In a major administrative consolidation move, the Maharashtra government has formally acquired Mumbai’s iconic Air India building for ₹1,601 crore, nearly two years after receiving the Centre’s approval.

The 23-storeyed landmark at Nariman Point will be refurbished and repurposed to house multiple state government departments currently operating from rented premises across Mumbai and Navi Mumbai. The acquisition is expected to help the state save nearly ₹200 crore annually in rental expenses while creating a centralized government office hub in the heart of the city, according to a report by The Hindustan Times.

Multiple state departments currently function out of rented premises in Mumbai and Navi Mumbai, such as rural development, public health and medical education. Others such as the transport commissionerate, Maharashtra Administrative Tribunal (MAT), fisheries commissionerate and advisory bodies, operate from similarly rented premises, including MTNL buildings in south Mumbai.

The Maharashtra cabinet had approved the proposal to purchase the Air India building after a meeting on November 8, 2023. Subsequently, the state government waived unearned income dues and penalties amounting to ₹298 crore payable by Air India, facilitating the transfer process.

Administrative approval for the ₹1,601-crore expenditure was granted on June 27, 2024; and the state government transferred the payment to AIAHL on May 31, 2026, completing the acquisition.

Before proceeding with the purchase, the government commissioned a structural audit of the building through Mumbai-based engineering institution VJTI. The audit reportedly concluded that the structure would remain functional after the recommended repairs were carried out.

Milind Mhaiskar, additional chief secretary, public works department (PWD) said, “The iconic Air India building’s refurbishment will be undertaken immediately and completed in six months so that our offices located elsewhere can be relocated here.”

After shifting its headquarters to New Delhi in 2013, Air India decided to sell the building as part of its asset monetisation programme. The property was not included in Air India’s privatisation and transfer to the Tata Group. Before the airline’s sale, the building and several other assets and subsidiaries were transferred to AIAHL, a special-purpose vehicle of the Union government.