Affordable housing and Smart Cities – these are the two mantras the Maharashtra government is pursuing as it made changes to its urban township policy. A move that the government hopes will encourage more private developers to come forward and invest in the project.

Maharashtra Amends Special Township Policy

The Maharashtra government recently took the decision to amend its Special Township Policy of 2004, in order to allow new integrated townships to come up in the peripheries of cities and towns in the state. Its mission? To encourage the growth of more affordable housing options across the state, while ensuring they are smart townships as well.

“We wanted to combine these two concepts and incentivise townships while making all the smart city issues a part of these townships. So what we really wanted to were create smart townships which would have good amenities and infrastructure while ensuring that there would be inclusive growth and economic activity inside those townships.” says Nitin Karir, Principal Secretary of the Urban Development Department

The change comes at a time when the old policy has been receiving flak for being too complicated and unattractive for developers to work in. Which is why the government has made a string of amendments to the policy including:

– Encouraging smart features such as a smart transportation system, broad band connectivity, and efficient power management.

– A focus on affordable housing by mandating that 20% of the total built up area be reserved for social housing, which will then be sold through MHADA’s lottery system.

– Greater incentives for private developers including a higher FSI of 1.7 to 2 and special concessions like reductions in stamp duties among others.

“We count on the private sector to provide all the amenities and the infrastructure so that people can get good quality of life. That is why we are providing these incentives including higher FSI and fewer permissions. Under the old policy, we had 35 townships being setup. We are hoping the new policy will see many more.” says Nitin Karir

Developers Line Up To Build Smart Townships

The amended policy holds huge implications for several areas in the Mumbai Metropolitan region including Thane, Navi Mumbai and Vasai-Virar where developers hold large land parcels that are best suited to building these smart townships. In fact, several developers have already expressed interest in the new policy.

“I think we always wanting more but the point is I guess the government is experimenting by giving certain incentives today. As soon as finalization of the policy is done by the government, we will file for three townships and if sanctioned, we will take them up.” claimed Niranjan Hiranandani, CMD of the Hiranandani Group.

While there is much that is good, experts say the government can do more to specify what developers have to deliver, especially for the affordable housing part of the policy.

“I haven’t come across any measures to compel private developers to build affordable housing if they go in for these special townships. On one side you are talking about providing hosing for urban poor, on the other side, you are talking about higher FSI which can raise construction costs, making building affordable housing a challenge . Third, you are talking about the creation of smart townships. There are so many of these statements and it all sounds very confusing .” warns Gulam Zia, executive director at Knight Frank India.

The policy has been passed by the state cabinet and is now open to suggestions from the public. But for this to work, the government will have to codify what it expects from developers while also ensuring that the terms are attractive enough for them to stay invested. Otherwise, this could just remain a plan on paper.

Reporter : Ashwini Priolker, NDTV
Web Editor : Nikhil Narayan Sivadas, NDTV