FSI full form Floor Space Index (FSI) is a method used by the Government of India to determine the permissible amount of construction on a piece of land. The full form of FSI of a plot is called Floor Space Index, or FSI, which stands for Floor Area Ratio. FSI is used to determine the maximum amount of construction that can be carried out on a plot of land and the extent to which a developer can expand the construction area in order to maximize the land use without going into danger zones or exceeding the norms or limits set by authorities.
As a land owner or developer, it is the responsibility of the authorities to ensure the safety and well-being of the people living around the plots where construction is being carried out. The higher the FSI value, the more space a developer will have to build taller buildings or use the land extensively.
Foreign Direct Investment (FDI) in the Indian real estate sector has pushed the developers to exceed the FSI limits as the government authorities were almost forced to relax the rules and regulations in order to allow more FDI in the industry. This has resulted in a huge influx of FDI into the Indian real estate Sector, which has led to the construction of higher buildings in the country. Given the population of the country, the high rise townships spreading all over the country have been beneficial to everyone, be it land owners, real estate developers or home buyers.
The vertical growth in the cities has resulted in the better utilization of land and supported the government’s vision for sustainable urban growth. The FSI limits have been regularly revised by the government of India to meet the country’s real estate industry needs as people seek to purchase homes in high rise towers due to their affordability.
Urban India has a significantly higher FSI value than rural parts of the country, and the Indian real estate industry continues to push the limits to a new level in the metropolitan cities and their outskirts.
FSI Formula
- The floor area ratio (FAR) or floor area standard (FSI) is calculated by multiplying the total floor area of all the bottoms of a structure and the plot area by a factor of 100.
- When the FAR is greater than 1, it means that there will be more than one story of construction on the plot or plot area. If the FAR is less than 1, the entire plot or plot area will be usable and construction will be permitted as the FAR indicates.
How to Calculate FSI?
To calculate the Floor Space Index (full form of FSI) or Floor Area Ratio, the formula is as follows:
FSI = Total Built-up area/Total Plot Area
Let’s run through an example to have a better understanding of the FSI formula (FSI in real estate).
If you have a plot size of 1,000 square meters and the permissible FSI value by authorities in the locality is 1.5 in value, then:
Total Built up area = FSI*Total Plot Area
Total Built up area = 1.5*1,000 square meters
Total built-up area = 1500 square meters
Conclusion
In India, there is a lot of room for FSI to be revised in the future given the demand outlook for real estate sector in India in the next few years. Real estate sector in India is expected to be valued at $1,000 billion in 2030, which is almost double the current size of the Indian real estate market. The demand for housing is expected to grow rapidly as the middle class in India wants to live in affordable housing around the suburbs of major cities and tier-2 cities. Therefore, the government will have to be careful as it will have to make sure that FSI limit does not impede the desired growth rate of the real estate business in India.
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