The Indian government cleared a proposal last Sunday to renovate 516 bungalows in Lutyens' Delhi.

The bungalows occupy a 2,800-acre area in the heart of the city and were built in the 1920s as part of Edwardian architect Edwin Lutyens' plan for the national capital, which was then the seat of the British Raj.

The bungalows are mainly occupied by ministry officials and senior bureaucrats.

Lutyens' Delhi, consisting of the bungalow zone and iconic structures such as India Gate, the Rashtrapati Bhavan and several other monuments, is a Unesco World Heritage City.

The government's renovation plan involves tearing the bungalows down and rebuilding them with modern facilities.

The government also plans to make the whole area earthquake-resistant. It envisages spending Rs 3,000 crore on this project, including spending Rs 2.7 crore on each bungalow.

This has led to suggestions that the government use this opportunity to revive a decade-old plan to redevelop the entire bungalow zone in toto, including by erecting high-rises in place of bungalows to deal with the space crunch in the city.

In 2004, the central public works department had floated a plan to build multi-storeyed residential towers, but the Delhi Urban Art Commission, tasked with advising the government about preserving aesthetic quality of the city, shot the plan down.

Last year, the department proposed to reduce the size of government-owned plots, in order  to free up space for more bungalows.

Following this, redevelopment work started on government bungalows around Sunehri Bagh Road. The original nineteen bungalows built here on four to five acres of land each will give way to 35 bungalows, each on 1 acre to 1.5 acres.

But talk of expanding the renovation project into a comprehensive redevelopment plan have led to concerns that this will destroy a heritage zone.

Already, over the years, inappropriate alterations to the historic bungalows have been made, in spite of their protected status, according to the World Monuments Fund, an independent organisation dedicated to protecting the world's heritage sites.

The New York-based organisation has named central New Delhi, with its imperial buildings and bungalows, one of the planet's 100 most endangered heritage sites.

The current proposal appears, on the face of it, respectful of the zone's heritage. "If the renovation work leaves the facades untouched, there is nothing wrong with it," said Mustansir Dalvi, architecture professor at Mumbai's JJ College of Architecture.

Some people have argued that the plan makes economic sense. Indeed, one could argue that the zone's heritage status does not justify its preservation, given Delhi's explosive population growth and the resulting space crunch in the city.

It is India's densest city and one of the densest cities in the world, with an estimated population density of 11,297 persons per square kilometre. This is more than that of Manila, Jakarta, Ho Chi Minh City, and several other cities considered to be densely populated.

“It’s one thing to preserve colonial architecture," said Harini Narayanan, an urban development consultant based in New Delhi. "But it’s another to give 1,200 families 2,800 acres."

Razing the bungalows in the 2,800-acre area will indeed clear up space in the heart of the city to accommodate more people. The population density in Lutyens' bungalow zone is one-third of what it is in the rest of the city, at 4,000 people per square kilometre.

However, let's assume that Lutyen's Delhi is used to build affordable housing and the density of this area increases to equal that of the density of the rest of the city, which will decrease slightly from what it is now.

Even then, calculations show that only slightly more than 80,000 more people will get housing in this prime area, which is less than half a per cent of Delhi's population of 16.7 million, according to the 2011 census.

The above figure is the difference between the city's population density and Lutyen's Delhi's density, which is 7,297, multiplied by 2,800 acres or 11.3 square kilometres.

So if the intention of developing the zone is to tackle the city's space crunch, not much is to be gained.

Narayanan acknowledged that razing the bungalows won't solve Delhi's space problems, but it would be a first, and highly symbolic step, towards redistributing the land to those who actually need it. "It sends a message across that the government cares about space issues," she said.

At the same time, the far greater worry, she also acknowledged, was that redevelopment initiatives would serve the interests of commercial developers, who have been lobbying in the city for development rights in order to build high-rises on that prime area.

The real estate value of the 255-acre part of the zone that is privately held has increased eight-fold in the past ten years, from Rs 6,100 crore in 2002 to Rs 49,000 crore now. The 995 acres occupied by government bungalows is valued at Rs 1,92,000 crore. Needless to say, these prices could change if and when the land actually comes in to the market.

Witnessing the rise in property prices, a number of old families who have been living in the area for over four decades are now ready to sell these bungalows.

A Rs 150-crore (about $24 million) price tag is considered a bargain, according to an Economic Times report. That is nearly five times the median price of a luxury apartment in Manhattan, which costs about $4.9 million according to a CNBC report.

Redevelopment work in such prime land is unlikely to keep the accommodation of the common man in mind.

In fact, according to New Delhi-based Dunu Roy, who is director of the Hazards Centre in New Delhi and works on urban development issues in the city, the Rs 3,000-crore renovation project is likely to be the first step towards high-rises coming up in Delhi's leafy heart.

This, he said, was because the overwhelming majority of Delhi's redevelopment projects were carried out on a public-private-partnership basis, which have, in the past, inevitably led to builders getting development rights.

"The only asset that urban bodies have is land," he said, adding that this is why any project involving public-private-partnership, be it improving the water supply or improving the transport system, will not attract investors unless land is thrown into the equation.

This applies to even high-profile development success stories like the Delhi Metro. "The Delhi Metro doesn't pay for itself. It is the land near it that its developers make money from," he said.

This, he said, resulted in a reinterpretation of the land pooling policy, which originally involved private owners pooling their land and selling it to the government for development, which would then give back private owners a stake in the developed land.

Now, public land is pooled and given to private players to develop, who then give the government a stake in the land.

Such a policy was approved by the urban development ministry last year, and has been described as a "disaster in the making" by AGK Menon, the convenor of the Delhi chapter of the Indian National Trust For Art and Cultural Heritage.

The rebuilding of Lutyens' bungalows to make them modern and more quake resistant offers no such long-term benefits to the contractors who will be engaged to carry out the project, Roy said, and hence, such a project would almost certainly involve development rights, first at another region of Delhi, and later, within the zone itself.

Harini Narayanan was sceptical that the renovation proposal would attract any contractors. "We have found that private players build flyovers, but not rebuild slums. There are realistic limits to what builders with a profit motive will do for the public interest." Heritage conservation was unlikely to be high on a developer's priorities, she said.

Even though the project cost for rebuilding the bungalows, at Rs 3,000 crore, exceeds the 2012 budget of the New Delhi Municipal Council (Rs 2,200 crore), it would attract, at best, mid-level contractors. The Lutyens' bungalow zone is about a quarter of the area the NDMC caters to, and is part of the council's ambit.

Narayanan's and Roy's experience suggests that the renovation project would eventually lead to prime public land being ceded over to developers, who can exploit the astronomical real-estate value to make the city's heart even more inaccessible to the common man.

"This face-lift for government property in the zone is a clear indication that more comprehensive redevelopment plans are being considered." said Roy.

Roy admitted that he cared little for the heritage that Lutyens' bungalow zone represented, and did not subscribe to the conservationist argument for keeping developers out of the area.

"The zone represents only elite capture," he said, a situation where resources designated for the benefit of the larger population are usurped by a few individuals of superior status.

But ceding over the land to private developers would only make it an even more egregious example of this phenomenon, he said.

For Narayanan, who believes that tearing down the zone could lead to development in the public interest, the developer lobby presents the biggest threat.

"One should not lose the opportunity to free up land for those who actually need it. It is possible to redevelop this area more equitably without letting developers pack it with expensive high-rises," she said.

Renovating the bungalows won't affect their heritage status, at least if the anonymous government official is believed. And tearing them down for redevelopment need not inevitably lead to astronomically-priced high-rises, as Roy said.

But given Delhi's recent development history, it is the more probable outcome.