Amma I Loove U

A STUDY ON LAND ACQUISITION AND COMPENSATION
PATTERN FALLOWED AT KHB, BENGALURU
CHAPTER-1
INTRODUCTION
Part-A
1.1 INTRODUCTION OF INDUSTRY
1.2 MEANING
The term Industry refers to manufacturing concerned with the conversion of raw
materials or semi-finished goods into finished goods. In a broad sense, the term
Industry refers to that branch or part of business activity which is concerned with the
raising, production, processing or fabrication of goods and services.
1.3 DEFINITION
According to Hutchinson Encyclopaedia, The term Industry refers to the extraction
and conversion of raw materials, the manufacture of goods and the provision of
services.
1.4 NATURE OF INDUSTRY
1. Industry is an economic activity, leading to the creation of utility.
2. Industry is a part of business activity which is concerned with the raising,
3.
4.
5.
6.
production, processing or fabrication of goods and services.

Industry is concerned with the production of products or goods.
Industry undertakes production of goods for the purposes of sale.
Industry involves production of goods and services recurrently or regularly.
Profit motive is an important feature of industry. That is, industry produces
goods for sale with the object of making profit.

7. Industry requires capital investment.
1.5 SERVICE INDUSTRY

INDIAN ACADEMY DEGREE COLLEGE
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The service industry involves the provision of services to businesses as well as final
consum
ers. Such as, therefore includes accounting, tradesman ship, computer services,
restaurants, tourism etc.
Hence, a service industry is one where no goods are produced whereas primary
industries are those that extract minerals, oil etc from the ground and secondary
industries are those that manufacture products including builders, but not remodelling
contractors.
An industry made up of companies that primarily earn revenue through providing
intangible products and services.
Service industry companies are involved in retail, transport, distribution, food
services, as well as other service dominated businesses. Also as called service sector,
tertiary sector of industry. See also primary industry, secondary industry.
1.6 TYPES OF SERVICE INDUSTRY

There are 11 main industry groupings or sub-sectors within the service industry:
1. Wholesale & retail service
2. Pharmaceutical Health care & social assistance
3. Professional, scientific & technical services
4. Educational services
5. Finance, insurance, retail estate & leasing
6. Transportation & warehousing
7. Information, culture & recreation
8. Public administration & defence
9. Business, building & other support services
10. Accommodation & food services
11. Other services
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1.7MEANING OF HOUSING
Housing generally refers to the social problem of insuring that members of society
have a home to live in, whether this is a house or some other kind of dwelling, lodging
or shelter. Many Governments have a department that deals with housing such as the
United States Department of Housing and Urban Development.
1.8 INDIAN CONSTRUCTION INDUSTRY: INTRODUCTION
Construction becomes the basic input for socio-economic development of any country.
The construction industry generates substantial employment.

India is currently the second fastest growing economy in the World.
The Indian construction industry contributing approximate 8% to GDP.
The construction sector being the second largest employer in India, next only to
agriculture. The sector generated around 31 million jobs.
1.9 INDIAN CONSTRUCTION INDUSTRY: DEVELOPMENT

The following Associations and Councils have contributed a lot in the Development of
Construction Industry.
NBCC- National Building Construction Corporation of India wholly owned
Government of India Enterprise under the aegis of the Ministry of Urban
Development.
CIDC- Construction Industry Development Council is the Planning
Commission, Govt of India, jointly with the Indian construction industry.
BAI- Builders Association of India was formed in 1941 in Pune.
NBO- National Buildings Organisation is the Ministry of Housing for
technology transfer, experimentation, development and Dissemination of
housing statistics.
BIS- Bureau of Indian Standards is a Standardization and quality systems to
ensure better implementation of Indian Standards.
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1.10 CLASSIFICATION OF CONSTRUCTION PROJECTS

In general there are 5 types of construction
1.
2.
3.
4.
5.
Residential building construction

Industrial construction
Commercial building construction
Institutional construction
Heavy civil construction
1.11 KARNATAKA HOUSING BOARD

1.12 INTRODUCTION
1.13 Background of the study
Housing is one of the basic needs of mankind in terms of safety, security, self-esteem,
social status, cultural identity, satisfaction and achievement. It is one of the major
determinants of economic well being. The development of satisfactory housing has
always been the priority in both policy formulation and its implementation.
A rapid rise in population results in higher demand of dwelling units for residential
purpose. This coupled with the growth in household formulation and increased ruralurban migration resulting from non-availability of opportunities in rural areas has
resulted in severe pressure on urban infrastructure in recent years. The consequence
has been over-crowding and unhealthy living environment, shortages of basic
amenities and finally social and economic deprivation. All major urban centres in our
country are gradually becoming victims of such civic deficiency.
As per the Census 2001, India has population of over 1027 million, which is second
highest after China, with an unfavourable land-man ratio. As the country enters an era
of economic growth, economic liberalization and prosperity, cities seem not yet ready
to accommodate the growing population and provide work and services and
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environmental infrastructure for all. The twin problems of affordability and

