TDR refers to Transferable Development Right, a planning instrument introduced in the year 1991 under the Regulation No 34 of the Development Control Regulations. In simple terms, TDR means the development right that can be separated from a plot and can be transferred to another plot. TDR is issued in form of Development Rights Certificate(DRC) to the land owner whose land is being either acquired by the municipal authorities or because of a Development Plan reservation the said land cannot be used for construction purposes. In lieu of the the right to use the land DRCs are issued which can be then sold by the holder in the market.
TDR in itself originates from FSI. FSI (also known as floor area ratio) is a ratio between the land and the construction allowed on it. FSI prescribes how much construction is permitted on a certain piece of land and TDR is a transferable development right of a particular piece of land which cannot be realised on the same land because the land and the development on it are protected. eg if a road is being constructed on a given piece of land then the FSI of that land cannot be used thus whole of it becomes TDR.
Shifting of development rights from one plot to another has changed the urban form and created diverse and very contrasting landscapes. As TDR generated from the slum re-development projects has been used to build high rise towers. According Most of the TDR that has been generated in Mumbai is from infrastructure projects like roads or from slum re-development projects. TDR which is generated from slum re-development has been subsequently used for the re-development of many of the co-operative housing societies in the city and sub-urb.