The Maharashtra government has announced plans to expedite redevelopment on mill lands, tackle the pagdi system, and issue Occupation Certificates to more than 20,000 buildings in Mumbai.
On December 11, 2025, Deputy Chief Minister Eknath Shinde made a historic announcement in the Legislative Assembly to make Mumbai pagdi-free, with separate regulations for the proper and equitable redevelopment of such buildings.
It is also necessary to protect the rights of the tenants and the landlords, he added, and stated that just providing FSI would not suffice; it was required to plan the reconstruction of homes for the economically weaker sections free of cost, for which a separate regulation would be prepared.
Under the pagdi system, the tenants are quasi-owners and pay a nominal rent; they also have lifetime occupancy rights, and can, with consent, sell or sublet the property. There are more than 19,000 such buildings dating back to before 1960. While some have been redeveloped, more than 13,000 are awaiting redevelopment. The rights of the tenants in these buildings are protected under the Maharashtra Rent Control Act. These buildings, as well as the tenants and agreements in them, are legal, and while the government had protected tenants through the Rent Control Act, landlords did not receive proper compensation for their ownership rights. Many cases are also pending in the small causes court between tenants and landlords. As a result, there is little response to the redevelopment of pagdi buildings.
Mr Shinde said that provisions will be made, such as granting FSI equal to the area occupied by the tenants, the original FSI to owners based on land ownership and an incentive FSI for cost-free reconstruction of homes for the pagdi holders. If, due to any reasons such as height restrictions or other restrictions, it is not possible to fully utilise all the FSI, the remaining would be made available in the form of TDR.
This regulation will pave the way for the redevelopment of old buildings under the pagdi system. Other existing options for redevelopment such as 33 (7) and 33 (9) would continue.
Mr Shinde also said that fast-track courts will be established. About 28,000 cases are pending between tenants and building owners, and many families have been stuck in this legal process for decades. These disputes should also be resolved to speed up redevelopment, with sufficient additional fast-track courts being set up with the prior permission of the High Court to dispose of these cases. It is expected that all the cases will be disposed of within three years.
Mr Shinde also spoke of the government amending regulations to encourage the redevelopment of old chawls on textile mill lands in Mumbai. He said that chawl redevelopment on textile mill land would be expedited, as many of these are old and dangerous, and their redevelopment was necessary.
To encourage the redevelopment of such buildings, the government has approved the amendment proposal by completing the statutory process of amendment under Section 37 (1) A of the Amendment MR and TP Act, on the lines of other regulations in Regulation 35 (7) (a) of the Brihanmumbai Development Control and Promotion Rules-2034. Mr Shinde also said that a notification for approval of the amendment is being issued. This amendment will make the redevelopment of the chawls on the land of textile mills affordable and boost redevelopment.
Regulation 35 of the Development Control and Promotion Rules-2034 of the Brihanmumbai Municipal Corporation has provisions for the development or redevelopment of the lands of textile mills.
Clause (7) (a) mentions the provisions regarding the redevelopment of residential / residential-cum-commercial buildings/chawls occupied on the land of textile mills. According to this provision, eligible residents of old buildings/chawls or mill lands on textile mill land have the right to a rehabilitation flat. However, this rule does not include provision of an incentive area to developers/owners to provide a rehabilitation area to residents. Therefore, landowners/developers do not come forward for the redevelopment of buildings/chawls on textile mill land, Mr Shinde said.
In another historic announcement, Mr Shinde said that relief would be given to 20,000 buildings in Mumbai that do not have Occupation Certificates (OCs) and more than one million Mumbaikars will benefit. Mr Shinde spoke of the Modified Occupancy Protection Scheme to regularise these buildings.
Due to the absence of OC, the residents of these buildings have to pay double property tax, water tax and sewage tax. This scheme will directly benefit more than 2.5 lakh families and more than 10 lakh citizens. Many housing societies were pursuing the government for this scheme, and the state government has given a big relief by accepting their demands, Deputy Chief Minister Shinde said.
This would also make it easier to get bank loans for buying and selling houses, and ensure the right sale price. Citizens would benefit from their entire area in redevelopment, which was earlier limited to only the approved map. The hanging sword of legal action by the Municipal Corporation would also now be removed, he said.
Under this scheme, while submitting the proposal, a direct discount of 50% will be given on the prevailing rate of Ready Reckoner while charging a premium for the area to be made compliant (additional carpet area/fungible area). Notably, no penalty will be levied on the proposals received in the first six months. However, proposals received between six months and one year will be levied a penalty of 50% of the prevailing rate.
Mr Shinde said that the Municipal Corporation had been instructed to start a separate system to provide OCs, not just to the entire building, but also to individual flat holders.
This scheme would benefit not just residential buildings, but also other structures such as hospitals and schools that are unauthorised constructions.