mumbai chief minister prithviraj chavan on thursday cleared a longpending proposal that will allow suburban developers the option to purchase 33 additional fsi floor space index from the state government instead of buying the more expensive tdr transfer of development rights from the open market builders with projects in the suburbs rejoiced when news trickled in from mantralaya on thursday afternoon one of their biggest grouses against the cm was his delay in approving the proposal which was first announced by the government in 2008 they hinted that property prices in the suburbs could reduce if the premium turns out to be cheaper than the tdr prices the rs 2500 croreayear tdr market is controlled by a clutch of politicallyconnected developers currently the entire construction industry in the suburbs is dependent on this tdr cartel tdr is generated when the owner developer surrenders his land to the government for a public project or agrees to rehouse slumdwellers or projectaffected persons free of cost in turn he is issued a tdr certificate that allows him additional construction rights in the suburbs but only to the north of the plot he has surrendered he can even sell this certificate to another developer the government expects to collect around rs 1000 crore a year by charging this premium it will share half the amount with the bmc the money will be used to augment mumbais infrastructure the premium will be based on the ready reckoner rate for land fsi defines the permissible builtup area on a plot the permissible fsi in mumbais suburbs is restricted to just 1 but a developer can load another 1 fsi by buying tdr from the market the maximum cap of fsi 2 for projects in the suburbs still remains said ashish kumar singh secretary to the cms office industry sources said the current price of tdr is rs 2500 a square foot the governments premium based on the ready reckoner rate could be mostly in the range of rs 1800 to rs 2000 a sq ft except in areas such as bandra khar santa cruz and powai in these areas the government premium may turn out to be more expensive than tdr because the land rates here are astronomical but a developer said the bandrakhar belt has never been the common mans market but property prices in areas beyond andheri in the western suburbs and mulund in the eastern belt could reduce he said builder sandeep runwal said he expects tdr prices to dip following the cms decision home prices will become affordable he said an industry source said the demand for tdr was around 12 lakh square metres every year however this year the tdr demand is down by 70 because of the slowdown in the property market said the source at present roughly 25000 sq m of tdr is available in the market most of which is held by a couple of slum redevelopers what is fsi fsi refers to the buildable area on a