PF or Katchi Nidhi: The Unofficial Barrier in Building Approvals
For years, many applicants, builders, and industry insiders have spoken about an unofficial payment allegedly collected during building approval processes in Tamil Nadu. This payment was commonly referred to as PF, Party Fund, or Katchi Nidhi.
According to reports, the alleged amount was said to be collected on a per-square-foot basis from applicants seeking building approvals. The claim is that during the AIADMK period, this amount was around ₹25 per sq. ft., and during the DMK period, it allegedly increased to ₹27 per sq. ft.
The allegation is serious: applicants were reportedly made to believe that approvals would move forward only after this unofficial amount was paid.
Why This Became a Major Concern
Building approval should be based on documents, planning rules, land use, setbacks, road width, FSI, ownership clarity, and compliance with development regulations.
But when unofficial payments enter the system, the process becomes unfair.
A person with proper documents may still face delay.
A person following the rules may still be pressured.
A genuine applicant may lose time, money, and confidence in the approval system.
This is why the alleged PF/Katchi Nidhi practice became a major concern for property owners, builders, developers, and ordinary citizens.
CMDA’s Move Against Red Tapism
The Chennai Metropolitan Development Authority has now issued directions to officials to avoid delays and process applications within prescribed timelines. The circular specifically warns against red tapism, malpractice, favouritism, and misuse of official position.
The direction covers applications related to planning permission, completion certificates, layouts, reclassification proposals, and other approvals. Officials have also been instructed to monitor pending files daily and record valid reasons if any application cannot be processed within time.
This is important because it shifts the focus back to one basic principle: approval must depend on rules and documents, not unofficial payments.
Not Just CMDA: The Issue Affects Town Planning Too
This discussion is not limited only to CMDA. Similar concerns have also been raised in relation to town planning departments and local approval systems across Tamil Nadu.
For many applicants, the approval journey passes through different levels of local bodies, planning offices, and technical scrutiny. If unofficial payments are eliminated across all these levels, it can make the system cleaner and faster.
The real impact will be seen only when the same discipline is followed not just in Chennai, but across planning authorities and local bodies in Tamil Nadu.
What This Means for Applicants
If this change is implemented properly, applicants may no longer need to depend on unofficial channels to move their files.
Building approval should be granted when:
the ownership documents are clear,
the plan follows planning rules,
the required government fees are paid,
the site satisfies road width, setback, FSI, and zoning norms,
and there are no legal or technical defects.
That is how the system should work.
What Builders and Property Owners Should Do Now
Even if red tapism is reduced, applicants must not assume that every file will be approved automatically. Documentation still matters.
Before applying for approval, property owners and builders should check title documents, patta, EC, survey details, land classification, road access, zoning, FSI limits, and approval eligibility.
A clean system helps only when the applicant’s file is also clean.
Verified.RealEstate can assist property owners, buyers, builders, and developers with document verification, land due diligence, approval-readiness checks, and risk identification before major property decisions are made.
Final Takeaway
The alleged PF/Katchi Nidhi system damaged trust in building approvals because it created fear that files would move only through unofficial payments.
If the new direction is implemented strictly, it can be a major step toward cleaner, faster, and more transparent building approvals in Tamil Nadu.
The rule should be simple: if the documents are proper and the plan follows the law, approval should not be delayed.