-Committee to decide on the allotment of MHADA-owned residential and non-residential land, strengthening political oversight over one of the state’s most sensitive real estate decisions.

The decision has been taken under Rule 16 of the Maharashtra Housing and Area Development (Disposal of Land) Regulations, 1982, which allows the state government to directly allot MHADA land by bypassing the authority’s regular processes such as lotteries or tenders.

What the new Government Resolution says

As per the Government Resolution (GR) dated 29 December 2025, all earlier orders related to the exercise of Rule 16 powers have been superseded. A newly constituted Cabinet Sub-Committee will now exclusively handle such land allotment decisions.

Importantly, the GR does not approve or allot any land. It only lays down the decision-making structure for future cases where the government chooses to invoke its special powers.

Why Rule 16 matters

Rule 16 is considered a special and exceptional provision. It empowers the state government to allocate MHADA land directly for specific purposes, including institutional, public interest, or policy-driven projects.

Because MHADA land—especially in cities like Mumbai—is extremely valuable, Rule 16 decisions have historically attracted public scrutiny and political controversy.

Who will decide MHADA land allotments now

The reconstituted Cabinet Sub-Committee will be chaired by the Deputy Chief Minister (Housing) and includes ministers handling Revenue, Urban Development, Law & Judiciary, and Finance.

Senior bureaucrats from the Housing, Urban Development, and Law departments, along with the Vice-Chairman and CEO of MHADA, will act as permanent invitees. The Housing Department Secretary will serve as the convener.

This structure ensures that both political and administrative leadership are involved in every such decision.

Shift towards tighter oversight

By routing Rule 16 land allotments through a multi-minister panel, the government appears to be moving towards greater centralisation and accountability in MHADA land decisions.

Real estate experts note that this could slow down discretionary allotments but may also reduce the risk of unilateral decisions in high-value urban land cases.

No immediate impact on homebuyers

The GR does not affect ongoing MHADA lotteries or housing schemes. Regular housing allocations will continue under existing rules. The Cabinet Sub-Committee’s role is limited to exceptional cases where the government directly intervenes.

Bigger implications for urban land policy

With land scarcity intensifying in Maharashtra’s major cities, the reconstitution of this committee signals the government’s intent to retain tight political control over strategic land parcels, especially those linked to redevelopment, public institutions, or special projects.

How frequently Rule 16 is used — and for what purposes — will now be closely watched.

Also Read: Corona Forces MHADA Winners To Return Shops

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The committee, announced through a government resolution (GR) dated 8 September 2025, was mandated by the High Court in its orders of June 30 and July 8, 2025, which criticised the state and municipal bodies for failing to provide a robust, long-term scientific plan for waste management despite years of litigation and warnings.

The court had stressed that the issues raised in the PIL “touch upon basic human rights” of citizens living around waste-dump sites and called for immediate, coordinated, structural action.

A Long-Running Battle Over Dumping Grounds Near Residential Areas

The PIL — filed originally over the Kanjurmarg landfill and its impact on surrounding neighbourhoods — had highlighted severe environmental and health risks caused by locating a massive dumping ground near residential zones. Over time, multiple related petitions on Mumbai’s broader solid-waste management failures, pollution, and the absence of scientifically managed landfills were clubbed with the case.

Petitioners, including the environmental group Vanashakti and local residents, argued that:

• Dumping grounds continue to operate dangerously close to inhabited areas
• Waste is often unmanaged, creating air and soil pollution
• The city lacks a long-term, scientifically approved plan for waste disposal
• Authorities had no consolidated blueprint for alternatives, despite thousands of tonnes of waste generated daily

In earlier hearings, the High Court had even struck down previous notifications related to the Kanjurmarg site after finding that large portions of the land were forest land, rendering earlier permissions invalid. This intensified pressure on the city and state to find lawful, safe disposal solutions.

The High Court’s Rebuke: “Where Is the Long-Term Plan?”

