BENGALURU: Karnataka’s real estate regulatory authority is not lacking in funds; however, it is losing control over its financial resources.
The Karnataka Real Estate Regulatory Authority (K-Rera) generates steady income from project registrations, agent fees, penalties, and various charges. However, its autonomy in fund allocation has diminished, with the state government assuming control over the dedicated regulatory corpus.
The K-Rera Regulatory Fund was established by the Real Estate (Regulation and Development) Act of 2016 to ensure the authority’s financial independence. This fund was intended to allow K-Rera to independently manage its operations, including hiring personnel and processing complaints.
However, this mandate has been altered. Starting on March 30, 2019, the government appropriated around Rs 44 crore in Rera receipts, categorizing them under a “revision fund.” Consequently, all revenues began flowing into state-controlled accounts, with expenses subsequently released through state budget allocations.
According to Section 75 of the Act, K-Rera was meant to operate through a self-managed Regulatory Fund.
Internal communications reveal that instructions from the finance department in 2021 formalized this arrangement, transferring funds into non-interest-bearing reserve accounts and routing expenditures through the state budget. Officials argue this has stripped K-Rera of direct operational control, transitioning it from a self-sustaining body to a budget-dependent organization.
The repercussions of this shift are evident: delays in recruitment, prolonged legal consultations, increasing backlog of complaints, and limitations on improving essential infrastructure. K-Rera has communicated concerns since March 2021, but officials indicate that no resolutions have been provided.
The situation escalated in 2021, leading to the high court’s intervention, which expressed concerns about the management of the regulatory fund and directed the government to align with practices in neighboring states to restore the authority’s autonomy.
Despite such orders, officials maintain that the budget system remains in place, with the state government covering salaries and operational costs. As of March 2026, K-Rera has generated Rs 85 crore in regulatory income.
In recent correspondence with the chief secretary, K-Rera has urgently requested the restoration of control over the regulatory fund, emphasizing that the current framework undermines its role as an independent quasi-judicial regulator.
Bottlenecks Identified
K-Rera has outlined several operational challenges that are hindering its efficiency:
- Consultant Hiring Restrictions: K-Rera has encountered delays in hiring external experts in legal, technical, and financial areas due to new state approval requirements, which have negatively impacted complaint resolution timelines.
- Pending Fee Revision Proposal: A proposal submitted on August 24, 2022, for revising stagnant registration fees, which are still based on 2017 rules, is yet to receive approval despite an increase in workload and compliance responsibilities.
- Outsourced Staff Remuneration Issues: K-Rera seeks exemption from a December 2023 finance department directive limiting outsourced wages without prior state consent, arguing that it relies on its self-generated funds.
- Unresolved Staffing and Certification Matters: The authority’s revised Cadre and Recruitment Rules, resubmitted in August 2022, are still pending approval, stalling permanent recruitment efforts.
- Vehicle Requests Awaiting Approval: Of four vehicles requested, only one has been approved due to cited disposal criteria not being met for the existing ones.
