Companies & Sectors
New CRZ norms a boon for real estate companies

The new rules allow slum rehab in the CRZ area, redevelopment of dilapidated structures in this previously no-go area and higher FSI. But benefits could take a while to come in

The new coastal regulation zone (CRZ) norms open up huge development potential for real estate companies in Mumbai. The new rules will impact the sector in three major ways. Slum development which was not permitted in CRZ areas is to be allowed. It will now become possible to redevelop dilapidated, cessed and unsafe buildings within the zone. The new norms also allow a floor space index (FSI) of 2.5 times in the CRZ areas, in line with the rest of Mumbai city. Till now it was only 1.33 times.

The CRZ area, as defined by the environment ministry, is the stretch within 500 metres of the high-tide line on the landward side. Under CRZ 1, the construction of roads, approach roads and missing link roads is allowed on stilts, to ensure that free flow of tidal water is not impacted. Under CRZ 2, building development will now be allowed on the seaward side of the CRZ stretch, with separate provision for slum rehabilitation with FSI in accordance with existing regulations (maximum 2.5 times + TDR) and government stake of 51% in such projects.

As a safeguard against corruption, the Right to Information Act (RTI) will be applicable to all such projects; the schemes of the Slum Rehabilitation Authority (SRA) will be undertaken through companies with a 51% or more government stake; the Ministry of Environment and Forests will have the right to appoint statutory auditors for redevelopment of dilapidated, cessed and unsafe buildings, while projects under the SRA scheme will be audited by the Comptroller and Auditor General (CAG). The government of Maharashtra will also set up a 'high level oversight committee'. The government sees a 51% stake in projects as a positive, but the markets view it as a negative-the players believe this will be a major deterrent for companies as it leaves 'very little room for them' and it will in fact lead to a breeding ground for kickbacks and corruption.

It is believed that as many as 47,000 families will benefit from the new norms and that 146 slum clusters will be developed with the additional FSI. Additionally, an attempt can be made to develop 620 dilapidated, unsafe and cessed structures where about 38,000 families are residing currently. Other beneficiaries may include 38 colonies of fisherfolk, located right from Colaba (in south Mumbai) to Gorai (in Borivali).

To put things in perspective, of the 437 sq km area that is Mumbai city, nearly 202 sq km is under, or is impacted by the CRZ, that is a whopping 46% of the total area, according to a research report from Kotak for its clients, published on Tuesday. The brokerage believes that assuming all the families which can be rehabilitated will be at 300 sq ft per family, with a 2.5 times FSI, there is a potential for real estate development of 89 million sq ft, "which at the current run-rate would be equal to a decade of supply in various micro markets".

Kotak says that if all works out well, "a case can be made for a win-win scenario for both-developers and property buyers. Buyers could benefit from lower residential property prices due to increased supply (led by higher FSI available; while developers could benefit on greater volumes and an internal rate of return (IRR) similar to current redevelopment projects, as long as constant property prices are factored when the bid is submitted to SRA (Slum Rehabilitation Authority)."

Up until now, due to existing prohibitive norms, most SRA projects took place only in north Mumbai-mostly inland. However, the new norms will allow such projects throughout the coastal city.

While all this sounds great on paper, Kotak believes that any meaningful impact will be 3-5 years away. "We are not turning bullish on property developers focusing on rehabilitation projects on the back of this, as we believe any meaningful NAV accretion will be at least three years away, while  project completion could be 5-7 years away and we await progress in government-developer partnerships." Even market watchers believe that it will take at least six months to a year before policy changes are incorporated in the city's development plan for redevelopment to start.

For now, it looks like HDIL, with around 49 million sq ft of developed and ongoing slum rehabilitation projects (largely the Mumbai airport SRA work) is the biggest beneficiary of the new norms, Kotak says. One drawback is that it has very little presence in south Mumbai.

The slum problem in Mumbai is huge. According to some estimates, the city has a 60% slum area, where unhygienic conditions and the lack of basic amenities causes epidemics (malaria, dengue, even cholera) all the year round. Some say that around 50% of Mumbai's 14 million people live in slums.

(This article is based on secondary research. The report is for information only. None of the stock information, data and company information presented herein constitutes a recommendation or solicitation of any offer to buy or sell any securities. Investors must do their own research and due diligence before acting on any security. Some of the opinions expressed in this article are the author's own and may not necessarily represent those of Moneylife.)


Peas to you; please pass the pepper

Onions are so dear, that you will shed many a tear. But what about the humble daal? Don’t choke on what we are about to say

Decades of travel by road and rail all over India have taught me many things-one of which is that it is always safer, better, cheaper and cleaner to survive on fresh vegetarian food.

Boiled eggs in shells may be an exemption to this rule. But here too, it is advisable to look for shops selling fresh eggs. That's about it-and to take it one step further, the safest and easily available option, which is clean and healthy, is steamed rice, freshly-cooked boiling hot daal-and onions.

This meal has worked well for me all over the Subcontinent, even at locations as diverse as Chittagong, Lahore and Rohtang Pass.

Of course, there are dhabas peppered all over India-the meals served there are not cooked in animal fat.

At your normal eateries, onions are now grudgingly offered-and sometimes at an extra price. Lentils, daal and pulses of all sorts, which were not too many decades ago offered as part of a "buy-the-roti-and-get-the-daal-free" deal, have acquired a price point of their own.

