Earlier, any building on a 1 acre plot (44,000 square feet) could not have a built-up area of more than 55,000 square feet if it was a purely commercial complex. Similarly, the limit was of 44,000 square feet if it was a mix of residential and commercial units. With the decision being reversed, builders now have scope to construct larger buildings.
The July 2010 decision had evoked a sharp reaction from builders, who were also backed by local politicians. They claimed that reducing the FSI will lead to rise in property prices. The government had cut the FSI on the grounds that all other cities in the state have a lower limit. Now, with this decision undone, Nagpur becomes the only city in the state where builders have the freedom to construct up to twice the area of the plot they hold.
The move is expected to lead to more properties changing hands for construction of commercial structures like shopping malls, theatres, restaurants and even hospitals. All such deals had been held up after the decision to halve the FSI, as builders were hoping that lobbying by local politicians will help revert the move.
Sunil Duddalwar, president of Nagpur chapter of Confederation of Real Estate Developers of India (CREDAI), says this was needed because development plan provides only 3% space for commercial land.
"If FSI was halved, there would be hardly any area left for it, so we strongly lobbied for scrapping the decision," he said.
The rates for commercial properties range from Rs 10 to 20,000 a square feet, said Duddalwar, adding that there will be more activity on the commercial property front but did not comment on the possibility of rates coming down.
Tejinder Singh Renu, Vidarbha Taxpayers Association secretary and a builder, said locked up land deals are expected to come through and may bring rates down due to the increased supply of built-up area.
Another realtor said that many major firms had put their projects on hold after the July 2010 decision.
