Latest Answer: Floor Space Index (FSI) indicates the maximum allowed area to be built up on a plot in a particular area i.e., if the FSI is one and the plot size is 1,200 sq ft, the maximum built up area allowed on that plot is 1,200 sq ft. The FSI is decided by the state and local development body. Any construction exceeding the FSI is considered an illegal construction and can be subjected to legal action. Regularization of an illegal construction is subject to laws of a particular state development authority. It may include buying additional FSI or paying a compounding fee.