Bengaluru: Construction Sector Slams the Brakes as OC Mandate Takes Effect
The Karnataka government's new mandate for an Occupancy Certificate (OC) for new water and electricity connections is causing a significant slowdown in the construction and real estate sectors. The rule is affecting thousands of buildings and construction sites, leading to concerns about job losses and economic impacts.
Construction SectorOccupancy CertificateReal EstateJob LossesBengaluruReal Estate NewsJun 09, 2025
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.
Frequently Asked Questions
What is the Occupancy Certificate (OC) mandate in Karnataka?
The Occupancy Certificate (OC) mandate in Karnataka requires new water and electricity connections to be provided only to buildings that have obtained an OC, which certifies that the building complies with all legal and regulatory standards.
How is the OC mandate impacting the construction sector in Bengaluru?
The OC mandate has led to a significant slowdown in the construction sector, with a decline in the purchase of key construction materials and uncertainty about the future of ongoing projects on B-Khata and revenue sites.
What are B-Khata and revenue sites?
B-Khata and revenue sites are plots of land that are not officially part of the city’s development plan and do not have proper documentation. Many buildings and constructions are located on these sites.
How are daily wage workers in the construction sector affected by this mandate?
With fewer construction projects progressing, daily wage workers are facing job losses and reduced employment opportunities, which affects their livelihood.
What is the impact on the real estate market in Bengaluru?
The real estate market in Bengaluru is experiencing a downturn as buyers are hesitant to purchase properties on B-Khata plots due to legal and compliance concerns, leading to a slowdown in sales and purchases.
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