On June 30 and July 8 this year, the Bombay High Court delivered two significant orders:

• It said the state and BMC had failed to produce a comprehensive, scientific “Robust Blueprint” for long-term waste management
• It noted that existing dumping practices jeopardize public health
• It ordered the government to set up a high-level committee, headed by the Chief Secretary, to examine all aspects of landfill impact on habitation
• It directed the BMC to submit its “Robust Blueprint” to this committee for scrutiny and then to the Court

The bench also observed that issues raised in the PIL involve fundamental rights, and therefore require coordinated action across departments, not fragmented responses.

Government Forms Committee Headed by Chief Secretary

Responding to the court’s directive, the state has now formed a high-level panel comprising:

• Chief Secretary, Maharashtra – Chairperson
• Commissioner, Brihanmumbai Municipal Corporation (BMC) – Member
• Additional Chief Secretary, Urban Development (UD-2) – Member
• Deputy Secretary, UD-21 – Member-Secretary
• Other officers nominated by the Chairperson

The committee will:

• Study the “Robust Blueprint” submitted by the BMC
• Assess the environmental, health and urban-planning impact of dumping grounds situated close to residential areas
• Recommend actionable, legally compliant alternatives and timelines
• Submit its final proposals to the High Court

The GR also states that the panel will function under the supervision of the Deputy Chief Minister for Urban Development, indicating the political significance the state has now attached to the issue after judicial intervention.

Why This Matters

Mumbai generates thousands of tonnes of solid waste daily. With land scarcity, legal constraints, environmental norms and residential expansion, the question of where and how the city disposes waste is becoming a critical governance challenge.

This committee could determine:

• Whether existing dumping grounds need relocation
• Whether scientific waste-processing technologies are viable at scale
• How the city can comply with forest laws, environmental norms and court rulings
• What long-term land-use and waste-management models Mumbai must adopt

Its report will influence the future of waste-management planning for India’s financial capital — and may set precedents for other urban centres facing similar pressures.

Also Read: ₹169 Crore in Bribes, Illegal Buildings on Dumping Grounds, Gold & Farmhouses: How One IAS Officer Exploited Mumbai’s Real Estate Dreams

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CIDCO Managing Director Vijay Singhal said the project reflects Navi Mumbai’s evolution from a planned satellite city to a global-ready urban powerhouse. He noted that the upcoming arena is designed to spark a cultural and economic transformation, positioning Navi Mumbai as the epicentre of India’s next entertainment revolution.

Inspired by global icons such as Madison Square Garden in New York and The O₂ Arena in London, the proposed multi-purpose arena will set a new benchmark in India’s entertainment infrastructure. The venue will host large-scale concerts, international sports events, cultural festivals, and immersive productions, with a capacity of 20,000 seated and up to 25,000 standing attendees—making it one of the largest globally comparable indoor arenas in Asia.

Why Navi Mumbai? The City Is Ready for Global-Scale Entertainment

Navi Mumbai’s rapid infrastructural rise has made it an ideal host for a global entertainment hub:

• Atal Setu Trans-Harbour Link, high-speed rail corridors, and the Navi Mumbai Metro ensure smooth, fast regional connectivity.
• The Navi Mumbai International Airport (NMIA) will revolutionise international artist travel, event logistics, and media production.
• The Nerul Jetty will boost tourism, water transport, and film-shooting opportunities.
• Sports infrastructure such as the Centre of Excellence in Kharghar and the Kharghar Valley Golf Course adds to the city’s recreation ecosystem.
• Upcoming Medi City, Edu City, and Aero City projects reflect Navi Mumbai’s integrated model of future-ready urban development.

CIDCO has also collaborated with leading global and domestic industry experts to develop and operate the arena with international standards of design, acoustics, crowd management, and event delivery.

A Cultural & Economic Catalyst for India

Beyond being a venue, the project is expected to act as a major economic engine by creating large-scale employment, boosting tourism, enabling global entertainment inflows, and fostering local businesses including hospitality, retail, media, and event production.

