22.5% Developed Land Return, Cash/FSI/TDR Compensation Choices, “As-Is-Where-Is” Industrial Allotments, And FDI-Linked Eligibility Norms Form The Core.
By Arosh John, Founder, John Real Estate (MahaRERA Reg. No. A51700001835) | Editor-in-Chief, Thane Real Estate News (TREN)
Mumbai | 15 February 2026
The Maharashtra Cabinet has approved a land acquisition and allotment policy for the proposed “Third Mumbai” development planned in the influence area of the Mumbai Trans Harbour Link (MTHL), popularly known as Atal Setu. The framework sets out how land will be acquired, how landowners will be compensated, and how industrial and investment-led projects may be allotted land within the influence zone.
For clarity on geography and governance, the state has already notified the Karnala–Sai–Chirner (KSC) New Town planning area—124 villages across Uran, Panvel and Pen talukas (Raigad district)—and has officially appointed MMRDA as the New Town Development Authority (NTDA) for this area via a Government notification dated 15 October 2024. The broader positioning is to use this node as a growth engine for the Mumbai Metropolitan Region (MMR), aligned with the stated aspiration of moving MMR toward a USD 300 billion economy by 2030 and a longer-term USD 1.5 trillion economy by 2047.
The policy also sits alongside the region’s big connectivity bets—most notably Atal Setu and the Navi Mumbai International Airport (NMIA)—to deepen the industrial, logistics, and job-led development corridor across the Navi Mumbai–Raigad belt. NMIA has already commenced phased commercial operations and is expected to scale up capacity through 2026.
Quick Snapshot (Policy + Planning Context)
| Feature | Details |
|---|---|
| Total Area (KSC New Town planning area) | 323.44 sq km |
| Regional Coverage | 124 villages across Uran, Panvel & Pen talukas |
| Nodal Agency | MMRDA appointed as NTDA (notification dated 15 October 2024) |
| Compensation Options | Cash, FSI, or TDR |
| 22.5% Developed Land Return | Developed plots; cash if entitlement is less than 40 sq m |
| FDI Priority Threshold | Minimum 100 acres + ₹250 crore investment per 100 acres (within 4 years; excluding land cost) |
| Industrial Allotment Model | Pass-through; “as-is-where-is”; allottee bears acquisition/development-linked costs |
Land Acquisition Routes Recognised
The policy provides for land acquisition through:
- Mutual consent / negotiated purchase, and/or
- Acquisition under the applicable land acquisition compensation framework.
This dual-route approach is intended to reduce procedural uncertainty for large land parcels required for planned city development.
Compensation Choices: Cash Or Development Rights (FSI/TDR)
Apart from cash compensation, the approved framework allows compensation to be structured through:
- FSI (Floor Space Index), or
- TDR (Transferable Development Rights).
The policy also enables additional development rights where required for amenities and construction-linked planning needs, subject to the authority’s servicing and layout requirements.
22.5% Developed Land Return: Plot-Back Model With A Minimum Size Condition
A central feature is the 22.5% developed land return mechanism. Under this model, where land is acquired through negotiation, eligible project-affected persons are to be offered developed plots under the stated terms.
A key condition is the minimum plot-size threshold:
- If the developed plot area under the 22.5% return is less than 40 sq m, the policy provides for cash compensation instead.
“Pass-Through” Industrial Allotment: Cost Shifted To Plot Holders
To accelerate industrial development in underdeveloped pockets, the Cabinet has approved a pass-through policy for industrial land allotment, with clearly stated cost responsibilities.
Under this mechanism:
- Land acquisition compensation and development-related costs are to be recovered from plot holders in instalments.
- The allottee bears the acquisition cost, registration charges, and establishment-related expenses, with MMRDA levying a 15% establishment charge.
- Land is allotted on an “as-is-where-is” basis, and the authority does not commit to providing infrastructure in such areas under this pass-through arrangement.
- Any future increase in compensation, if required, may be recovered from the allottee.
- A formal agreement is to be executed between the authority and the plot holder reflecting these terms.
FDI-Linked Priority: Minimum Land + Minimum Capital Deployment
The policy provides a prioritisation structure for industries bringing foreign direct investment (FDI) into the influence area.
Eligibility thresholds stated include:
- Minimum 100 acres land requirement, and
- Minimum investment of ₹250 crore per 100 acres within four years, excluding land cost.
The framework also states that:
- Sale/transfer of undeveloped land will not be permitted, and
- Up to 25% of the total developed area may be permitted for eligible FDI projects, subject to the authority’s conditions.
Land Aggregators And SPVs For Development Hubs
The Cabinet has also approved:
- Inviting proposals from land aggregators for land development, and
- Creating development hubs through Special Purpose Vehicles (SPVs) on a partnership basis.
MMRDA is to frame detailed allotment rules and submit them to the government for approval, along with a revenue model linked to infrastructure-led development.
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About The Author
Arosh John is a Thane real estate expert and the Founder of John Real Estate (MahaRERA Reg. No. A51700001835). With 10+ years of on-ground experience across Thane and the wider Mumbai Metropolitan Region, he is known for transaction-first advisory in premium apartments, resale homes, luxury villas, and NRI investment.
He is also the Editor-in-Chief of Thane Real Estate News (TREN), where he publishes fact-led coverage on projects, infrastructure, policy, and market pricing—helping end-users and investors make clearer decisions. For buyers and sellers, Arosh is widely regarded as a leading property consultant and one of the top real estate agents in Thane, recognised for compliance-led execution and micro-market expertise across belts such as Majiwada, Pokhran Road, Kolshet, Ghodbunder Road, Hiranandani Estate, and Upper Thane.
Disclaimer
This article is for information and public-interest reporting only. It does not constitute legal, tax, or investment advice. Readers should verify applicable notifications, rules, and project-specific terms before making decisions.
