Maharashtra Deputy Chief Minister Eknath Shinde has announced a sweeping new regulatory framework to redevelop Mumbai’s ageing pagdi buildings, calling it a “historic decision” aimed at phasing out the century-old tenancy model and accelerating long-pending redevelopment projects across the city. The announcement, made in the state legislative assembly, is expected to reshape the future of nearly 19,000 rent-controlled properties that still operate under the pagdi system—many of them built before 1960 and now in critical need of structural upgrades.
DCM Shinde said the intervention was essential to prevent further deterioration of Mumbai’s old buildings, many of which have already collapsed or continue to pose severe safety risks. Describing the new plan as a long-overdue corrective mechanism, he said the move would “speed up redevelopment, prevent collapses, and reduce loss of life and property,” according to a PTI report.
Understanding the Pagdi System
The pagdi system is an old model from pre-Independence times that is kept alive by the pagdi model itself. This model basically lets tenants live there for nearly their whole lifetime in exchange for a one-time payment and a very small rent. Partly, tenants are like owners, i.e. they have the rights to rent out and sell their tenancies, though the owners' lands are registered under landlords. Nowadays, the system has been blamed for unregulated transactions, the problem of maintenance, and landlords not investing in repairs as they are given few rents. “The redevelopment of Pagdi buildings has been met with resistance because of legal disputes and structural intricacies. A just and equitable framework that safeguards the rights of both tenants and landlords is necessary,” DCM Shinde said.
As per the information given by the government which was referred to in the assembly, there are more than 19,000 buildings that are operating under different types of pagdi tenancy in Mumbai and close to 13,500 of them have not been redeveloped yet. A large number of these are in a dilapidated condition while some have even fallen down, thus local authorities have recognized the necessity of a specialised redevelopment framework as the only solution to the problem.
Balancing Tenant and Landlord Interests
DCM Shinde pointed out that while tenants have the protection of the Maharashtra Rent Control Act, the system has been largely losing out to landlords. "These buildings, the tenants, and their agreements are all legally valid. The government has protected tenants through the Rent Control Act. But landlords allege that because of tenants' rights to rehabilitation, they are not getting adequate compensation for their property," he informed. In addition, he indicated that a vast number of disagreements between the two sides have no resolutions. "Many litigations between tenants and landlords are still waiting for a decision in small-cause courts, which have a limited role in redevelopment," he said.
The new framework aims to rebalance these competing interests while making redevelopment financially viable. For tenants from economically weaker sections and low-income groups, Shinde said FSI incentives alone are not sufficient, and the government will ensure the full reconstruction cost of their existing homes is covered. A dedicated set of rules is being drafted to address this.
Key Provisions of the Proposed Rules
According to the new system, tenants will be given a Floor Space Index (FSI) equal to the area they are currently occupying. On the other hand, landlords will receive the FSI that matches their share of the land. In the case of low-income and EWS tenants, there will be an extra incentive FSI so that their homes can be rebuilt without any cost. Should it happen that the utilization of the FSI is limited due to height restrictions or other planning limitations, the remainder of the entitlement will be in the form of Transferable Development Rights (TDR) thus giving the option to the stakeholders to sell the unused development potential.
DCM Shinde explained that the existing redevelopment methods like regulations 33(7) and 33(9) will still be functioning, but the new framework is about a different way that is aimed for the next thousands of buildings which have not got any advantage under the previous rules. Besides these, he also made known a plan for dealing with the large judicial backlog which has been a major hindrance to redevelopment for a long time. In small-cause courts, there are nearly 28,000 legal cases of tenants and landlords. To make the process of dispute resolution quicker, the government with the approval of the high court will set up more courts that are solely reading these cases and will do so within three years thereby achieving the clearing of these cases.
“This initiative will finally pave the way for lakhs of Mumbai residents living in Pagdi buildings to get ownership-based homes. Neither tenants nor landlords will face injustice. The government is committed to resolving any further hurdles,” DCM Shinde said.
Experts Weigh In
Urban planners and housing specialists consider the reform to be both a necessary and timely one. Landlords have been left without much incentive or financial capability to carry out repairs or structural upgrades due to low rents under the pagdi model, hence they are responsible for the widespread deterioration of Mumbai’s old neighbourhoods. Tenants, however, are always hesitant to get displaced or be given poor quality rehabilitation and thus the agreement on redevelopment has always been difficult.
This new device is anticipated to ease the negotiation process and bring more openness into a system which has been influenced by uncertainty and old laws for a long time. It is probable that the changes will also be beneficial to the developers as they will have clearer rules and fewer chances of being involved in a dispute which has been the main reason for the projects getting delayed for decades.
Such a structure could lead to the largest wave of redevelopment that Mumbai has experienced in recent years if carried out properly. Besides making the city safer, it could also change the way land is used, create more housing, and bring the city’s most congested and economically weakest areas up to the 21st century. Experts argue that the drive might be the one to actually empower tenants and at the same time landlords and developers would receive enough compensation—thereby making possible a much-awaited transition of Mumbai’s aged pagdi system.
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