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Der öentliche Sektor - e Public Sector Vol. 42, No. 1 2016110
Vol. 42, No. 1 2016 Der öentliche Sektor - e Public Sector 111
Regulation in a crony capitalist state:
The case of planning laws in Bangalore
Sony Pellissery, Anirudh Chakradhar, Deepa KS, Mounik Lahiri, Navyasree S Ram,
Neha Mallick, Niraj Kumar, Pratik Harish
Abstract
The city of Bangalore came up with a draft structural plan 2031 to accommodate the emerging challenges of urban growth,
congestion and environmental concerns through planning and regulation. In the decade 2000-2010, when the city opened
itself to the booming IT industry, its developmental response to the pressures of growth has been through policy measures
like airport relocation, introduction of metro rail, satellite township development, trac improvement projects and revenue
layout development. This paper focuses on regulatory evolution in the period 2000-2015 and the way the city regulations
changed to accommodate this process.
The study aempts to understand what drives planning regulations in Bangalore. The literature on the changes in planning
laws in capitalist contexts such as European cities informs us that demands for changes in planning were made by creative
class and the political class responded to the same in the interest of the city. In this backdrop, we examine the impact of
private sector participation in the city planning and regulation in Bangalore city. Through an analysis of recent changes in
the planning laws and the infrastructural regulations, we argue that rent-seeking interests engineered through the nexus of
politician-realtor class have driven the regulatory changes in Bangalore.
Keywords: Bangalore, Regulation, Revenue layout, Urban growth
Introduction
The public debates on land issues in South Asia, in recent
times, have been around the discourses of private property
and dispossessions through state-facilitated land acquisitions
(Baviskar 2010). These discourses, in the context of urban
property, have to be understood in the context of two pha-
ses of developmental orientations. First, post-independent
India, since 1947, has carried out a city-centric growth mo-
del through a state-led centralised planning approach (Koh-
li 2004) by neglecting rural areas where majority of Indian
population resided (rural population: 1951 – 82.7%; 1991 –
74.4%; 2011 – 68.8%). Second, since the era of economic li-
beralisation in 1991, increased investments for businesses,
particularly focusing on urban hubs in developing coun-
tries have led to signicant spatial restructuring through a
market-led process. By 2031, Indian urban population will be
over 600 million (about 40% of Indian population), and how
cities are planned and managed today is going to determine
the quality of life in the future.
In the context of rapid infrastructural changes, this paper
aempts to understand what drives the planning regulati-
ons in Bangalore, one of the fastest growing cities in India.
To answer the question we examine the case of a key infra-
structural change, namely ‘revenue layout’, a deviation from
planned residential infrastructural development. ‘Revenue
layout’ refers to quasi-legal property that is formed on agri-
cultural land. In other words, the approval from a competent
authority for the required conversion from agricultural pur-
pose to residential purpose is not full and thus, quasi-legal
status exists. The vagueness in the legal status of a property
enables politicians to extract rents from property owners on
a continuous basis. The weakness of regulatory capacity and
the limitation of planning laws in crony capitalist states are
the key arguments this paper advances.
In the rst section, an overview of the urban sprawl is provi-
ded by showcasing the magnitude of urban challenges. Then,
an overview of the evolution of planning laws and bodies re-
sponsible for urban planning is provided primarily aiming at
the readers who may be new to Indian planning system. After
these two introductory sections, the case of revenue layouts
and driving forces behind such developments is analysed. To
Der öentliche Sektor - e Public Sector Vol. 42, No. 1 2016112
S. Pellissery, A. Chakradhar, D. KS, M. Lahiri, N. S. Ram, N. Mallick, N. Kumar, P. Harish
develop the argument of how politician-realtor nexus paraly-
ses the planning regulations, we analyse two sources of infor-
mation. First, we systematically look at two master plans and
associated planning bodies responsible to implement these
plans. Second, we critically analyse the practices of urban
development particularly around revenue layout expansion.
Here, we depend on evaluation reports, newspaper reporting
and case laws.
The urban sprawl in
Bangalore
After the liberalization of Indian economy in early 1990s, the-
re was a constant ow of investment toward India. Indian
economy has since then seen a dramatic change in the growth
of urban areas that were the hubs of these frantic transnati-
onal market activities. Cities aracted more population due
to the improved infrastructure and investment opportunities
resulting in large scale migration from rural areas. The idea
of a secure job for the Indian middle class changed from ex-
clusive government jobs in the 1960s to the growing IT based
engineering jobs. The city of Bangalore in the south of India
(in the state of Karnataka) was the epicentre of these deve-
lopments, metamorphosing from a quiet green cantonment
town to the ‘Silicon Valley’ of India.
