In Bengaluru, new civic setup fails to unlock new revenue avenues
A problem that arose when the erstwhile Bruhat Bengaluru Mahanagara Palike (BBMP) was split into five corporations was the disparity in their revenue capacities, which had to be addressed. However, the new setup will step into another year with revenue capacities largely unchange
The new corporations had high hopes for three major sources: advertisement revenue, premium FAR, and B-Khata to A-Khata conversion.
Updated - September 04, 2026 02:00 pm IST - Bengaluru
The new corporations had high hopes for three major sources: advertisement revenue, premium FAR, and B-Khata to A-Khata conversion. | Photo Credit: File photo
A problem that arose when the erstwhile Bruhat Bengaluru Mahanagara Palike (BBMP) was split into five corporations was the disparity in their revenue capacities, which had to be addressed. However, the new setup will step into another year with revenue capacities largely unchanged.
The Brand Bengaluru Committee had estimated that the North and West corporations would have the lowest property tax collections — ₹543 crore and ₹580 crore, respectively — which is the primary source of revenue for the corporations. Then Bengaluru Development Minister D.K. Shivakumar had said that the corporations would receive financial aid from the government.
“It will also be an opportunity for the appointed corporation commissioners to explore newer avenues for the civic body going forward,” Mr. Shivakumar had said. However, the corporations have largely failed to create newer revenue avenues, although they have strengthened property tax collection.
The new corporations had high hopes for three major sources: advertisement revenue, premium FAR, and B-Khata to A-Khata conversion. While the B-Khata to A-Khata conversion scheme saw a very poor response, premium FAR and advertisement revenue have picked up, according to corporation commissioners. However, the revenue from both avenues is earmarked for B-SMILE’s big-ticket projects, not benefitting corporations.
The very first budget of the five corporations was expected to reflect efforts to explore novel revenue sources, but all of them largely followed a template.
The corporations had an outlay of over ₹3,500 crore each, with hopes of generating revenue from B-Khata to A-Khata conversion and the paid parking system. The paid parking system saw success in the Central Corporation, which implemented it across 10 roads and even at K.R. Market. However, the rest struggled to attract even a single bidder for its implementation.
Now, the Urban Development Department has stepped in with new GBA parking rules, essentially focused on generating revenue through strict parking permits, but these have attracted public criticism. Even towing operations were seen as a potential revenue source, but the operations are currently witnessing negative cash inflow, according to GBA sources.
With much anticipation, the Karnataka government announced the B-Khata to A-Khata conversion scheme. The government had estimated that six lakh properties would come under the scheme and hoped for substantial revenue. It had set a conversion charge of 5% of the guidance value of the area, which meant the conversion charges ran into lakhs of rupees. In addition, the conversion was only for the plot and not for the buildings constructed on the plot.
Despite months having passed since the announcement, only a meagre 12,000 applications were received, forcing the government to offer a rebate of 60% and reduce the conversion charges to 2% of the guidance value. Despite the rebate, by the end of August, only 80,400 applications had been received, which is only 13.4% of the total properties.
Besides, in what came as a setback, premium FAR and advertisement revenue were mandated to be transferred to B-SMILE. Both avenues were fairly good sources of income, with the capability to generate over ₹200 crore.
For example, the North Corporation collected ₹185 crore from premium FAR, but the entire amount was transferred to the SPV.
Strengthening property tax collection
While the corporations attempted to expand their property tax potential, they could only bring in about 18,000 properties under the tax bracket. For the financial year 2026-27, the five corporations have a combined property tax revenue target of over ₹6,700 crore. By August 22, they had collected ₹3,372.48 crore.
The development is attributed to measures such as bringing several properties under the city’s tax bracket, identifying and collecting tax from defaulters, and pursuing arrears. While this has been a positive outcome, the corporations feel that this will improve further when the staff strength is increased.
On Wednesday, GBA Chief Commissioner M. Maheshwar Rao said that several surveys, including the SIR, socio-economic survey, and census duties, had affected efforts to strengthen revenue collection.
