THERE IS a lot of confusion about Floor Space Index (FSI). Even the government doesn't seem to understand the nuances of FSI and how to regulate it.

Secondly, the government sees raising the FSI as a money-making opportunity for itself and not to bring relief to a beleaguered city As . a part of his budget presentation for 2008-09, the state's Finance Minister announced that the FSI in the city's suburbs would be increased to 1.33 and brought on par with FSI in the Island City. For the additional 0.33 FSI, "premium would be required to be paid on the basis of market value as per the ready reckoner."

Similarly, the minister stated that "the State Government will also raise resources for the housing programme through levy of a 25 per cent premium on developers undertaking Slum Rehabilitation Authority schemes and grant of additional FSI for MHADA colonies."

Changing the FSI is a subject matter of the development plan to be prepared by a planning authority under the Town Planning Act and not a matter to be dealt with in the state budget. A close reading of the announcement shows that increase in FSI is seen as a revenue raising measure.

An FSI of 1 was prescribed for the suburbs first in 1991 in 1964. Given the average income till the '80s the actual demand for floor space was less than the. FSI limit and therefore did not act as a supply side constraint. From mid-80s incomes started rising, housing finance became available and tax rebates on housing loans were introduced. This increased the demand for floor space.

But from 1976 onwards the land supply shrunk because of the urban land ceiling and the draft plan that excluded coastal wet lands for development However, FSI remained at 1 and demand for floor space led to sharp increase in housing prices rise. Increasing FSI under these circumstances could have been a way of relaxing the supply side constraint.

However, the Finance Minister's proposal to charge premium at the current market price for the extra FSI would nullify that advantage. This therefore deserves closer scrutiny .

Although to "acquire, hold and dispose of property" is no longer a fundamental right there still exists a legal right that states, "No person shall be deprived of his property save by authority of law." (Article 300 of the Constitution of India).

When the property is land it includes the right to develop it subject to reasonable restrictions on health and safety considerations. However, the proposal of the Finance Minster implies that development rights are owned by the state and it can sell them to land owners at a price. The basic question is how did the state acquire these development rights in the first place.

Unfortunately, instead of making efforts to remove supply constraints, the government policy sustains the scarcity that keeps prices high and then selectively eas constraint es the through incentive FSI for slums. It is not difficult to visualise that this provides a happy hunting ground for the rent-seekers. In fact, scarcity and price levels are being kept high for the illusory purpose of giving free houses to the poor. It is perverse to use scarcity as a tool to help the poor. It will obviously be counterproduc- tive, as it would push prices up and force more people to seek shelter in slums.

The most common argument against an increase in FSI is the in- adequacy of infrastructure. Howev- er, persisting with low uniform FSI does not seem to have helped infra- structure in any way - neither in re- straining demand nor in financing infrastructure improvement. De mand for infrastructure depends upon population and not on FSI. The population of a city grows due to its economy, which provides livelihood to people. People come to cities to make a living. Doubling of FSI would not therefore double the population on its own account.

Moreover, FSI is only a broad indi cation of population density in a giv en area. If doubling of FSI doubles floor space per person, it would not change the density and hence would not increase the infrastructure demand. Admittedly the interrelation between FSI and density is more complex and mediated by the prices prevailing in the market. Thus infrastructure demand in terms of water supply, sewerage, solid waste to be collected and disposed of and transport will depend upon the total population of the city. Local variation in density and FSI may not have serious implications on such primary infrastructure.

Thus it makes sense to vary the FSI in line with the transport network, particularly metro. Over 70 per cent of travel demand in Mumbai is met by public transport. Metro and suburban railway stations could have higher FSI, particularly at the points of intersection such as D.N. Nagar, Andheri and Ghatkopar on the Versova Ghatkopar metro line and Bandra and Kurla on the Charkop-Bandra-Kurla corridor. A city's land use has to be decided with reference to its transport network. This would help reduce the travel by road. Prescribing a uniform (and low) FSI would make the city inefficient in terms of transport and suboptimal in terms of its use of land.

The city also requires land to be allocated to public purposes - roads, footpaths, schools, hospitals and playgrounds. Increased FSI could lead to higher population density because of higher real estate prices. But it should be possible take care of by allotting more land for public use. Finally, striking a balance between built-up space, space for schools and hospitals, open spaces, and space for roads and footpaths is the real planning challenge. FSI is only one piece in the jigsaw puzzle.

Hence, fixing FSI is essentially a planning function and not a matter to be covered by budget announcements. If it is accepted that it the government's right to charge a premium for FSI, then the day may not far off when the government auctions such rights to the highest bidder to cover budgetary deficits. This certainly would not be in anybody's interests.

Vidyadhar K. Phatak is an architect

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