Bangalore is the fastest growing city in India in terms of its
population growth, having added an estimated 46% to its
count over the last decade (Census 2011)1. The estimated
population in the city municipality area, called Bruhat Ben-
galuru Mahanagara Palike (BBMP), as per the 2011 census is
84.74 lakhs2, up from 45.92 lakhs in 2001 with a correspon-
ding increase in area from 254 sq km to 800 sq km. The popu-
lation density in Bangalore Metropolitan Area has also seen
proportionate increment in the past decade from a mere 2985
1 Bangalore is the third most populous city in India and the 18th
most populous city in the world.
2 1 lakh=100,000 persons
Source: Compiled and computed by the authors, using the basic data in Census 2001.
Notes: (a) Annual growth rate refers to compound average annual growth of population during 1971-1981, 1981-1991, and
1991-2001. (b) UAA refers to urban agglomeration area. (c) Class I cities are those with population size of 0.1 million and
above.
Indicators
1981
1991
2001
Bangalore UAA1
Total population (million)
2.9
4.13
5.69
Total area (km2)
365.65
445.91
531.00
Decadal growth of population (%)
76
41.36
37.69
Annual growth rate (%)
5.8
3.52
3.25
Density of population (per km2)
7991
9263
10710
Urban Karnataka
Annual growth rate (%)
2.37
2.63
2.57
Share of Bangalore UAA in urban Karnataka (%)
27
29.70
31.73
Urban India
Annual growth rate (%)
3.79
3.14
2.77
Share of Bangalore UAA in urban India (%)
--
1.90
1.99
Size class of cities
Share of Bangalore UAA in Class I cities in Karnataka (%)
46
45.90
47.22
Share of Bangalore UAA in Class I cities in India (%)
3.04
2.91
2.90
Share of Bangalore UAA in Million plus cities in India (%)
6.94
5.85
5.27
b
Tab. 1. Trajectory of Urbanization in Bangalore- 1991 -2001 a
The data for 2001 is the latest data available from the government sources on urban agglomeration. Results from 2011 are
still awaited.
a
The Bangalore Metropolitan Area is the metropolitan area comprising the erstwhile Bangalore city corporation and canton-
ment area. The city had an urban and rural taluk which were regrouped as Bangalore Metropolitan Area in 1986. This is the
term used in all plan documents of Karnataka and these are the gures given in the text.However, to understand the urban
sprawl especially the growth of industries in the periphery, Urban agglomeration is the unit of analysis given in the Census
of India data since 1971.
b
Vol. 42, No. 1 2016 Der öentliche Sektor - e Public Sector 113
Regulation in a Crony Capitalist State: e Case of Planning Laws in Bangalore
per square km in the year 2001 to now 4378 per sq km in the
year 2011.
These demographic changes have put tremendous pressure
on resource distribution, especially that of land availability.
The emergence of satellite towns on the periphery of the city,
the relocation of public transport hubs like the airport, met-
ro and the B Trac3 and revenue layout development have all
been unique ways in which Bangalore has responded to this
transformation. As a result, seven neighbouring city munici-
pal councils, one municipal town and 110 villages were mer-
ged into Bangalore in 2007. The last available city proling of
2001 had already placed it as the fth biggest urban agglome-
ration area (UAA) in India. Table 1 summarises the trajectory
of urbanization in Bangalore during last three decades.
The rapid growth of Bangalore has been accompanied by a
constant expansion of residential and commercial land de-
velopment outside the Bangalore Metropolitan Area, leading
3 B Trac 2010 is the government initiative to manage trac conges-
tion in Bangalore through modern technology system.
to displacement of population from the core area to the outer
zone. For instance in 2010, 15,416 dwelling units were absor-
bed against 13,413 in the previous year. 264 sqft per minu-
te was additionally built up in Bangalore between 2006 and
2012 (Bharadwaj 2015) There were regional disparities in the
nature of urban growth in Bangalore. The north and south
of Bangalore saw maximum localities reporting rising land
values, which eventually led to increase in urban sprawl in
the Metropolitan Area.
