BMC hopes to generate ₹2,000 crore from 610 undeveloped property parcels

By Bricksnwall | 2025-03-05

According to the BMC budget document, the civic organization hopes to generate over ₹2,000 crore in revenue over the next four years through a One-Time Premium.

MUMBAI: Plots under 125 square meters may now be turned into leasehold properties for a duration of 30 years after the BMC modified its Vacant Land Tenancy (VLT) policy. Compared to the previous adjustment in March 2020, which only permitted the leasing of larger plots, the amended regulation represents a major change. It is anticipated to increase the BMC's income from these properties and give lessees other options for development.

There are 3,472 VLT plots in Mumbai right now, both big and little, with many of them situated in popular neighborhoods like Dadar, Matunga, and other parts of the island city and western suburbs. Only 610 of these plots could be transformed in accordance with the current VLT policy. Notwithstanding this drawback, these 610 plots have a significant potential worth of more than ₹2,000 crore. The civic body's goal was to generate approximately ₹2,000 crore in revenue through a One-Time Premium over the next four years, according to the BMC budget paper, which was also presented on February 4.

Currently, VLT plot residents pay a small monthly rent—sometimes as little as ₹30 to ₹100. In accordance with the revised policy, the BMC's premium will be determined by multiplying the zonal Floor Space Index (FSI) by the ready reckoner rate, which represents the plot's land value. An FSI of 1.33 is equivalent to this in the island city.

Subject to clearance from the BMC's building plans department, the lessee may pursue the plot's full potential, including redevelopment, when the land is turned into a leasehold property. For conversion to leasehold, the BMC will impose a premium of 62.5% of the land's worth, according to a civic official from the estate department. 

Decades ago, the VLT Policy was created to address BMC properties that were left undeveloped. These plots were previously leased to different people on a tenancy basis, with little supervision and at extremely low rental prices. As time went on, some of them were developed or encroached upon without the BMC's consent, creating a complex scenario where numerous plots were no longer considered "vacant."

Currently, the BMC gets ₹3.5 lakh a year from lessees' rent payments. The BMC will have more authority over these lands and be able to make more money from them if they are turned into leasehold assets.

Mumbai's larger urban planning initiatives may benefit from the updated VLT Policy as well. According to the civic official, the BMC will be better equipped to carry out its Development Plan (DP) if the VLT plots are turned into leasehold properties. Additionally, it would facilitate the reclamation and reuse of land currently occupied by slums or unapproved structures that has been set aside in the DP for open spaces such as playgrounds and recreation areas.

Source: Hindustan Times