Enabling Smart Urban Redevelopment in India through Floor Area Ratio Incentives

This working paper assesses the potential of incentive FAR approaches in two Indian cities, Mumbai and Ahmedabad, for leveraging the economic value of urban land. A thorough analysis of Mumbai’s cluster redevelopment approach revealed this mechanism has substantial potential for augmenting municipal revenue and contributing to public infrastructure improvements. However, its success is highly dependent on the local land and real estate markets, and it may not result in sustainable and inclusive development in the long term. Additionally, it also has significant spatial impacts that need to be considered when adapting this approach for other contexts. On the other hand, Ahmedabad’s proposal for rejuvenating its central business district is still in its early stages, and requires careful assessment of land markets in the city, as well as infrastructure and service requirements generated by the increased population density. The implementing agencies need to formulate a mechanism that enables them to link revenue obtained from additional FAR to infrastructure improvements in the area from which it originates.