One of the notable changes in the land use paern due to
urban sprawl is what is locally described as ‘garden city to
garbage city’. Bangalore had 280 lakes in 1960. These lakes
used to be the elixir to keep Bangalore as a garden city. As
of 2012, Bangalore has only 17 lakes. Most of the lakes were
encroached upon by realtors for land. A looming crisis for
water is overshadowing the sparkling growth of Bangalore.
In the context of this urban sprawl, this paper demonstrates
how the planning regulations emerge from the rent-seeking
interests of politicians because of their nexus with realtors.
Source: geospatialworld.net
Map 1. Land Use Change due to Urban Sprawl in Bangalore (1973-2010)
Evolution of planning laws
in Bangalore
The rst major legislation in Karnataka for urban planning
and development came in the form of the Karnataka Town
and Country Planning Act, 1961. This was done with the
belief that physical planning had to precede economic pl-
anning as otherwise cities, towns and villages would grow
to unmanageable sizes without proper planning, resulting
in unhealthy surroundings. This act therefore promoted the
regulation of planned growth of land use and development
and for preparing and executing town planning schemes.
The state then went on to enact the Karnataka Municipalities
Act 1964 in order to manage the aairs of the towns and cities
of the state.
Over the years, through multiple legislations, multiple agen-
cies began to exercise jurisdiction over the city of Bangalore
with some of them having overlapping functions. These in-
cluded authorities such as the Bangalore Metropolitan Cor-
poration (1945), the City Improvement Trust Board (1945),
Der öentliche Sektor - e Public Sector Vol. 42, No. 1 2016114
S. Pellissery, A. Chakradhar, D. KS, M. Lahiri, N. S. Ram, N. Mallick, N. Kumar, P. Harish
the Karnataka Industrial Area Development Board (1966),
the Housing Board (1956) and the Bangalore City Planning
Authority (1961). A need was felt to establish a common au-
thority in order to coordinate development activities. The
BDA (Bangalore Development Authority) was thus setup
through the enactment of the Bangalore Development Act
1976 in order to bring together the functions of the City Plan-
ning Authority and the City Improvement Trust Board. Thus,
the BDA became the body for plan preparation, enforcement
as well as implementation. The Act however did not bring
much improvement as the jurisdiction of the BDA was not
coterminous with that of the Metropolitan Area. This meant
that local bodies like BDA (1976), Bangalore Water Supply
and Sewerage Board (1964), Karnataka State Road Trans-
port Corporation (1961), Karnataka Electricity Board (1970),
Karnataka Slum Clearance Board (1975) and Bangalore City
Corporation (1945) saw very lile coordination. This led to
the formation of the Bangalore Metropolitan Area Develop-
ment Authority in 1985 which had jurisdiction over both the
Bangalore Metropolitan Region, as well as surrounding rural
areas.
None of these many bodies is constitutionally mandated to
carry out planning functions. The absence of a constitutional
mandate for planning made them less accountable in car-
rying out planning regulations. After a long bale with the
government by the civic activists, and a favourable decision
from the High Court, government was forced to set up a con-
stitutionally mandated Planning Commiee for Bangalore in
2014 namely, Bangalore Metropolitan Planning Commiee
(BMPC). However, government found this institutional ar-
rangement as a challenge to the politician-realtor nexus, since
the new body had limited participation of members of legis-
lative assembly , whose real estate interests were pushing ha-
phazard development in Bangalore. One of the ways to rein-
state the power balance of crony capitalism was to appoint a
minister for ‘Bangalore Development’ who would make sure
interests of politicians are rst met than the planning require-
ments (Bharadwaj, 2016).
The history of planning in Bangalore has been of a kind that
has exuded chaos and delays in which the rst phase was
predominated by planning. The rst development plan for
Bangalore was the Outline Development Plan (ODP) for the
Metropolitan Region, adopted under the 1961 Act. This plan
was prepared for a period of fteen years from 1961-76; how-
ever it was approved by the government only in 1972. This
plan divided the city into two areas of a total of 500 sq. km. of
which the outer ring was to be conserved as a green belt. In
the meanwhile, the BDA in 1974 was tasked with the duty of
preparing a Comprehensive Development Plan (CDP) to suc-
ceed the Outline Development Plan. However, this did not
take place till 1984, making the Outline Development Plan
the governing plan for a full eight years past its period, and
by then the natural growth of the city had already encroa-
ched the green belt (see Map 1), resulting in large scale un-
authorized development. The Comprehensive Development
Plan was enacted for a period of fteen years from 1986-2001,
and extended the planning area - inclusive of the new green
belt area and a new conurbation area which absorbed the en-
croachments in the old green belt - to a total of 1279 sq. km.
