Maharashtra to Scrap Colonial-Era Pagdi System, Unlock Redevelopment of 19,000 Mumbai Buildings

In a landmark announcement from the floor of the Maharashtra Legislative Assembly on Thursday, Deputy Chief Minister Eknath Shinde declared that the state will introduce a dedicated legal and regulatory framework to permanently dismantle Mumbai’s colonial-era pagdi system and unlock the stalled redevelopment of more than 19,000 pre-1960 cess buildings, many of which are on the verge of collapse and have claimed numerous lives in recent monsoons.

These structures, built mostly before Independence, house lakhs of families under the Maharashtra Rent Control Act at token rents of sometimes just a few rupees per month. While the law has protected tenants for generations, it has simultaneously frozen redevelopment because landlords receive negligible compensation and developers refuse to touch projects burdened by indefinite rehabilitation liabilities. Over 13,000 such buildings remain in dangerous condition, with thousands of court cases stretching across decades.

The new policy introduces a three-tier FSI distribution formula. Existing pagdi tenants will receive full FSI matching their current carpet area in the new building, landlords will be entitled to the base permissible FSI of the plot as rightful owners, and developers will get generous incentive FSI sufficient to construct free replacement homes for all economically weaker and low-income tenants without charging them a single rupee. Any leftover FSI blocked by airport funnel zones, coastal regulations, or height caps will be compensated through freely tradable Transferable Development Rights.

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Existing redevelopment routes under Section 33(7) for MHADA cess buildings and Section 33(9) for cluster schemes will remain operational, but the new framework offers a parallel, tailor-made corridor exclusively for pagdi properties. Shinde emphasised that the policy has been designed after years of consultations to ensure zero financial burden on tenants while delivering fair market value to landlords.

To break the judicial logjam, the government will immediately approach the Bombay High Court for permission to establish multiple dedicated fast-track courts. These benches will exclusively handle the roughly 28,000 pending tenant-landlord disputes, with a clear target to clear the entire backlog within three years. Once cleared, lakhs of families currently living under perpetual tenancy will finally receive ownership flats in modern towers, ending generations of insecurity while transforming Mumbai’s skyline and safety standards.

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