In this piece for Mint, Vaidehi Tandel and Sahil Gandhi urge municipalities to resist the temptation to raise finances using land-based mechanisms such as chargeable additional FSI. They write: 

"While this is a good move for ensuring buoyancy, it will most definitely have an impact on costs for developers and thus affect residential prices. While making these decisions, governments should not be satisfied with increasing revenue alone, but must examine the impact of such policies on housing markets.

For cash-strapped urban local bodies in India, the revenue potential that land-based financing offers could result in it being used recklessly. In wielding these instruments for raising revenue, the government should be mindful of their distortionary effects."

Read the full article here