Up until 1991, Bangalore City development plans were man-
dated to be prepared once every ve years under the 1961
Act. In 1991, an amendment was brought to this legislation
to increase the time period to ten years. The Bangalore Met-
ropolitan Region Development Authority has since prepared
two structure plans, one with a period up to 2011, and ano-
ther draft that has been in preparation from 2008, and will be
in force until 2031. A comparative analysis of these two plans,
gives an idea of the shifting priorities for the city planning of
Bangalore over time, and since this planning usually lays the
ground work for a lot of land and urban policies, it becomes
hard to ignore.
A blue print for the
expansion of Bangalore
A structural plan is a perspective plan that aempts to integ-
rate two axes of planned development- the levels of planning
from national to the sub national and local level and the con-
cerns of planning like social, economic and environmental.
Structural plans have been identied in the Indian planning
context as the tool to tackle regional disparities. For instance,
Bangalore is the only metropolitan region and megacity in
the state of Karnataka. To address the disparity of urban de-
velopment in this region and balance it with the hinterland,
structural planning was thought of as necessity. Secondly,
the development of other regions not only vis-a-vis Banga-
lore, but also as independent selement required long term
planning.
The structural plan 2011 for Bangalore Metropolitan Region
(BMR) was rst developed in 1997 and received approval in
2005. This plan conceived the BMR and South Karnataka Re-
gion as separate but contiguous entities. The South Karnata-
ka Region constituted six districts around Bangalore Metro-
politan Region namely Bangalore, Tumkur, Hassan, Mandya,
Mysore and Chamraj Nagar with a total area of 50,555 sq km
and a population of 203 lakhs in 2001 (BMRDA 2011: 12). The
Bangalore Metropolitan Region has three districts called Ban-
galore Rural, Bangalore Urban and Ramanagaram.
The mission statement of Structural Plan 2011 says:
The mission of the integrated South Karnataka Region and
Bangalore Metropolitan Region development strategies is to
change the landscape of investment opportunities of Sou-
thern Karnataka so that development is appropriately mana-
ged in the Bangalore Metropolitan Region and successfully
promoted in the surrounding South Karnataka Region the-
reby creating more equitable and sustainable regional eco-
nomic conditions and growth prospects. (BMRDA 2011: 27)
The 2011 structure plan aempted to make Bangalore in-
vestor friendly, but also decentralize industry into the areas
surrounding Bangalore, so as to retain the primacy of Ban-
galore. At the same time it also aempted to decongest and
reduce the burden on the city, while containing its outward
growth. For this it chose to break the surrounding region into
six Interstitial Zones and ve Area Planning Zoneswith their
own local planning authorities. Within these regions, it also
tried to push industry and investment toward the more water
plenty South-Western Areas.
Vol. 42, No. 1 2016 Der öentliche Sektor - e Public Sector 115
Regulation in a Crony Capitalist State: e Case of Planning Laws in Bangalore
The 2031 Plan (revised version of the 2011 Plan) (BMRDA
2011) signicantly diers from the earlier version and sheds
light on the changing contours of planning objectives. For in-
stance, the mission statement reads thus,
To promote the region’s ecological and cultural values while
seeking optimum land utilization suited to its capability
for sustained balanced economic production and inclusive
growth by inducing agglomeration economics and clustered
development through a decentralized planning and gover-
nance system (MRDA 2011: 12)
The 2031 Plan which has been drafted with the help of pri-
vate participation focuses more on issues such as environ-
mental sustainability, public participation, transparency and
accountability. Thus while the previous plan focussed on at-
tracting investment and spreading it in the right areas, this
plan is focussed more on governance and making sure the
city runs in an economically and environmentally sustaina-
ble manner. The mode chosen is also dierent. Plan does not
use development zones that the previous plan did, but rather
delineates eight economic cluster zones, and four growth no-
des that will fuel development on the outskirts of Bangalore
in a planned manner, restrict further migration to the core
city, and also maintain the environmental characteristics of
the surrounding regions. It also zoned land into either of
possible urbanisation, industrial, agricultural or conservati-
on zone and delineated the zonal regulations, ensuring also
that there will be no urban encroachment into ecologically
sensitive zones.
