Telangana's TDR Policy Ignites Real Estate Controversy in Hyderabad
A recent policy shift in Telangana aimed at compensating landowners and speeding up urban development has plunged the state's real estate sector into fresh turmoil. Following the government's decision last month to mandate the use of transferable development rights (TDR) for certain high-rise constructions and allow their application for setback relaxations, TDR prices have surged dramatically, particularly in the Greater Hyderabad region.
Builders, developers, and individual property owners are voicing alarm over what they perceive as an artificial price hike and potential market manipulation. TDR certificates are issued to landowners who give up their property for public projects like road widening, the Musi river rejuvenation, and other infrastructure initiatives. Instead of cash compensation, these owners receive development rights that can be used on other properties or sold in the open market.
From Relief Mechanism to Speculative Market
Originally designed as a relief tool for displaced landowners, TDR has transformed into a speculative marketplace. Industry sources report that TDRs, which previously traded at about 23% to 25% of their total value, are now being quoted at rates as high as 70%. Large developers buying in bulk are reportedly securing rates around 56%, according to real estate association members.
The market's scale is substantial. A January 2026 report revealed that the Greater Hyderabad Municipal Corporation (GHMC) had issued TDRs to 1,585 individuals, covering roughly 1,070 acres (51.83 lakh square yards). Of this, approximately 712 acres (34.49 lakh square yards) had been utilized, while about 316 acres (15.31 lakh square yards) remained available.
More recent data from the state-run TDR bank website indicates that 1,967 individuals have now received TDRs. Based on January estimates, nearly Rs 9,000 crore worth of TDRs were accessible. This abundance raises a critical question: why have prices escalated so sharply despite the large volume available?
Public Concerns and Government Mandates
"When such a huge quantity is available in the market, according to government records, why is there a sudden jump in TDR prices? The government should act against those illegally hoarding TDRs and inflating prices," said N. Sridhar, a resident of Gopanpally. Sridhar, who hoped to use TDR to add an extra floor to his property, claims that certificates are hard for individuals to obtain, with brokers quoting rates near 70% of the value when available.
Under the new government order issued last month, TDR has become compulsory for specific high-rise building categories. Structures between 10 and 20 floors must meet 3% of the required built-up space through TDR, while those exceeding 20 floors must meet 5%. Developers are required to submit 50% of the TDR at the application stage and the remaining 50% before receiving the occupancy certificate. For non-high-rise buildings, TDR can be used to obtain setback relaxations.
Allegations of Market Control and Informal Trading
The government asserts that the policy aims to boost TDR utilization and provide fair compensation for land lost to public works. However, industry insiders allege that a significant portion of TDR has accumulated with a small group of influential individuals, creating a cartel-like situation that engineers scarcity and drives up prices.
"The government's intention may be sound, but much of the TDR has ended up with a few powerful people, forming a kind of cartel that has manipulated supply and increased costs. Within the industry, there are claims that one individual acquired around Rs 600 crore worth of TDR through benami transactions," said a former office-bearer of a real estate body. He emphasized that curbing black-market practices is the government's responsibility.
There are also reports of an informal trading network. Some brokers allegedly obtain details of TDR recipients from municipal town planning officials and approach landowners directly.
"When we learn that someone has received TDR after losing land to road widening, we approach them and enter into agreements at a fixed price. Once higher rates are secured, the original holder provides a mobile OTP to complete the transfer during building approvals. We earn a commission from the buyer," said an anonymous broker.
He added that smaller brokers have been pushed out of the market in recent years, as wealthy investors began directly acquiring TDRs from landowners, tightening supply and intensifying price pressures.
Conclusion: A System Under Scrutiny
In principle, TDR is a straightforward concept: additional built-up area granted in exchange for land surrendered for public use. In practice, however, the system in Telangana has become a contentious issue, raising persistent questions about access, pricing, and market control. As the real estate market grapples with these challenges, stakeholders await government intervention to ensure transparency and fairness.
