Bengaluru: Construction Sector Slams the Brakes as OC Mandate Takes Effect
Bengaluru: The Karnataka government’s recent mandate to make an Occupancy Certificate (OC) compulsory for new water and electricity connections is severely impacting not just industries but the entire construction sector.
Thousands of buildings already stand on B-Khata and revenue sites, and an equal number are under various stages of construction on similar plots. Builders and landowners are anxiously awaiting the government’s next move, unsure whether they can proceed.
Due to this, the purchase of key construction materials such as cement, steel, RMC (Ready Mix Concrete), concrete, binding wire, and sand has declined sharply, dealing a major blow to the overall construction ecosystem.
The Registration Department does not have precise records of B-Khata or revenue sites. However, estimates suggest there are over five lakh such plots across Karnataka, including Bengaluru. A senior Revenue Department official said that if even existing buildings are struggling to obtain OC, new constructions on such sites may face more scrutiny and delay.
This has led to concerns about job losses in the construction labour sector. With fewer projects progressing, daily wage workers may not find adequate employment, affecting their livelihood. This, in turn, will reduce the government’s income from indirect tax collections on labour expenses, said economist Bhaskar Nagendrappa.
Real estate is also hit hard. People who have already built houses on B-Khata plots are struggling to sell them. Buyers are hesitant due to legal and compliance concerns. Builders in the real estate sector are also facing similar setbacks. The sale and purchase of B-Khata sites have slowed down significantly, leading to a downturn in the real estate industry as well.
The Karnataka government’s decision to enforce the OC rule is a part of its broader efforts to regulate urban development and ensure compliance with building standards and environmental norms. While the intention behind the rule is to promote sustainable and lawful construction practices, the immediate impact on the construction and real estate sectors is undeniable. Stakeholders are calling for a more flexible and phased approach to implementation to mitigate the adverse effects on the economy and employment.