The 2031 Plan also suggests a land allocation strategy sup-
porting mixed use and having adequate infrastructure to en-
sure compact development. It also suggests the designation
of certain lands on urban fringes as transition zones, for urba-
nization in case of stress post 2031, so that any encroachment
on such land can also be more easily accommodated and assi-
milated. In order to tackle the growing housing decit, it sug-
gests the supply of government land in the nodes and clus-
ters for development in partnership with the private sector,
and a change in the functioning of the Karnataka Housing
Board in order to make it a facilitator and joint partner with
the private sector. The same ‘innovative’ housing solutions
have been suggested along with the similar changes in rent
control, and a ‘pragmatic policy’ of formalizing or regulari-
zing unauthorized development.
Revenue layout is the most demonstrable case of how unau-
thorised developments were permied to serve the interest of
politician-realtor nexus.
Revenue layout
development in Bangalore
The Bangalore Metropolitan Area falls into three types of lay-
outs: BDA layouts that are called planned layouts, private
layouts that are built by private players respecting the zoning
norms and organically grown revenue layouts. BDA layouts
are completely planned with access to main roads and arte-
ries of adequate width, transportation hubs, sites that are set
apart for schools, hospitals, parks and greenery. BDA layouts
had been acquired through the legal principle of eminent do-
main of the state. Property owners in BDA layouts benet
from what is known as ‘pre serviced utility connections’ (wa-
ter, electricity, power and sewer lines) which are arranged
by the BDA, in accordance with the land planning and deve-
lopment norms. There are 62 BDA layouts, each of about two
hectares and around 200,000 sites made so far in Bangalore
(Venkataraman 2013). However, due to the monopoly that
BDA assumed in providing housing sites since 1980s, the ‘le-
gal’ housing provided by the BDA also became non aorda-
ble to various sections of the society.
Outside the prism of property laws and planning regulati-
ons, there exists a world of illegality in land use and housing
that negotiates with the planned and legal spaces of the city.
Development of revenue layout is a direct oshoot of the
inadequacy of the government to provide housing and the
usurping of the private players to take on this role through
the natural growth of the market. ‘The term “revenue lay-
outs” is used generically to represent quasi-legal layouts that
are formed on agricultural land without proper approvals
from the concerned planning authorities under the relevant
laws’(ALF Report 2003: 96). Revenue layouts have been sys-
tematically and organically forming a part of cities like Ban-
galore since the 1970s by sub dividing agricultural land in
the periphery without regard to zoning regulations, layout
norms and building codes.
With the increasing pressure to accommodate migrants who
came to the city with the IT boom, a middle way was found to
convert agricultural land in the periphery to residential lay-
outs by exploiting a loophole in the Karnataka Land Revenue
Act . There are three distinct types of revenue layouts formed
in Bangalore. The rst is one in which for certain specic pur-
poses, land use conversion is permied by paying the Depu-
ty Commissioner (locally known as ‘DC Converted’), who is
the ocer in charge, a ‘conversion charge’ and obtaining a
No Objection certicate from BDA. Revenue layouts formed
through this manner apply their land use under Gramthana
and plantation category which is in the exempt list. The se-
cond type of Revenue layout is one which is DC converted
pending approval from BDA. These layouts are technically
illegal since they do not have the approval of BDA. Instead
they have the approval of the local body concerned. They
are therefore not given Khata (title deed) as well as access to
public amenities like power, water, sewer and electricity. In
Bangalore’s case, it is found that there are revenue layouts
that manage to have access to basic amenities by informally
paying the administration. The social prole of residents of
these revenue layouts range from high end classes (housing
enclaves), middle classes (housing co-operatives and residen-
tial associations) to low end classes (farmers). BDA has the
right to demolish all these selements within the framework
of law. The third type is one which is neither DC converted
nor BDA approved but is approved by the local body.
All the three types of revenue layouts can be distinguished
from planned layouts through the absence of grid develop-
ment, presence of encroachment of buildings into roads and
absence of piped water network. Today 90% of selements
in Bangalore’s periphery form revenue layout (Ranganathan
2011:168).
The process of acquiring property in a revenue layout cannot
Der öentliche Sektor - e Public Sector Vol. 42, No. 1 2016116
S. Pellissery, A. Chakradhar, D. KS, M. Lahiri, N. S. Ram, N. Mallick, N. Kumar, P. Harish
be understood without the framework of crony capitalism.
