New Delhi, Jan. 29 -- The Economic Survey 2025-26 has flagged restrictive land-use regulations, particularly low Floor Space Index (FSI) and Floor Area Ratio (FAR), as a key structural constraint holding back India's urban growth, linking the issue directly to fragmented urban governance and weak institutional accountability.
The Survey notes that Development Control Regulations (DCRs) that cap built-up area per unit of land constrain vertical development and force cities to expand outward rather than upward. This distortion, it says, raises land values and creates artificial scarcity in core urban areas. Compared to global cities such as New York and Hong Kong, Indian cities have relatively low FSI, barring limited exceptions like central...