What the B‑Khata to A‑Khata Scheme Entails

B‑Khata to A‑Khata Rebate Ends, Bengaluru’s Revenue Gap Widens as Gadag’s PPP Hub Takes Off

The Greater Bengaluru Authority (GBA) recorded 60,000 applications for converting B‑Khata properties to A‑Khata, but the 60 % rebate on conversion charges expired on 13 August, leaving city corporations with a projected shortfall of over ₹500 crore. At the same time, the Gadag‑Betageri Business Centre, a 35‑acre public‑private partnership (PPP) project, entered its second bidder consultation, signalling a push to revive regional trade and employment.

The conversion scheme allows owners of un‑approved “B‑Khata” plots to obtain an “A‑Khata” title, which unlocks bank financing, resale value and municipal services. Initially, conversion charges were set at 5 % of the guidance value; a steep public response prompted a temporary reduction to 2 % until 23 August.

• ▸The rebate period attracted 13 000 applications in the last five days, raising total applications to 60 000.
• ▸Estimated revenue from all applications, at the full 5 % rate, would be ₹402.21 crore.
• ▸Bengaluru’s six‑lakh B‑Khata properties represent only about 10 % of owners who have applied so far.

The scheme is administered by the Urban Local Bodies of the Greater Bengaluru Authority, which rely on conversion fees as a non‑tax revenue source.

Revenue Shock for City Corporations

North Bengaluru City Corporation received the bulk of applications—17 460 requests worth ₹115 crore—yet its budget had projected ₹680 crore from the scheme. The rebate cut the expected inflow dramatically, forcing all corporations to seek alternative revenue streams.

• ▸West Bengaluru Corp. logged 17 104 applications, potentially generating ₹99.30 crore.
• ▸Central Bengaluru Corp. recorded only 591 applications, reflecting its limited B‑Khata stock.
• ▸The rebate reduced the north corporation’s projected revenue from a possible ₹300 crore (at 5 %) to roughly ₹115 crore.

These figures expose the fragility of municipal finance that leans heavily on ad‑hoc levies rather than stable tax bases.

Why the Shortfall Matters for Municipal Fiscal Health

City corporations in India often face a Fiscal Deficit at the local level, compensated by state transfers and market‑based borrowing. The sudden revenue gap threatens ongoing infrastructure projects, including road widening and waste‑management upgrades, and may compel corporations to raise property taxes or seek higher state grants.

• ▸Municipal bonds, a growing financing tool, become riskier when revenue streams shrink.
• ▸The shortfall could push the state to re‑allocate funds from other urban schemes, such as the National Investment and Infrastructure Fund.
• ▸Persistent deficits undermine the credibility of the Five-Year Plans (India) framework, which still guides long‑term capital allocation despite the shift to annual budgeting.

Gadag‑Betageri Business Centre: PPP in Action

While Bengaluru grapples with revenue loss, the Gadag district is mobilising private capital under a PPP model to develop a multi‑sector commercial hub. The project, overseen by the Gadag‑Betageri Trade, Culture and Exhibition Authority, aims to host a five‑star hotel, convention hall, textile centre and a children’s entertainment zone.

• ▸The site spans nearly 35 acres on land earmarked by the state government.
• ▸An Expression of Interest (EOI) invited private investors to submit proposals by 10 September.
• ▸The phased implementation envisions a blend of commercial, tourism and cultural facilities, leveraging Gadag’s historic cotton trade legacy.

The PPP approach obliges private partners to share profit motives with public service obligations, a balance articulated in the Public-Private Partnership framework.

Connecting the Dots: Economic Planning and Local Finance

Both the B‑Khata conversion and the Gadag business centre illustrate how sub‑national units operationalise the broader agenda of Indian economic planning. The legacy of the Five-Year Plans (India)—centralised, multi‑year resource allocation—has gradually given way to market‑driven, project‑specific financing. Yet, municipal bodies still depend on one‑off levies, exposing them to volatility.

• ▸The conversion scheme’s reliance on a temporary rebate mirrors ad‑hoc fiscal stimulus rather than systematic revenue reform.
• ▸Gadag’s PPP project aligns with the national push for infrastructure under the National Investment and Infrastructure Fund, aiming to attract private capital while reducing fiscal strain on state budgets.
• ▸Both cases underscore the need for a more resilient municipal revenue architecture, possibly through property tax reforms, user‑charges, and broader adoption of municipal bonds.

Policy Implications and the Way Forward

Policymakers must reconcile short‑term revenue exigencies with long‑term fiscal sustainability. For Bengaluru, reinstating a modest conversion fee post‑rebate, coupled with a transparent valuation methodology, could restore a steady income stream. Simultaneously, expanding the Urban Local Bodies’ capacity to issue municipal bonds would diversify financing sources.

In Gadag, ensuring that private partners adhere to quality standards and community‑service clauses will be crucial to avoid the “profit‑only” pitfall that has plagued some PPP ventures. A robust monitoring mechanism, possibly through an independent oversight board, can safeguard public interests while delivering the promised economic uplift.

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