Latest amendments to Chandigarh Master Plan 2031 leave Phase I (Sectors 1-30) untouched. Phase II will allow stilt parking in government flats yet to be constructed.

Chandigarh administration is considering increasing the permissible floor area ratio (FAR) for commercial properties outside heritage sectors. The proposal is to double FAR in Industrial Area Phase I and II to 2.0, from current 0.75 and 1.0. This increase in FAR will entail changes in coverage area and permissible building heights. Post the 2005 scheme for conversion of land use in Industrial Area Phase I and II, the city witnessed addition of 35,48,880 sq ft of new commercial space; FAR was doubled from 1 to 2, and building height increased to 30m from 18.29m, discontinued Sept 18, 2008. In 2000, FAR was increased from 0.75 to 1.0 and ground coverage from 50% to 60% for industrial plots up to one acre. Heritage sectors (Sectors 1-30) will not see changes in FAR, height or coverage area. Supreme Court in 2023 mandated strict preservation of Chandigarh's Phase I heritage, banning conversion of single dwelling units into apartments and freezing FAR. Chandigarh administration also considering mixed land use approach for Industrial Area Phase-III (153 acres) and involving private sector through PPP model to expedite infrastructure development.

An 11-member committee headed by deputy commissioner Nishant Kumar Yadav recommended increasing FAR in Industrial Areas Phase 1 and Phase 2 from 0.75 to 1.5, with FAR of 2.2 proposed for Phase 3. Recommendations will go to UT chief secretary next week, then UT administrator for notification. Current FAR of 0.75 allows 750 square yards built-up area on a 1,000-square-yard plot; recommended 1.5 would allow 1,500 square yards by permitting additional storeys. Currently two storeys allowed in Phase 1 and 2; four storeys permitted in Phase 3. Increased FAR enables industrialists to expand usable space without acquiring extra land, improving viability and investment attractiveness. Neighbouring industrial estates in Mohali, Panchkula, Dera Bassi, Barwala and Baddi offer FAR between 2.5 and 3. Industrialists have demanded FAR revision for over two decades. Industry urged extending FAR relief to smaller plots of five marla to one kanal. Nearly 90% of violation notices in past five years relate to polycarbonate-covered central courtyards despite 2018 UT notification allowing such structures without counting toward FAR. UT Estate Office plans auctioning around 140 plots in Phase 3 starting April. Phase 3 spans 153 acres near Raipur Kalan, conceptualised in 2001, development began December last year. Planned as hub for high-value, non-polluting industries: IT, electronics, biotechnology, nanotechnology, light engineering, automotive components, knowledge-based industries, hospitality, finance, banking, furniture, sanitary fittings, handloom and handicraft units. Plots ranging one kanal to four kanals will be auctioned in phases, around 10 plots per e-auction round, completion within one year. A few Phase 2 plots will also be auctioned.

Industrial Area Phase 3, envisioned over 20 years ago, will be developed as a hub for non-polluting, high-value industries: IT, electronics, biotechnology, nanotechnology, light engineering, automotive components, knowledge-based industries, hospitality, finance, banking, furniture, sanitary fittings, handloom and handicrafts.

140 plots ranging from 1 to 4 kanals will be auctioned starting first week of April 2026. 10 plots will be auctioned per phase, with aim to complete all auctions within one year. Collector rates to be revised in next financial year.

Phase 3 spans 153 acres near Raipur Kalan. Only 3 plots allotted so far (all on Supreme Court orders), no construction due to lack of basic infrastructure: roads, power, water. Layout zoning to be completed before auctions begin.

Chandigarh has Phases 1 (776.14 acres, fully developed) and 2 (486 acres, fully developed) housing over 1,800 industrial plots combined. Phase 3 development aligns with Chandigarh Master Plan 2031.