The Karnataka government has officially approved a substantial initial grant of ₹125 crore to support Bengaluru’s five newly established city corporations. This crucial funding follows the dissolution of the Bruhat Bengaluru Mahanagara Palike (BBMP) and the creation of these new administrative bodies under the Greater Bengaluru Authority (GBA).
Each of the five corporations – Central, East, West, North, and South – will receive ₹25 crore. This allocation is designed to cover their essential administrative and operational costs during a transitional period, specifically until a new system is fully implemented for direct tax payments into their individual accounts.
Bridging the Funding Gap
These new corporations were officially formed on September 2, 2025, through a government notification under the Greater Bengaluru Administration Act, 2024. With this significant restructuring, the BBMP has ceased to operate, and all its assets, liabilities, personnel, and staff have been successfully transferred to the GBA. The GBA will now be responsible for overseeing these five corporations, alongside specialized entities like Bengaluru Solid Waste Management Limited (BSWML) and Bengaluru Smart Infrastructure Limited (B-SMILE).
As an interim financial arrangement for the 2025-26 fiscal year, approximately ₹300 crore collected through BBMP’s property taxes has been held in a Union Bank account. From this reserve, the ₹25 crore for each new corporation is being released. While these corporations have already established their own bank accounts, the Karnataka government will continue to disburse funds from the former BBMP account until their independent tax revenue streams are fully operational.
The government’s order also specifies that any future distribution of remaining BBMP grants among the new corporations may involve adjustments to account for this initial advance. Furthermore, it emphasizes that all expenditures from these grants must strictly adhere to established regulations and be approved by the relevant administrative officers, in full compliance with the Karnataka Economic Code, 1958, and all other applicable financial laws.
This decisive action by the government, taken under various sections of the Greater Bengaluru Administration Act, 2024, enables it to assume control of all BBMP assets and liabilities upon final notification. It also empowers the government to manage these assets and facilitate financial arrangements temporarily, ensuring a smooth transition until the new corporations are entirely self-sufficient.