A prospective buyer in the ‘revenue layouts’ has to navigate
through a networked web of various actors in the informal
space, which includes brokers, landowners, very often the
‘land maa’ and very signicantly the lower level govern-
ment ocials that has signicant discretionary capacity to
acquire a parcel of agricultural land, and consequently move
in but without preinstalled utility connections (Benjamin,
2004, 2008).
Now that some of the principal distinctions have been estab-
lished, it will be possible to appreciate how varying degrees
of informality within the binaries of BDA layouts and the Re-
venue layouts play out with the help of political agents on the
ground, and how governmental agencies through dierent
actions may blur the original distinction between the BDA
layouts and the revenue layouts, both of which should be
read as authorised layouts and unauthorised layouts respec-
tively. Therefore it is important to appreciate in the context of
land development in the informal layouts that, with the pas-
sage of time, certain residential layouts acquire a relatively
greater legitimacy over others, all of which are determined
by a very haphazard interaction of political agents, govern-
ment ocials, land maa and their connections with politi-
cal agents and subsequent patronage, in addition to a host of
other factors.
There could therefore be many indirect indicators for a gra-
dual and in some ways incremental improvement of legiti-
macy for such land and hence it is important to acknowledge
the role of the various informal processes that might play a
crucial role in such improvement or transformation of land
that had illegal land use to start o with, but increasingly has
enjoyed greater legitimacy. The typical ways and methods
through which such illegal land use incrementally enjoys gre-
ater legitimacy are through interactions with public authori-
ties. This blurs the distinction between formally approved
BDA layouts and the informally and illegally acquired reve-
nue layouts. – For instance, the acceptance of taxes on proper-
ty remied by the informal residents to the local government
responsible for such tax collection, implies sanctions from a
local urban development authority. In another example, any
investment towards roads and infrastructure by a local po-
litician that seeks to win favour, popularity and votes from
inhabitants of a local constituency oers the tacit protection
of dierent kinds of political actors. These practices result in
operational claims to informal land by residents of land with
improper land use or ownership titles.
Towards regularization
By the early 1980s, the problem of encroachments on lands
belonging to Municipalities, BDA, Improvement Boards and
other local bodies had assumed serious proportions. This was
due to the lack of deterrents in the existing legislations. An
amendment to the 1964 Act in 1984 therefore provided for the
oence to be punishable with imprisonment for a term which
could extend to three years and with a ne which could ex-
tend to ve thousand rupees. Further, it is also proposed that
any person who had occupied land belonging to any of the
said bodies without authority and who fails to vacate such
land shall on conviction be punished with imprisonment for
a term which may extend to three years and with ne which
may extend to ve thousand rupees, and with a further ne
which may extend to Rs. 50 per acre of land or part thereof for
every day on which the occupation continues after the date
of rst conviction.
The problem however did not disappear mainly because the
legal deterrent was insucient to induce corrective behavi-
our. This led to the clauses in the plan document to regu-
larise unauthorised occupation of Government land subject
to certain conditions and restrictions and on payment of re-
gularisation charges. The Karnataka Land Revenue Act, 1954
was amended in 1991 to provide for making unauthorised
occupation of Government land punishable and regularisa-
tion of unauthorised occupation of Government land prior
to 1989. The extent of regularisation was a maximum of two
hectares, regularisation charges was deemed to be 500 times
the assessment of land and there were special provisions for
certain sections of communities.
Another aempt to combat encroachment was introduction
of Transfer of Development Rights (TDR). By amending the
Karnataka Town and Country Planning Act in 2004 additio-
nal built up oor area ratio up to 100 per cent was allowed.
The purpose of awarding Transfer of Development Rights to
the owner of property was when urban planning with a pu-
blic purpose like building of civic amenities, parks or playg-
rounds required land acquisition. However, the scheme was
not successful since the area issued for TDR was 15.75 sq km
as against actual utilisation of 5.29 sq km.
The regularisation of unauthorised structures was an impor-
tant strategy of combating urban expansion. This came about
with a provision for regularisation combined with penalty
payment. The penalty was not more than the amount calcu-
lated from market value of property of that area. There was
charged a levy for granting permission for development of
Land or building from the owner of such land or building, for
supply of water, formation of ring road, slum improvement
and mass rapid transport system at such rate not exceeding
one tenth of the market value of land or building. The buil-
ding was to be forfeited in case of contravention of rules or
non-payment of penalties.
