Mumbai News: MMRDA Introduces Financial Compensation Policy For Project-Affected People To Expedite Infra Projects, 6,300 PAPs To Benefit

Mumbai: In a major development the Mumbai Metropolitan Region Development Authority (MMRDA) has introduced a financial compensation policy for the project affected people (PAPs) so as to expedite big infrastructure projects.

As per this new policy, the eligible PAPs both residential and commercial will be given minimum Rs 25 lakh as financial compensation. Earlier the PAPs were given alternate tenement. However, this used to delay the project timeline, as per the MMRDA.

The new policy will benefit 6300 PAPs across high impact infra projects. Moreover, the financial compensation will be based on the ready reckoner rates and align with the Brihanmumbai Municipal Corporation (BMC) 2023 guidelines.

According to the MMRDA, a resolution was approved during the 159th Authority Meeting, chaired by Deputy Chief Minister and MMRDA Chairman, Eknath Shinde. This major policy decision 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), 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.

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 of 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).

For Residential Use the 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.

Chief Minister Devendra Fadnavis 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."

Eknath Shinde, Dy. CM & 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.”

Similarly, Dr. Sanjay Mukherjee, 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.”

This year the MMRDA has allocated Rs 35,151.14 crore — approximately 87% of its total expenditure of the budget for financial year 2025-26 — earmarked for infrastructure projects. These include metro line extensions, construction of new tunnels, coastal routes, regional water source development, and major urban infrastructure works.

The big projects are Thane Borivali twin tunnel project of Rs 2,684, crore Orange Gate, Eastern Freeway to Marine Drive underground road project Rs 1,813.40 crore, Uttan to Virar Coastal Project Rs 2,000 crore,Underground tunnel from Gaimukh to Fountain Hotel Junction on Thane-Ghodbunder Road amounting to Rs 1,200 crore, Elevated road from Fountain Hotel Junction to Bhayander Rs 1,000 crore etc.