Karnataka MLA questions BDA’s plan to borrow Rs 1,000 crore amid Model Code of Conduct

Bengaluru: Rajajinagar MLA S Suresh Kumar has written to the Chief Electoral Officer, Karnataka, seeking his intervention in the Bangalore Development Authority’s (BDAs) plan to borrow Rs 1,000 crore from a nationalised bank. 

He wondered why the planning authority wanted to raise such a huge loan when the model code of conduct was in force. In his letter, the BJP legislator also suspected the money could be used to “influence” voters in the guise of making payments to
contractors.

He sought suitable directions to the BDA so no loan was raised until the Lok Sabha polls were over. 

Mortgaging real estate

The proposal to borrow a large amount of loan by mortgaging corner sites of the Nadaprabhu Kempegowda Layout has also been opposed by people who bought sites in the
Kempegowda Layout. 

DH was the first to report the development in its edition dated April 4, 2024. 

As per the proposal, the BDA plans to borrow Rs 1,000 crore from nationalised banks by mortgaging 2,500 vacant corner sites in the Nadaprabhu Kempegowda Layout. This is the first the agency is considering raising bank loans by mortgaging its real estate. 

Financial losses due to delays in allotting sites in the Dr Shivaram Karanth Layout are said to have prompted the loan decision. 

Sources insist there is no need to take the loan because the BDA can easily collect Rs 1,000 crore in betterment charges from owners whose properties have been dropped from acquisition for the formation of the Shivaram Karanth Layout.

A government agency collects betterment charges for creating infrastructure such as roads and drainage, among others, in a residential layout. 

The regularisation process helped as many as 5,781 sites, one high-rise building, 13 layouts and 11 institutions. They also stand to gain as the BDA is creating infrastructure in and around these buildings by investing over Rs 6,000 crore, the sources pointed out. 

While the BDA has already raised about Rs 100 crore, it has not undertaken any effort to collect betterment tax from the owners whose properties are regularised, despite Supreme Court directions.