Master plan and
regularisation:
Inconsistencies
The Karnataka Town and Country Planning (Regularisati-
on of Unauthorised Development of Constructions) Rules
2014, popularly known as AkramaSakrama (literal transla-
tion in local language means ‘regularising irregularities’) is
the amendment to various acts including Karnataka Town
and Country Act. The scheme was conceived in 2006. It was
framed to bring ‘decorum’ to the process of urbanisation
while aiming at addressing issues such as demarking land
use as commercial, residential and mixed. The laws enclosed
prescribing building setbacks, addressing agricultural land
being constructed upon in violation of town planning rules,
buildings having been constructed that are not in line with
Vol. 42, No. 1 2016 Der öentliche Sektor - e Public Sector 117
Regulation in a Crony Capitalist State: e Case of Planning Laws in Bangalore
building regulations and punishment for encroachments.
The scheme applied to all layouts and buildings that had
come up on private property before October 19, 2013. The
government called for illegal property owners to le for re-
gularisation from March 2015, to be extended to a period of
one year till March 2016. No building or layout on encroa-
ched government or semi-government land was eligible for
regularisation. Houses constructed within eighteen kilomet-
re radius of BBMP were to be regularised.
Funds mobilised through AkramaSakrama were to be used for
the development of infrastructure and the creation of parks
and open spaces in the state. The government claimed that
it will be in a beer position to provide amenities like beer
roads, street lights, garbage pickup and water connections as
the regularisation of 2.5 lakh properties stood to bring in up
to 5000 crores to the Karnataka government through beer-
ment charges, stamp duty and registration charges.
There are a number of consequences to the enactment of this
Act. In the short term, properties that currently aract a lo-
wer price due to their status as ‘illegal constructions’ will
increase in value up to 20-30% after regularisation. Such a
spike in supply of real estate may temporarily lower buying
prices. However, in the long run, by paying the prescribed
fee to regularise illegal constructions, professional builders
could pass on the burden of these penalty fees to the ultimate
buyers. Therefore, property prices may increase at purchase.
Further, a large number of properties that are currently seen
as ‘unsalable’ due to lower prices due to their ‘B’ Khata re-
gistrations will become aractive in the real estate market,
resulting in increasing supply and lowering prices. But in
the long run, this will gravely aect the real estate market in
the city. Perception of real estate in Bangalore will be that of
lower-quality construction since it will be a known fact that
buildings in violation of legal requirements are permied to
exist (Kumar 2014).
On 20 March 2015, the High Court stayed the scheme based
on Public Interest Litigation by civil society groups . The
contention put forth in the litigation was two-fold. The High
Court was requested to look into the interests served while
implementing the scheme. The issue raised was that though
property developers and the bureaucrats concerned have
been able to construct and permit illegal buildings, the buyers
alone had to pay for regularisation. This may not deter illegal
development of land per se. The second issue was the hurried
manner in which the law was passed though there was a lot
of opposition. The government’s contention was that nearly
10000-15000 crore rupees would be generated from the sche-
me across the state of Karnataka that could be used for urban
development. After three governments and seven years of
debates, the scheme was introduced through the ordinance
route . A second petition led by a Bangalore based Citizen
Action Forum demanded that the scheme should have pro-
visions to respect the neighbourhood sentiments and inte-
rests. The Forum also asked the HC to enforce penalties and
payments against the violators of building regulations. They
have pointed out that the scheme renders irrelevant the mas-
ter plans and comprehensive development plans.
Gains of crony capitalists
through regularization of
revenue layouts
The development of revenue layout was fostered by the in-
terplay of various interests of the stakeholders. The main
stakeholders involved in the Bangalore urban development
scenario were politicians, bureaucrats, realtors and residents.
The revenue layouts that organically developed were to sa-
tisfy housing needs of the people who could not aord both
the planned and private layouts. The residents supported the
revenue layout since they were looking for housing property
and access to public amenities in a city that they migrated
to for employment. In order to do this, they bought proper-
ty built in by realtors often through credit oered by banks.
Thus the formation of revenue layouts was demand driven
through a market that was allowed to grow with State com-
plicity. The realtors beneed from the unmet demand by
investment and their interest was primarily nancial. The
layout formation was indirectly aided by bureaucrats and
the political class through two dierent ways- often they tur-
ned a blind eye to the illegality though they had the power
to demolish the construction through BDA, thereby giving
implicit sanction for layout formation. In the second type of
response, certain kinds of layout were given permits in the
local bodies.
