HYDERABAD: The Greater Hyderabad Municipal Corporation (GHMC) has over 15 lakh square yards (equivalent to 316 acres) of Transferable Development Rights (TDRs) valued at ₹2,000 crore. Builders and developers believe these TDRs can satisfy Greater Hyderabad’s construction demands for the next two to three years. The state government intends to issue additional TDRs to property owners affected by land acquisitions for projects like the Musi rejuvenation, flyovers, road expansions, and lake development.
The GHMC has issued TDRs amounting to 51.83 lakh square yards (about 1,070 acres) to property owners since 2017 after acquiring land for road widening and other public projects. Out of the total TDRs allocated to 1,585 property owners, only 34.49 lakh square yards have been utilized.
Currently, TDR availability exceeds market demand, leaving owners in a difficult position where they must sell their TDRs at decreased prices if urgent funds are needed. To address this, the state government recently announced a directive making TDR utilization compulsory for high-rise constructions over ten floors, mandating that 10% of their built area must be derived from TDRs.
“TDRs are currently optional, as landowners can choose cash compensation. However, the government isn’t in a position to pay cash due to ongoing projects involving GHMC, HMDA, and the Musi Riverfront Development Corporation, potentially costing about ₹5,000 crore in two years if owners prefer cash. Hence, the mandatory 10% TDR regulation was introduced for taller buildings,” explained a senior municipal official.
Some builders express concern over the new regulation, estimating it may inflate construction costs by ₹300 to ₹400 per square foot. “Previously, TDRs were available at 23% to 25% of their market value, but now it has risen to around 55%. If TDRs are valued at ₹10,000 per square foot, the purchase cost previously was ₹2,500 per square foot, which has now jumped to ₹5,500,” noted V. Rajasekhar Reddy, former President of Credai, Hyderabad.
Municipal officials assert that the amendment aims to benefit TDR holders and to encourage further adoption. In Bangalore, builders can receive a higher Floor Space Index (FSI) when utilizing TDRs. In Telangana, TDRs are now mandatory only for large builders with projects above ten floors, with only 60 permissions granted in recent years for such constructions, according to another GHMC official.
What is TDR?
Transferable Development Rights (TDR) are certificates issued by urban local bodies (ULBs) that provide additional built-up area to property owners or builders when their land is taken for public use, without cash compensation. These rights can either be utilized by the property owner or sold for construction of additional floors in projects.
For example, if a building is allowed three floors under regulations, using TDRs permits the owner to build legally two extra floors without requiring additional setbacks or road width adjustments.
Since implementing the TDR policy in 2017, the state government has minimized cash compensation due to financial constraints associated with escalating land costs and ongoing infrastructure developments. The government is also considering issuing TDRs to enhance lakes and reclaim private lands in flood-prone and buffer zones.
