Maharashtra plans law to end century-old Pagdi system
Why in the news
In December 2025, Maharashtra Deputy Chief Minister Eknath Shinde announced that the state will bring new legislation, with a separate regulatory framework, to end the century-old Pagdi system. The plan was presented as a proposal at this stage, not as an enacted law.
Key facts
- The Pagdi system is a rental model common in Mumbai before the 1940s.
- Tenants pay a one-time premium (pagdi) and get near-permanent occupancy rights.
- Monthly rent stays very low, often frozen for decades.
- The new framework would give tenants a clearer stake in redeveloped property.
- Landlords would receive fair compensation and revised rent terms.
- A dedicated regulatory mechanism aims to cut litigation and add transparency.
| Stakeholder | Problem now | Proposed gain |
|---|---|---|
| Tenants | Fear of displacement | Stake in redeveloped property |
| Landlords | Income too low for upkeep | Fair compensation |
About the Pagdi problem
Low rents left landlords unable to pay property tax or maintain buildings, so many structures became unsafe and redevelopment stalled. The arrangement also encouraged opaque cash dealings.
Exam angle
- Pagdi is a tenancy system, mainly linked to Mumbai.
- The announcement came from Deputy CM Eknath Shinde; the law is still proposed.
- Useful for housing and urban-governance questions in state PSC papers.