In Bengaluru, new civic setup fails to unlock new revenue avenues

The new civic setup in Bengaluru, formed by dividing the former Bruhat Bengaluru Mahanagara Palike (BBMP) into five corporations, has struggled to unlock new revenue sources despite high hopes. The Brand Bengaluru Committee had predicted that North and West corporations would generate the least revenue from property taxes, estimated at ₹543 crore and ₹580 crore respectively.

The corporations had initially banked on three revenue streams - advertisement revenue, premium Floor Area Ratio (FAR), and B-Khata to A-Khata conversion - as major sources of income. However, B-Khata to A-Khata conversion saw a poor response, and premium FAR and advertisement revenue, while picking up, are earmarked for B-SMILE's big-ticket projects, not benefiting the corporations themselves.

The first budget of the corporations largely followed a template, and they collectively aimed to generate over ₹3,500 crore each through these novel revenue avenues. The paid parking system, implemented in the Central Corporation, met success, while others struggled to attract bidders. The Urban Development Department's new GBA parking rules, aimed at generating revenue through strict parking permits, have faced public criticism.

The Karnataka government's B-Khata to A-Khata conversion scheme aimed to encourage property conversions, offering a 5% conversion charge. Yet, only 12,000 applications were received despite the government's rebate of 60% and reduced conversion charge to 2%. Premium FAR and advertisement revenue, which could have generated over ₹200 crore, were also transferred to B-SMILE, diminishing the corporations' potential earnings.

Despite efforts to expand property tax potential, the corporations managed to bring only about 18,000 properties under the tax bracket. As of August 22, they had collected ₹3,372.48 crore, meeting the financial year 2026-27 target of over ₹6,700 crore. However, the corporations are yet to receive the ₹800 crore financial aid from the government, as recommended by the 15th State Finance Commission.