BDA renews efforts to collect betterment fees in Bengaluru, targets principal of over ₹3,000 crore

Bangalore Development Authority (BDA) has renewed efforts to collect betterment charges from land ‘notified and later left out’ from the layout scheme in 22 layouts it has developed in Bengaluru. BDA has been trying to mop up over ₹3000 crore in betterment charge from these properties for a decade now, but has failed to collect the money.

On February 25, BDA issued a public notice in this regard. Sources in BDA said the board may move ahead with stern measures, like demolitions and auction properties of owners who fail to pay the fee. 

Efforts to collect betterment fee in these layouts started in 2015. Then Chief Minister Siddaramaiah had announced a scheme to regularise ‘encroachment of BDA land’ in lieu of betterment fee of nearly ₹3500 crore. This mainly targeted 2,262 acres dropped from Arkavathi Layout scheme, and 610 acres dropped from Nadaprabhu Kempegowda Layout scheme.

BDA is also collecting betterment fee for properties left out of the layout scheme at K. Shivaram Karanth Layout, the latest layout it has developed.

The public notice issued on February 25, however, focuses on the old layouts where there are betterment fee arrears.

Since these landowners are also beneficiaries of the development activities, like roads, drainage, streetlights, and water, taken up by BDA, they are bound to pay a betterment fee as per the BDA Act, 1976.

Betterment fee is fixed as one-third of the rise in guidance value of the land in the area after the formation of the layout. 

However, this was challenged in courts, and most land owners did not pay betterment fees in the last decade. Sources in BDA said Comptroller and Auditor General (CAG) reports have also flagged the authority’s failure to collect betterment fee amounting to ₹3,000 crore from 22 layouts, and the issue is now before the Public Accounts Committee (PAC).

Following BDA winning several verdicts in its favour, the authority has again started efforts to collect betterment fee. 

BDA is building the Bengaluru Business Corridor and a short tunnel and rotary flyover on the Hebbal – Mehkri circle stretch among other projects for which it is on a drive to mop up funds.

Property-owners demand penalty waiver

BDA Act, 1976, states that property owners have to pay a betterment fee within 90 days of it being notified, and any delay will attract a 2% penalty every month.

BDA is now keen on collecting betterment fee from landowners of ‘left out’ properties in these 22 layouts, along with interest and penalty from the date of notification of betterment fee over a decade ago.

“The principal alone is expected to fetch ₹3,000 crore. Including penalty and interest will take that amount to several times the principal. There is a demand from property-owners to waive off interest and penalty. But, we do not have that discretion,” a senior BDA official said. 

G. S. Sridhar, whose house in a private layout developed on land dropped from the Arakavathi Layout scheme at Jakkur, said the betterment fee for his 30X50 plot adds up to ₹5.04 lakh. The penalty and interest would peg the total amount at over ₹20 lakh. “Like the government of Karnataka gave a One Time Settlement (OTS) scheme for property tax and water bill arrears, where only principal was paid and penalty and interest was waived off, an OTS should be provided for us as well,” he urged.