Micro-Zoning, RR proposal: A reform opportunity

Mumbai: The government’s proposed introduction of micro-zoning and differentiated Ready Reckoner (RR) rates marks a significant shift in the way property valuations are determined across the state. The initiative, which seeks to assign distinct RR rates to high-rise buildings, slums, chawls and redeveloped properties within the same locality, has largely been welcomed by the real estate sector. Industry stakeholders, however, caution that the reform’s effectiveness will depend less on its...

min read

Micro-Zoning, RR proposal: A reform opportunity

Mumbai: The government’s proposed introduction of micro-zoning and differentiated Ready Reckoner (RR) rates marks a significant shift in the way property valuations are determined across the state. The initiative, which seeks to assign distinct RR rates to high-rise buildings, slums, chawls and redeveloped properties within the same locality, has largely been welcomed by the real estate sector. Industry stakeholders, however, caution that the reform’s effectiveness will depend less on its intent and more on the framework governing its implementation. The proposal comes at a time when property markets in major urban centres, particularly Mumbai Metropolitan Region (MMR), are witnessing increasingly diverse development patterns within the same neighbourhoods. Experts argue that uniform RR rates often fail to capture the substantial variations in infrastructure quality, redevelopment status, accessibility and market demand that exist even within small geographical pockets. Real estate professionals believe that a micro-zoning approach could help bridge the gap between official property valuations and actual market realities. More accurate valuation mechanisms can improve transparency in transactions, provide a fairer basis for stamp duty calculations and create a more nuanced framework for urban planning. Experts’ Comments Kamlesh Thakur, President, NAREDCO Maharashtra and Co-Founder & Managing Director, Srishti Group, believes the concept has merit but warns that the execution framework will determine whether the reform succeeds or creates fresh challenges. “The concept of micro-zoning and differentiated Ready Reckoner rates has the potential to make property valuation more reflective of local market realities and development potential. However, its success will depend entirely on the framework adopted for implementation. Unless there is a clear, transparent and objective policy with well-defined parameters, the introduction of micro-zoning could lead to increased discretion at the administrative level, resulting in uncertainty and inconsistent outcomes,” he said. According to Thakur, valuation systems that allow excessive room for subjective interpretation can generate disputes, create inconsistencies in assessments and undermine business confidence. His concerns reflect a broader industry apprehension that redevelopment projects—already burdened by lengthy approval processes and rising costs—could face additional uncertainty if valuation criteria vary across administrative jurisdictions. Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory, views the proposal as a logical evolution of property valuation practices, particularly in rapidly transforming urban markets. “The move towards differentiated Ready Reckoner rates through micro-zoning is a progressive step, as property values can vary significantly within the same locality depending on factors such as infrastructure, accessibility, building quality and surrounding development. If implemented effectively, it has the potential to make property valuations more realistic and aligned with actual market dynamics,” he said. Transparency, Methodology At the same time, Agarwal emphasized that transparency and data quality will be critical to ensuring credibility. “However, the success of this initiative will depend on the transparency of the methodology, the quality of data used, and the consistency of its application across micro-markets. Buyers, investors, and developers value clarity and predictability in valuation mechanisms. A well-defined and publicly accessible framework will be essential to avoid ambiguity, strengthen market confidence, and ensure that the new system delivers greater accuracy without creating uncertainty in transaction pricing or investment decisions,” he noted. Uniformly Implemented Echoing similar concerns, Dhruman Shah, Promoter, Ariha Group, said the government must ensure that the system remains easy to understand and uniformly implemented. “The move towards micro-zoning reflects an effort to modernize property valuation and make it more representative of actual market conditions. However, it is important that the system remains simple, transparent and uniformly enforced across regions. If multiple layers of interpretation emerge during implementation, it could lead to disputes and delays, particularly for redevelopment projects that already involve complex approval processes. Industry consultation at every stage will help create a practical and effective framework,” Shah said. As the state explores one of the most significant changes to its property valuation mechanism in recent years, the industry appears broadly supportive of the objective. Yet the consensus remains clear: the success of micro-zoning will depend on transparency, consistency and stakeholder consultation. Without these safeguards, a reform intended to improve valuation accuracy could inadvertently introduce new layers of uncertainty into an already complex real estate ecosystem.

Gold, silver trade shows signs of recovery

Rajendra Joshi
Feb 3
3 min read

Sharp fall in rates revives sentiment in a market battered by unprecedented surge

Kolhapur: After reeling under an extraordinary surge in global bullion prices, India’s gold and silver jewellery industry has begun to show early signs of relief, as a sharp correction in prices over the past two days has lifted sentiment in the domestic bullion market.

The earlier rally had pushed the sector into what traders described as a severe economic crisis, wiping out business worth several lakh crore rupees and putting nearly two crore jobs under stress. With prices now cooling, manufacturers, traders and consumers are cautiously returning to the market.

Three-month spiral

The crisis began around the Diwali season and intensified over the next three months. Gold, which was available at around Rs 1 lakh per 10 grams, surged to an unprecedented Rs 1.82 lakh. Silver’s rise was even sharper: from nearly Rs 1.10 lakh per kg to close to Rs 4.20 lakh, a near fourfold increase.

The spike paralysed India’s jewellery manufacturing sector. Production units shut down in large numbers, and lakhs of artisans were pushed into unemployment. Across the country, thousands of traders reportedly faced insolvency, with refund and settlement disputes running into thousands of crores.

The impact was particularly visible in bullion trading hubs linked to MCX derivatives. Several trading firms reportedly collapsed. In Rajkot alone, over 45 traders are said to have declared insolvency. In Indore, news of a firm incurring losses of around Rs 1,500 crore sent shockwaves through the Madhya Pradesh bullion market. Manufacturing clusters in Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Karnataka and Tamil Nadu — key jewellery production centres — saw prolonged disruption.

The tide turned as aggressive gold buying by major powers began to ease. Russia, seeking to stabilise its fiscal position, is learnt to have released significant quantities of gold into the market, contributing to a global price correction. The shift has brought visible relief in the Indian market.

While fluctuations in bullion prices are not unusual, traders say this year’s surge resembled an “unnatural tsunami”. Geopolitical instability, a strong US dollar and rupee depreciation were major drivers. At the same time, large-scale gold buying by countries such as China and Russia — seen as an attempt to reduce dependence on the dollar — added to the rally.

Social media speculation about further price spikes fuelled retail frenzy. Many investors entered bullion derivatives markets, while some consumers reportedly broke bank deposits to buy gold at elevated prices. The result was severe stress across the trade.

Scale of the sector

India imports about 700 tonnes of gold annually and recycles another 250 tonnes. Silver imports are estimated at $9–9.5 billion a year. A significant portion of trading takes place on commodity exchanges such as MCX through futures and options.

The Centre had projected higher revenue from transaction-related taxes in the Union Budget, but the volatility underlined how sensitive financial and commodity markets have become to policy and global signals, traders said.

With prices stabilising, manufacturing units that had cut their workforce by as much as 90% and sent workers back to their native places have begun calling them back. Factories that had shut solely due to high input costs are reopening, and trading activity is gradually resuming in major markets.

Industry voice

Bharat Oswal, President, Kolhapur District Bullion Association; Member, Gold Council, says, “This year’s shock to the gold and silver market was severe. Producers, traders and consumers — all have suffered. The episode is a reminder against chasing excessive profit and taking uncalculated risks. Both traders and buyers must remain cautious, as bullion markets are extremely sensitive to global developments.”