Bengaluru's new civic bodies enter second year without fresh revenue streams

A year after the Bruhat Bengaluru Mahanagara Palike (BBMP) was split into five separate corporations, the new civic structure has failed to meaningfully expand its revenue base, leaving the fiscal disparities that emerged from the restructuring largely unaddressed.

When the division was planned, the Brand Bengaluru Committee had flagged that the North and West corporations would have the lowest property tax collections — estimated at ₹543 crore and ₹580 crore respectively. Property tax remains the primary revenue source for all five bodies. At the time, the then Bengaluru Development Minister D.K. Shivakumar had assured that the government would provide financial support and that the new commissioners would explore fresh revenue avenues.

A year on, officials concede that while property tax collection has been strengthened, no significant new income sources have been created. The first budgets of all five corporations, each with an outlay exceeding ₹3,500 crore, largely followed a uniform template rather than introducing innovative measures.

Three revenue streams were initially seen as promising: advertisement revenue, premium Floor Area Ratio (FAR), and the conversion of B-Khata properties to A-Khata. Of these, the B-Khata conversion scheme drew a poor response. The government had expected around six lakh properties to apply, but only about 12,000 applications came in initially. Even after the conversion charge was cut from 5% to 2% of guidance value — a 60% rebate — only 80,400 applications had been received by end-August, just 13.4% of the target.

Meanwhile, revenue from premium FAR and advertisements has picked up but is now earmarked for B-SMILE, the special purpose vehicle handling big-ticket infrastructure projects. The North Corporation, for instance, collected ₹185 crore from premium FAR, but the entire sum was transferred to the SPV, leaving the corporations without direct benefit.

Paid parking, another hoped-for source, succeeded only in the Central Corporation, which rolled it out on ten roads and at K.R. Market. Other corporations struggled to attract even a single bidder. New parking rules introduced by the Urban Development Department have drawn public criticism, and towing operations are currently running at a negative cash flow.

On the positive side, property tax collection has improved. The five corporations have a combined target of over ₹6,700 crore for 2026-27 and had collected ₹3,372.48 crore by August 22. This was achieved by bringing roughly 18,000 additional properties under the tax net, pursuing defaulters, and recovering arrears. Officials say collections could improve further with increased staff strength.

GBA Chief Commissioner M. Maheshwar Rao noted on Wednesday that surveys, including the SIR, socio-economic survey, and census duties, had diverted staff from revenue work.

Despite these efforts, the West Corporation continues to face financial difficulties. The corporations are also yet to receive over ₹800 crore in aid recommended by the 15th State Finance Commission. The government has, however, released maintenance funds three times by end-December 2025. According to a corporation commissioner, civic bodies are executing works first and claiming reimbursement later, with budget outlays structured on that basis.