Discount for conversion of B-Khat to A-Khat will hit corporate budgets

Only 949 B-Khats have been converted to A-Khats since 15 October 2025 when the system was introduced in the Greater Bengaluru area. | Photo credit: File photo

The 60% discount on charges for converting B-Khat to A-Khat, announced by Deputy Chief Minister and Bengaluru Development Minister DK Shivakumar on May 13, has dented the Budget Estimates (BE) of the five corporations submitted only a month ago.

Earlier, the fee was set at 5% of the indicative value of the land to be legalized, but it has now been reduced to 2% for a 100-day window due to lack of interest in the scheme.

As of 15 October 2025, when the scheme was introduced in the Greater Bengaluru Area (GBA), only 949 B-Khatas have been converted to A-Khatas, generating an income of ₹52.35 crore. The GBA received a total of 11,916 applications for an estimated 7 lakh B-Khata properties in the city.

The five corporations together estimate a revenue of ₹ 1,700.5 crore in 2026–27 from this source. If the 60% discount is applied to all properties, the amount comes down to ₹680.5 crore.

Ironically, the Bengaluru City North Corporation in its budget estimated to collect ₹680 crore in revenue from the Khata conversion scheme.

While this will hit the estimated revenue of corporations, the recent final notice to the Building Regulations, where the maximum permissible deviation that could be penalized has been increased from 5% to 15%, is expected to generate more revenue for corporations. However, no estimate is available.

Srikanth Vishwanathan, CEO, Janaagraha Center for Citizenship and Democracy, and a municipal finance expert, said the state government should ensure policy continuity and protect revenue streams for urban local bodies (ULBs). “More than a decade ago, the corporation was expecting an income of ₹1,000 crore every year from Akram-Sakram and not a single rupee has materialised. Such practices undermine the integrity of budgets. The state has recently approved these five budgets, which means it has approved these estimates. If the state wants to give a discount now, it must ideally make up the difference,” he said.

The north and west were the most affected

As B-Khata properties are still the order of the day in the suburbs of the city, the corporations covering these areas are estimating higher revenue from this source. It accounted for 20% of North Corporation’s own revenue and 17% of West Corporation’s revenue. The discount will hit them the hardest.

But those companies are now going into special drive mode to target double the number of properties they had hoped to convert this year to protect their earnings.

KV Rajendra, Commissioner, Bengaluru City West Corporation, said their budget estimate to collect ₹563 crore from the source was based on a target to convert 15,000 properties this fiscal, out of a total of three lakh B-Khata properties. “We estimate that each property will pay anywhere between ₹3 to ₹5,000 on average. Now it will be less than ₹2,00,000, we have decided to do a special promotion to convince property owners with large plots to take advantage of the discount window. We are targeting 30,000 properties to convert to earn ₹600,000.”

Bengaluru City North Corporation Commissioner Pommala Sunil Kumar said the North Corporation will also take the same route and undertake a special drive to target double the number of properties in this fiscal than they initially thought. “We estimated that we could cover 22,000 properties this fiscal, now we will work to cover double that,” he said.

Published – 21 May 2026 19:14 IST