Once the revenue sites were generated, for the politicians ac-
ross three dierent political parties over the period of seven
years from 2007 to 2014, the main impetus was to regularise
revenue layout through AkramaSakrama law. This was be-
cause they had initiated the private layout formation through
planning and laws in the 1990s when housing was shifted
from being an exclusive monopoly of the state to provisi-
on through private players. They now stood to gain public
support and exert state authority to bring the layouts under
the purview of law. The political class presented the issue in
public interest by stating that they were regularising what
was illegal through a onetime payment thereby enabling resi-
dents to have title deeds. Furthermore, the interest stated was
revenue generation to the state that could be utilised for pub-
lic service provision. The bureaucratic class also showed rent
seeking behaviour after regularisation of housing, by exploi-
ting the loop hole in the Karnataka land reform Act to regu-
larise residential property in the green belt through onetime
payment. The class of realtors supported the regularisation
drive since the penalty of irregularity was completely borne
out by the residents. It was this objection that was repeated-
ly raised in the judicial proceedings in the Karnataka High
Court. Thus the resident class opposed the way in which re-
gularisation was carried out.
The period of revenue layout formation and regularisation
exhibits a collusion of the political realtor class in encoura-
ging the development of a parallel illegal market for housing
to cover the inadequacy in supply of the state provision for
the same commodity. Once the revenue layout was well es-
tablished, then the drive to regularise them and bring them
under the law penalised only the buyers of property and not
the authorities who sanctioned it or the realtors who const-
ructed these properties. By presenting the case of regulari-
Der öentliche Sektor - e Public Sector Vol. 42, No. 1 2016118
S. Pellissery, A. Chakradhar, D. KS, M. Lahiri, N. S. Ram, N. Mallick, N. Kumar, P. Harish
sation as the State helping the residents receive title deeds,
the aempt was to exert authority, gain public favour and
generate revenue.
Stakeholder mapping (table 2) reveals that the three politi-
cal parties in the last seven years in power namely the JDU,
Congress and BJP were in favour of the scheme along with
property developers. Those that mainly contested the claims
of the law were civil society groups comprising residents of
the layouts and urban planners.
Phase
Revenue Layout formation
Revenue Layout regularisation
Stakeholder
Type of
involvement
Interest
displayed
Type of
involvement
Interest
displayed
Politician
(Active) permit
through local
bodies; passive
collusion by
realtor nexus
Gaining Public
support
politically,
financial gains
from realtors
(Active)
legislation for
regularisation to
re-establish state
authority
Revenue
generation,
political
support from
residents
Bureaucrat
(Passive) collusion
by rent seeking
from illegal
property
Financial gains
from realtors
(Active)
promotion of
regularisation by
onetime payment
Exertion of
authority,
revenue
generation
Realtor
(Active) provision
of housing
Revenue
generation from
selling property
without legal
hassles
(Active) support
since no penalty
on the builders
Opportunity
of non
penalty for
illegal
activity
Resident
(Active) purchase
of property
Access to
affordable
housing,
amenities
(Opposition) since
penalty entirely
borne by them,
demand for
accountability of
political and
bureaucratic class
Concern
about
shouldering
entire
financial
liability,
corruption
Source: Developed by Authors
Tab. 2. Stakeholder’s Interest Map
Conclusion
Bangalore had unique ways of coping with its urban sprawl.
The initial idea of planned development with master and
structural plans saw the growing unauthorised development
through revenue layouts with the consent of the planning au-
thorities, though outside the law. In the rst phase, the pro-
perty providers were the real estate builders who took the
initiative to provide buildings together with the necessary
infrastructure in the place of BDA. As the second phase of
unauthorised development was largely a result of ineptitude
of regulation to deal with urban growth, the politician realtor
nexus took charge of the next change in regulation through
regularisation. Successive governments have justied it on
two counts- that it would legalise the unauthorised revenue
layouts and it would generate revenue to nance further in-
frastructure provision. However, the residents and proper-
ty buyers have opposed the move with the intervention of
the judiciary. Their contention is that the penalty imposed
on regularisation only concerns the buyers, leaving out the
politicians, bureaucrats and realtors who consented and ef-
fected the development of the property. Thus, the dominant
political force of politician-realtor nexus can be a beer expla-
natory variable of the Bangalore growth story, comparable
with the creative class factor in European cities during their
expansion.
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