With the tender process formally underway, CIDCO aims to transform Navi Mumbai into India’s capital for live entertainment, ushering in a new era of world-class global events and immersive audience experiences.

Also Read: CIDCO Lottery receives so far 10K applications

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The decision follows proposals submitted by the Deputy Municipal Commissioner (General Administration), Brihanmumbai Municipal Corporation (BMC) on October 10 and November 13, 2025. After reviewing the request, the State Government granted approval under Section 92(D)(D) of the Mumbai Municipal Corporation Act, 1888, which requires State sanction for long-term lease or freehold conversion of municipal land.

What the Approval Includes

1. Land Details

• Plot: CTS No. 12 (Part), F/North Ward, Sion
• Area: 7,658.33 sq.m.
• Type: Municipal land previously under leasehold category
• Converted to: Freehold
• Lessee: Vishva Hindu Parishad (VHP)
• Lease Period: 30 years starting June 25, 2025

2. Financial Terms

• Annual Ground Rent: ₹10,186 at the prevailing ready reckoner rate
• One-time Premium:
  25% of the freehold valuation — ₹9,72,56,500 to be paid to BMC by the allottee.

3. Use Restrictions

The land is affected by certain reservations under the Development Control and Promotion Regulations (DCPR) 2034.
Therefore:

• Only medical and educational activities are permitted.
• BMC must verify land-use compliance before issuing final approvals.
• Commissioner, BMC, will be responsible for ensuring legal and planning compliance.

4. Administrative Provisions

• All payments must follow BMC’s updated schedule of rates.
• The order is digitally signed and published on the State Government website under Code 202512041914100825.

Why This Matters

The Sion ward—one of Mumbai’s most densely populated zones—faces severe pressure on public infrastructure. Opening up land for institutional use, especially medical and educational, is seen as a step toward bridging civic gaps.
At the same time, transfer of municipal land to private organisations often triggers debate regarding transparency and prioritisation of public need. Given the size and location of the plot, this decision is likely to draw political and civic scrutiny.

Also Read: Govt to Allow Conversion of Leasehold Land to Freehold at 25% Above Ready Reckoner Rate

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Maharashtra Chief Minister Devendra Fadnavis is scheduled to inaugurate the foundation stone ceremony at 2 PM, setting in motion a massive rehabilitation and redevelopment effort that will directly impact nearly 17,000 slum dwellers.

A Project That’s Been Years in the Making

For years, the redevelopment of Mata Ramabai Ambedkar Nagar and Kamaraj Nagar remained stalled due to land ownership issues, eligibility verification, and administrative hurdles.

It was only through a Government Order issued on 21 September 2023 that the Mumbai Metropolitan Region Development Authority (MMRDA) was officially permitted to undertake the Slum Rehabilitation Scheme in joint venture with the Slum Rehabilitation Authority (SRA). This marked the first time in MMRDA’s 50-year history that the agency would act as a developer on a slum rehabilitation project.

The Scale: 31.82 Hectares, 17,000 Slum Dwellers

The redevelopment covers 31.82 hectares, strategically located along the Eastern Express Highway in Ghatkopar.
Key connectivity points include:

• 2.5 km from Ghatkopar Railway Station
• 4.8 km from Mumbai Airport
• 12 km from Bandra–Worli Sea Link
• 9.5 km from the Shivdi–Nhava Sheva Trans Harbour Link

Out of the total government land required, 15.63 hectares have already been transferred to MMRDA, enabling work to begin on-site.

What Residents Will Get

Each eligible slum dweller will receive a free 1 BHK unit of 300 sq. ft. carpet area, equipped with vitrified tile flooring, granite kitchen platforms, anodized windows, marble lobby flooring, and modern lifts.

Key Rehabilitation Features:

• Roads, drainage, water supply, playgrounds, and primary schools
• Solar panels and rainwater harvesting facilities
• Water and sewage treatment plants (WTP/STP)
• 10-year post-O.C. maintenance by the contractor
• Commercial spaces for local businesses to thrive

Additionally, ₹137.50 crore in advance rent has been paid to eligible residents to support them during the construction phase.

