August 07, 2015

Is Mumbai Development Plan 2034 flexible enough to meet urban demands aligned with economic prosperity?

Reuben Abraham and Vaidehi Tandel write about the Mumbai Development Plan 2034 in this Economic Times article.

You can read their unedited version below:


Many well-meaning citizens of the city have assumed that the Mumbai Development Plan(DP) – 2034 is fatally flawed, and needs to be dumped. The criticisms range from failing to  provide for adequate social amenities to being pro-rich. On careful inspection, the principles underlying the plan seem sound and desirable, but the problem seems to lie in managing the politics (and lack of communication) surrounding the DP, which has resulted in many fallacies about what the DP can and cannot do. We address some of the misconceptions associated with urban planning in general and with certain aspects of the Mumbai DP in particular. 


1. Development Plan is the same as Development Planning

A development plan is often conflated with development planning. ‘Development’ in the former includes things like changes in land use, demolitions, redevelopment of buildings, or reclamation of land over time. A Development Plan is an exercise that is limited to creating a broad spatial framework to allow for transformations to meet the evolving needs of citizens.

It is not a prescription for how economic, social, or political development should take place. Development planning has a wider scope, including economic growth, human development, and environmental sustainability. Therefore, it is unreasonable to expect a Development Plan to address the issues that lie within the purview of development planning; these require separate policies and dedicated public resources.


2. Relaxing FSI restrictions is pro-builders

There is a common misconception that increasing FSI is a giveaway to developers. It is true that builders want increased FSI, but clearly for themselves, not for the city as a whole. Currently, the complex tangle of FSI norms serves their interests perfectly since they can do backroom deals and pay for additional FSI. The cost is then passed on to the end user, the homebuyer, leading to astronomical prices of homes in the city. Freeing up the FSI regime is to the detriment of builders and beneficial for home buyers since it no longer remains a scarce entitlement. For the city, a higher FSI means a sharp increase in supply, to meet the high demand for housing. This will lead to a fall in prices, making housing more affordable.


3. Density rises with FSI

There is no conclusive evidence to suggest that FSI increase leads to an increase in urban density. It is true that increased FSI leads to more built-up area, but the density of physical space is not the same thing as density of people. To illustrate, even if FSI were doubled for the whole city from 1.33 to 2.66, for the density of people to remain constant, the population will have to go from 12 million to 24 million, which is highly unlikely. In fact, research by our colleagues at New York University show that densities have fallen in virtually every major city in the world they’ve looked at. What is more likely is that the per capita consumption of housing space will increase. People migrate to cities in search of better opportunities regardless of the FSI regimes. If one is averse to high densities, the way to limit it is by restricting entry of people to Mumbai. If that sounds unacceptable in a democracy, why should limiting potential real estate development through FSI control be less problematic? It must be emphasised here that increased FSI as prescribed in the DP will not be consumed by developers and landowners, just because it is available. What the policy tries is to ensure there is no scarcity of floor space that causes land market distortions. Increase in FSI allows households and firms to consume more floor space as their income increases.


4.Increased FSI will burden already-strained infrastructure, and infrastructure augmentation should precede any increase in FSI. 

It is density of people, rather than higher FSI, that puts pressure on infrastructure, and higher FSI will not result in corresponding higher population density. Delaying much-needed FSI increases until there is adequate infrastructure will worsen land market distortions created by decades of very low FSI. Instead, FSI regulations that require surrendering part of land in return for more vertical space could be an effective way to create area for public spaces in a space-starved city, as has been attempted in the city of Ahmedabad, and charges on premium FSI consumption can be used to finance infrastructure.


5. DP must cater to population and growth projections assuming finite limits to technological change

Population prediction is an inexact science at best, and it is difficult to determine rates of population growth. Predicting technological change is practically impossible. Plans typically extrapolate from the present situation keeping technology as a constant. Time and again it has been shown that planners fail to account for technological changes and advancements that open up economic opportunities, restructure the city’s economy, and impact land use. The existing DP for Mumbai was prepared sometime in the 1980s, when the textile industry was nearing collapse and was sanctioned in 1994. This was before the rise of the service economy driven by the boom in financial services, and business process outsourcing and retail sectors.

The existing DP notably did not foresee any of these structural changes in the city’s economy. Given this situation, it is imperative that plans are flexible enough to respond to demand so urban planning is aligned with economic prosperity. A market-oriented and dynamic approach as opposed to a static approach will work in the best interest of all stakeholders involved and will not constrain economic growth.


The present situation is borne of a trust deficit between citizens and government. The credibility of the government in implementing policies is low and the fear that good policies may fail due to poor implementation is valid. However, our energies are better utilised in trying to improve governance and implementation, instead of scrapping the DP, which will perpetuate the current flawed policies that have cost millions in the city a chance for a decent home and better quality of life.


[This article is informed by a roundtable event that was held by IDFC Institute.]

Topic : Transitions / In : OP-EDS
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