The costliest of all roadside daal is often one that has had the prefix 'Bukhara' added to it... for no fault of its own. And at the bottom of the heap used to be what were called "dun peas", simply boiled in water with or without a pressure cooker, salt to taste and off you go.

The history of dun peas in India is in itself very interesting. While some variety or the other was always available locally, they weren't really consumed in bulk, until the first shiploads started arriving in India sometime in the late 1970s.

Wheat imports had almost ceased, the Green Revolution was in full swing, but suddenly there was a huge shortage of lentils and pulses in India. This, incidentally, was also around the time the price of daal (as an extra) stopped being an issue when truck drivers and others went to eat at dhabas.

The rest of the country had not really discovered the concept of eating out all that much, leave alone drive out of the city to a dhaba, just to eat. And when they did go out to eat, it wasn't for daal-Bukhara as something other than a Central Asian city had not been invented as yet, while Moti Mahal was all about tandoori chicken.

So anyways, along came these shiploads of dun peas, landed cost close to nothing-because most of the varieties imported were of the high-protein type, also used as superior feeding material for animals.

The Internet not being what it is now in those days, and free daal at dhabas being more important, it was just a matter of time before word was out-here was a superior imported dried kind of "pea" (mattar).

And it didn't cost too much either.

Today, India is the largest importer of all kinds of lentils, pulses, daal-and dun peas-from Australia.

At one of those many commercial parties in Delhi thrown by diplomats of assorted hues and leanings-selling everything from luxury cars to better bars-I was sharing table space with an Australian. The conversation was all about how India could not get enough of the basic daal from Down Under-and how the trade was set to grow, simply because it was cheaper to grow and then transport shiploads to India, than to grow it locally in our country.

Of course, the banter was followed by an impressive folder-with a lot of pretty photos and many fancy numbers.

So, with some more research, with the kind courtesy of the Ministry of Commerce, Government of India, here are some numbers to enliven the issue of your daily daal chawal, and the now almost-absent onion:

  • Almost 30% of the world's pulse production is from India. That's about 15 million tonnes (MT). But that's not enough, demand keeps growing. Last year India imported over 4MT-mainly from Australia and Myanmar, along with fairly large quantities from China and Canada. Imported pulses are most always "raw", as the processing facilities in India are efficient and plentiful.


  • India is also an exporter of pulses, but this is often banned, as has been done repeatedly over the past few years. The quantity is also negligible, compared to imports as well as production, and is often to countries where there are significant South Asian populations and no pulse-processing facilities. Pulse exports can therefore be said to be "value-added". There is a separate "export opportunity" story there.
  •  In value terms, the price of imported raw pulses has increased tremendously over time, and especially over the last decade, as consumption rises in India. Likewise, yield and final achievement (per hectare) in India, around 500-600 kilos per hectare, is reportedly between half and one-fourth of the yield in Australia and Canada.
  •  The prices of pulses have increased faster than the prices of other commodities. According to some estimates, the price rise is about twice that, especially for urad daal, while the rate hike for arhar and grams are not as high. This is also due to a variety of subsidies on pulse imports into India-both from the exporting countries in some cases and also from India.
  • As far as the issue of pulse production and crops in India over the past few months goes, the jury is still out on this one. But the numbers are said to be worrying those in power.

That's not all. To add to these problems, large parts of agricultural Australia are currently under water, causing major problems as well as price hikes locally. This will in turn impact export subsidies, as Australians also consume large amounts of pulses-albeit for their livestock.
So are we going to see the next price hike, after onions, on daal? Chances are that we just might, and as a result, importers seem to be scrambling to cover the odds-by bringing in more from China and Myanmar.

 What will we eat on our highways, then, next? One answer is already visible in the by-lanes and alleyways of urban Delhi-a plate of rajma daal chawal is now at almost the same price as a plate of paneer curry chawal and chicken curry chawal. But your dish will come to you sans onions-you will get radishes instead.




7 years ago

It was especially exciting in India for me to go to two vegetarian cities, Haridwar and Rishikesh.

For lots of free info and links about the *many* benefits of vegetarianism (and the many problems with the production and consumption of meat), please visit (and share) Eco-Eating at

Shadi Katyal

7 years ago

India has failed to keep up with population explosion and not much attention has been paid to agriculture.Since we donot have much cold storage most of our fresh vegetables and fruits are spoiled before reaching a customer. What if any progress has been made.
Most of pulses and other food is being imported by STC etc and thus costly as certain cut goes to the employees.
Open this trade to private traders and let people in India get cheaper pulses and other food needs..Time to open the market for the people.

Sistema Shyam appoints Shankar Bali as COO for Delhi & Haryana

Sistema Shyam TeleServices Ltd (SSTL) has appointed Shankar Bali as the chief operating officer (COO) of Delhi NCR & Haryana circle. Reporting directly to Vsevolod Rozanov, President and CEO of the company, Mr Bali will be responsible for further stimulating the business growth for the company in the region.

He would handle business development, daily operations, planning and execution of efficient marketing strategies, infrastructure management, capacity enhancement and governance. Mr Bali brings with him a rich experience of over 21 years including more than 17 years in the telecom sector. During his last assignment at Hutch, as the chief executive officer for Sri Lanka, he spearheaded the entire mobility initiatives of the company in the country.


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