Boosting Mumbai’s Growth: MMRDA’s Financial Compensation Policy to Expedite Key Projects

Mumbai, 3 April , 2025 : Under the visionary leadership of Chief Minister Sri Devendra Fadnavis, and under the chairmanship of Deputy Chief Minister Shri Eknath Shinde, the Mumbai Metropolitan Region Development Authority (MMRDA) is going to implement a landmark resolution to implement a comprehensive financial compensation policy aimed at expediting the resettlement process for Project-Affected Persons (PAPs) across several of its high-impact urban infrastructure projects. This resolution was approved during the 159th Authority Meeting, chaired by Deputy Chief Minister and MMRDA Chairman, Shri Eknath Shinde. This forward-looking initiative is expected to resolve ongoing challenges related to resettlement and significantly boost the pace of critical projects such as the Metro Railway, Mumbai Trans Harbour Link (MTHL), Sewri-Worli Elevated Corridor, and other major urban mobility projects.

As part of the Mumbai Urban Transport Project (MUTP), which has seen several ambitious projects aimed at transforming the city’s transport network, MMRDA’s new compensation framework will replace the traditional tenement-based resettlement approach with financial compensation. This policy will provide project-affected individuals with the option to receive financial aid instead of relocation into resettlement colonies, offering a more efficient and flexible solution for all stakeholders involved.

Policy Alignment with Brihanmumbai Municipal Corporation (BMC) Guidelines:
MMRDA has undertaken several ambitious projects such as the Santa Cruz-Chembur Link Road, Jogeshwari-Vikhroli Link Road, Metro, Monorail, and the Versova-Virar Coastal Road. The ongoing projects, including the Sewri-Worli Elevated Corridor and the Thane (Tikujiniwadi) to Mankhurd–Borivali Underground Road, are expected to affect approximately 6,300 individuals as per preliminary surveys. Due to a lack of available tenement space in proximity to the affected areas, some project-affected individuals have resisted resettlement, creating delays in project progress.
Following the Brihanmumbai Municipal Corporation's (BMC) circular dated 03/07/2023, MMRDA has proposed to adopt a similar policy, which will offer financial compensation as an alternative to resettlement tenements. This policy will be implemented across major infrastructure projects under the Mumbai Urban Transport Project (MUTP).

Resolution for Financial Compensation:
For Residential Use: Financial compensation will be based on the Ready Reckoner Rate (ASR Rate) and the compensation will vary based on the affected individual's category and area. A minimum compensation of Rs. 25 lakhs will be provided for residential PAPs in both Category (1) legal and authorized structures and Category (2) squatters and encroachers. While there is a cap of Rs. 40 lakhs for Category 2, Category 1 has a cap of 1292 sq. ft. area. Compensation will be offered at 100% of RR rate for authorized and legal structures and 0.75% RR rate for encroachments and squatters.
For Non-Residential Use: For affected non-residential PAPs, the compensation will be provided based on the Ready Reckoner Rates (ASR Rates) of ground-floor commercial spaces. For eligible areas up to 225 sq. ft., compensation will be offered at 100% of RR rate for authorized and legal structures and 0.75% RR rate for encroachments and squatters.
This policy is designed to ensure that the affected individuals are adequately compensated, thus avoiding further delays and escalating costs associated with litigation and disputes over tenement space. The policy will help in completing vital projects, funded through World Bank loans and other financial resources, within the prescribed timelines, thus avoiding cost overruns and ensuring the successful development of the city’s infrastructure.

The financial compensation policy will apply to all major infrastructure projects implemented by MMRDA under the Mumbai Urban Transport Project (MUTP) framework. These include projects like the Metro, Sewri-Worli Elevated Corridor, Thane-Borivali Underground Road, and others. The policy also applies to residential and non-residential buildings that are being affected by these projects.

While commenting on the policy, Shri Devendra Fadnavis, Hon’ble Chief Minister of Maharashtra, said:
“Through this innovative financial compensation policy, we are taking a major step towards transforming Mumbai’s infrastructure. By prioritizing timely project completion and minimizing disruptions, we are ensuring the city’s rapid growth and development. This progressive approach will not only enhance connectivity but also create long-term benefits for Maharashtra’s economy and the well-being of its people, making way for a more sustainable and prosperous future.”

Shri Eknath Shinde, Hon’ble Dy. Chief Minister of Maharashtra & Chairman, MMRDA, stated:
“The policy will allow for efficient resettlement, reducing unnecessary delays in crucial urban infrastructure projects. By offering financial compensation, MMRDA is moving towards a modern and flexible model that will speed up the delivery of key projects, such as the Sewri-Worli Elevated Corridor and Metro Line projects, ensuring that these crucial initiatives are completed within the stipulated timelines.”

Dr. Sanjay Mukherjee, Metropolitan Commissioner, MMRDA, said:
“The approval of this policy marks a pivotal moment for MMRDA’s approach to resettlement. By offering a flexible and efficient solution, we are not only easing the burden on project-affected individuals but also ensuring the timely completion of Mumbai’s critical infrastructure projects. This progressive step will significantly enhance the quality of life for the city’s residents while enabling us to meet the growing demands of Mumbai’s development.”