Political Factors of Construction Industry


The political factors affecting the construction and housing industry mostly consists of documentation’s and permits that has to be obtained during the various phases of construction of a structure and its sale.

  • Building Commencement Certificate: Construction of a building or any such structure cannot take place unless and until the builder or the company secures a commencement certificate from the authority, in case of Mumbai it is the BMC who gives IOD&CC- Intimation of Disapproval & Commencement Certificate.
  • Floor Space Index (FSI): FSI is basically a ratio, which determines how tall can buildings or a structure can be constructed on a particular plot. The local authority issues it.
  • Occupation Certificate: After the completion of construction work of a building, the builder or the company has to secure an Occupation Certificate without which the flats in the building cannot be occupied for residential or commercial purposes.
  • Brihan Mumbai Corporation [BMC] Developing Plans: BMC’s developing plans form the most basic criteria in selecting a site. These developing plans chart out pre-defined areas, which the BMC has already allocated for certain purposes.

E.g. In a given area, some land is reserved for plantation/farming, some piece is kept for industrial establishments like the MIDC area and the other one reserved for residential purposes. So the Builder finds out the type of land, which is suitable for his purpose, i.e.; if he wants to build up a residential complex, then he has to do so in the area reserved for residential purposes; as per the BMC’s developing plans.

  • CRZ (Coastal Recovery Zone): According to this rule a builder cannot carry out any construction within the radius of half kilometer from sea.
    • TDR (Transfer of Development Right): This right is available to a builder for utilizing the additional FSI. Normally TDR is given by the local Municipal Authority who acquires the portion of land of builders either for the purpose of constructing road or for making gardens.
    • Others: Apart from the above mentioned points there is also tax exemption that is given for the construction of building on the land having area of more than 1 acre.


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