Phase 1: 4,345 Homes, ₹1,299 Crore Cost

The first phase will focus on the rehabilitation of 4,345 slum dwellers.

• Biometric surveys have been completed and eligibility lists published.
• Phase 1 tendering was completed on 30 September 2025, and the lowest bidder has been appointed.
• Construction will commence immediately after today’s inauguration.
• Estimated cost for rehabilitation buildings in Phase 1: ₹1,299 crore (excluding GST)
• Project completion timeline: 36 months

Work Done So Far (2023–2025)

• September 2023: Project officially launched jointly by MMRDA and SRA
• August 2024: Appointment of architects and PMC through work orders
• September 2024: CM handed rent cheques to slum dwellers
• 2023–2025: Land transferred, agreements executed, and 3,662 huts vacated for site clearance
• September 2025: Phase 1 contractor finalized

A Model for Future Urban Redevelopment

This project is more than just a housing scheme — it is designed as a model of sustainable, technologically advanced urban rehabilitation. With commercial hubs planned alongside residential towers, the scheme is expected to generate local employment and empower communities, especially women.

The Mata Ramabai Ambedkar Nagar redevelopment aligns with the government’s vision of a ‘Slum-Free Maharashtra’ and is expected to become a template for future large-scale rehabilitation projects in Mumbai.

Also Read: Supreme Court Clears Redevelopment of Bharat Nagar Slum in Bandra

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The Urban Development Department issued the notification on 22 September 2025, published in the Maharashtra Government Gazette. It modifies the existing framework under which developers were depositing the welfare and rehab corpus amounts in phases, often after selling part of the free-sale component.

This change is expected to plug financial leakages, ensure security of rehabilitation funds, and reduce delays in slum redevelopment schemes across Mumbai.

What the Old Rule Said

Previously, developers were required to pay ₹40,000 per tenement (or as decided by the Planning Authority) for the rehab component, including welfare hall and balwadi provisions.

This amount could be deposited over time—in line with the construction schedule approved by SRA—and sales of free-sale flats were allowed after partial payments.

This often led to situations where developers prioritized selling free-sale flats to raise working capital, delaying payments toward the rehabilitation corpus. In some cases, this resulted in rehab buildings getting stuck mid-way, leaving slum dwellers in limbo.

What the New Rule Mandates

Under the new policy, developers must now deposit the full welfare and rehabilitation corpus amount upfront—before obtaining building permission for the free-sale component.

The revised contribution structure is also linked to the height of the rehab building:

• Up to 70 m: ₹100,000 per tenement
• Above 70 m up to 120 m: ₹200,000 per tenement
• Above 120 m: ₹300,000 per tenement

Additionally, the building permission for the last 25% of the free-sale component will be granted only after the entire required amount is deposited with SRA.

This is a sharp increase from the earlier ₹40,000 per tenement base rate and removes the flexibility developers earlier had in staggering payments.

Why the Government Made This Change

According to the Urban Development Department, the move is in the public interest and is aimed at:

• Ensuring the financial security of slum rehabilitation components
• Preventing delays in rehab building construction due to non-payment
• Protecting slum dwellers, who are often the worst affected when projects stall
• Improving accountability in fund flow between developers and SRA

By collecting the corpus upfront, the state aims to create a more reliable financial cushion for executing the rehab component, which is often dependent on developer cash flows.

Impact on Developers and the Market

This policy will likely impact developer cash flows in the short term, as they will now need to tie up more upfront capital before launching free-sale flats.

However, industry experts say it could restore confidence in SRA schemes, speed up rehab construction timelines, and reduce disputes between developers, SRA, and beneficiaries.

For buyers of free-sale flats, this move adds an extra layer of security, ensuring that rehab obligations are financially secured before the sale of market units begins.

Also Read: Need for immediate changes to DC Rules: Hafeez Contractor

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