Karnataka Budget 2017-18: Key proposals that will impact Bengaluru’s property market


The Karnataka government presented the state budget for 2017-18, on March 15, 2017. We look at the key provisions for the real estate sector

The honorable chief minister of Karnataka, tabled the State Budget 2017-18 in the assembly on March 15, 2017. Below are the key provisions that may have a direct or indirect impact on Bengaluru’s real estate sector.

Housing
  • 1 lakh residential units for the urban poor to be constructed by utilising the amount realised from sale of plots/houses, developed in an area of 25% of the available land.
  • Bangalore Development Authority (BDA) to construct 3,000 flats, allot 5,000 sites in Nadaprabhu Kempegowda Layout.
  • BDA to develop an innovative township spanning 166 acres in Konadasapura.
Commercial, industrial, information technology
  • Development of commercial hubs in 5 locations along 10.7 kms of a major arterial road connecting Mysore Road and Magadi Road, through Kempegowda Layout.
  • Rs 400 crores to the Karnataka Industrial Area Development Board (KIADB), for land acquisition on Tumakuru Industrial node, under the Chennai-Bengaluru-Chitradurga Industrial Corridor.
  • Establishment of a ‘Centre of Excellence in Data Sciences and Artificial Intelligence’ and ‘Cyber Security’ Centre.
  • Construction of an international level science gallery and artificial intelligence and robotics centre at Bengaluru.
Infrastructure
  • Development of 150 km roads in and around Bengaluru, through Karnataka Road Development Corporation Limited (KRDCL).
  • Metro Rail – Phase 2 (A): Additional new line (17 kms) from Silk Board to KR Puram.
  • Development of a second runway and terminal at Kempegowda International Airport.
  • Construction of an underpass and widening of the flyover along ORR at Hebbal junction.

See also: What makes Bengaluru an ideal investment destination?

 

Colliers Research view

In line with the central government’s agenda to provide ‘Housing for All by 2022’, Karnataka’s state budget 2017-18 too emphasises housing for the poor. In our opinion, the provision to construct 1 lakh houses in Bengaluru is a welcome move, to resolve urban housing shortage in the city. However, the key lies in its on-ground implementation.

With the city’s physical infrastructure under the spotlight due to unchecked urbanisation, measures to enhance connectivity have also received due attention in the budget. We believe, the infrastructure planned along Outer Ring Road, is likely to provide impetus to the real estate sector in nearby micro-markets such as KR Puram and Hebbal.  

Initiatives, such as the construction of an arterial road between Mysore Road and Magadi Road, as well as a new township at Nadaprabhu Kempegowda Layout, will enhance the attractiveness of Kengeri. Development of Tumkur as a satellite city, will also bode well for inviting new industries and stimulate the creation of the new industrial corridor underway. A new innovative township at Kondasapura will further enhance attractiveness of peripheral locations and help in the development of an organised housing market in the surrounding district.

 

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