This decision was taken at the executive board meeting of the MIDC held at the official guest house Sahyadri, Malbar Hill.

Industries minister Rajendra Darda said, "MIDC would seek Floor Space Index (FSI) of 4 from the state government to rehabilitate illegal shanties on its land in Mumbai, Thane, Kalyan-Dombivili and Pimpri Chinchwad. This can solve the problem of the poor slumdwellers."

MIDC said this scheme would be open to pre 1995 structures. The additional FSI has been sought to provide an incentive to builders to build free homes in exchange of flats for commercial sale.

According to sources in the department, substantial MIDC land in Thane and Marol in Andheri has been encroached and this scheme can open up much needed space for construction. For instance 52 acres of land in Wagle estate in Thane, has been illegal encroached. Given the space crunch in the city, this is prime real estate and will be eyed by most big development firms.

FSI is an indicator of how high a developer can build on a plot. The higher the FSI, the higher one can build on a given plot of land. MIDC may find it difficult to get FSI of 4 from the state since the norm for SRA schemes is 2.5. Only giant rehousing projects like Dharavi, or rehabilitation of airport slums have been granted FSI of 4 so far.