16 March 2017

Karnataka State Budget 2017-18; Key proposals that are likely to influence Bengaluru real estate sector

The Honorable Chief Minister tabled the Karnataka State Budget 2017-18 in the Assembly on 15th March 2017. Below are key provisions in the state budget that may have direct or indirect impact on Bengaluru real estate.

Key Highlights


  • 1 lakh residential units for Urban Poor to be constructed by utilising 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 Innovative Township spanning 166 acres in Konadasapura

Commercial, Industrial, Information Technology

  • Development of commercial hubs in 5 locations along 10.7 kms major arterial road connecting Mysore Road and Magadi Road through Kempegowda Layout

  • INR 400 crores to Karnataka Industrial Area Development Board (KIADB) for land acquisition on Tumakuru Industrial node under Chennai-Bengaluru-Chitradurga Industrial Corridor

  • Establishment of ‘Centre of Excellence in Data Sciences and Artificial Intelligence’ and ‘Cyber Security’ Centre

  • Construction International Level Science Gallery and Artificial Intelligence and Robotics Centre at Bengaluru

  • 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 K.R. Puram

  • Development of second runway and terminal at Kempegowda International Airport

  • Construction of underpass and widening of flyover along ORR at Hebbal junction

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, 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 micromarkets such as K.R. Puram and Hebbal.

We expect that the 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 location 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 the location attractiveness of far off peripherals and help in the development of an organised housing market in the surrounding district.

Contact for more information

Colliers International | Mumbai, Indiabulls Finance Centre, 17th Floor, Unit No. 1701, Tower 3, Senapati Bapat Marg, Elphinstone (W), Mumbai 400 013, Maharashtra, India | Tel: +91 022 4924 9780