availability continue.
The housing problem should not be envisaged as a mere demand supply problem.
Because of inequitable income distribution in our country, there is bound to be a wide
gap between the demand for the houses and the need, because the need is translated
into demand only when it is backed by the purchasing power. Only a supply side
intervention will not solve the problem, though it can alleviate the same.
The housing finance sector, however, continued to grow during the year 2002-03,
2003-04 and 2004-05 with the banking sector evincing keen interest which in turn
could have been fuelled by the lack of preferable alternative avenues for investment.
As per the preliminary reports, the banking sector crossed Rs. 30,000 crores mark in
housing finance disbursal whereas the housing finance companies have also came
close to disburse Rs. 18,000 crores in the year 2003-04. However, the housing finance
business has resulted in relaxation of sanctioning norms causing regulatory concerns.
The Reserve Bank of India has asked commercial banks to be more vigilant while
disbursing housing loans.
Government of India has allowed Foreign Direct Investment (FDI) up to 100% for
development of township, housing infrastructure and construction projects. This opens
up Foreign Investment in various sub-segments such as housing, commercial
premises, hotels, resorts, hospitals, educational institutions, recreating facilities and
infrastructure relating to cities/towns. Karnataka State is one of the most preferred
states for the foreign direct investment. The real estate prices in the State are likely to
appreciate and more particularly in Bangalore, Mangalore, Mysore, Hassan, Belgaum
and Hubli in the range of 15% to 25% per annum for the year 2005-06. During the
year 2005-06 KHB is required to focus on purchase of land, construction of
commercial complexes and also provide housing facilities to the lower, middle and
higher income groups, as emphasized in the Budget for the year 2005-06.
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1.14 ORGANIZATION PROFILE

India is blessed with one of the fastest growing real-estate markets in the world. It is
not only attracting domestic real-estate developers but also the foreign investors;
particularly, the NRI investments in India have a bulk of their share in the Indian
housing market. Despite the global economic gloom as a result of the sub-prime
mortgage debacle and ensuring credit crunch, Indias housing sector remains on
course for yet another year of double-digit growth. The growth is attributed mainly to
a large population base, rising income level and rapid urbanization, according to our
research report, Indian Housing Sector Analysis.In view with the ongoing
development exhibited by the housing construction industry in India, it is expected
that the sector will overtake other industrial sectors in terms of contribution to the
GDP growth during the next few years.
Presently, affordable housing is basically targeting the economically weaker class and
low-income groups and constitutes majority of the Indian housing industry, both in
terms of value and volume. Beside, luxury housing is also expected to witness
significant growth in the coming years as this market segment is comparatively very
small and possesses huge potential for further developments.
Now the Focus is towards the Karnataka housing board which aims at satisfying the
needs of the housing needs for the people of Karnataka.
Karnataka Housing Board Head office is located at Cauvery Bhavan, Bangalore.
Karnataka housing board has sub divisions in every district headed by a Assistant
Executive Engineer, then other divisions headed by Executive Engineer.
1.15 DEMAND FOR HOUSING IN KARNATAKA

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The probable demand for housing could be analysed from the Census statistics; as per
census 2001 the population in Karnataka state was 52,733,958. The census further
indicates the expected growth in population would be around 1.5% per annum
considering that one house is required for 4 individuals the actual requirement of
houses for the above population is 13,776,747 houses. An analysis was made taking
into consideration the Urban and Rural population and the requirement of housing in
each district. The requirement is further divided into EWS, LIG, MIG and HIG by
adopting 40%, 30%, 25% and 5% respectively.
KHB undertakes layout formation, housing schemes and land development schemes
as envisaged in the Act and subject to the control of the State Government. The
schemes are:
Composite Housing Schemes

Group Housing Schemes
Multi-storeyed Apartments
Labour Housing Schemes
Sites & Services Schemes
Satellite Towns
Layouts
Commercial Plazas
District Office Complexes
Mini VidhanaSoudha
Office Buildings
Public Private Partnership Projects
KHB endeavours to meet the housing requirement to all class of people viz.,
Economically Weaker Section (EWS), Low Income Group (LIG), Middle Income
Group (MIG) and High Income Group (HIG) categories.
KHB townships are provided with basic infrastructure such as asphalted roads,
drinking water, electricity, underground drainage etc. KHB townships provides civic
cum commercial complexes in developed areas. Bigger townships have commercial
plazas.
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KHB takes care of maintenance of each township till is handed over to local municipal
bodies, road repairs, garbage clearance, street light maintenance, security are taken
care. KHB ensures electricity and water supply from local authorities.
16
ACTS RULING KHB

KARNATAKA ACT 10 OF 1963
THE KARNATAKA HOUSING BOARD ACT, 1962
THE KARNATAKA HOUSING BOARD RULES, 1964
THE KARNATAKA HOUSING BOARD (BORROWING SUMS BY ISSUE
OF DEBENTURE) RULES, 1967
THE KARNATAKA HOUSING BOARD REGULATIONS, 1983
THE
KARNATAKA
HOUSING
BOARD
(WORK-CHARGED
ESTABLISHMENT EMPLOYEES) (ABSORPTION IN THE HOUSING
BOARD SERVICES) RULES, 1985
THE
KARNATAKA HOUSING
BOARD
(WORK
CHARGED
ESTABLISHMENT EMPLOYEES) (ABSORPTION IN THE HOUSING

BOARD SERVICES) RULES, 1999
DEPARTMENT OF PARLIMENTARY AFFAIRS AND LEGISLATION, 2000
THE KARNATAKA HOUSING BOARD ACT, 1962
PART-B
1.17 INTRODUCTION ABOUT THE STUDY
Land is one of the scarce natural resources on earth. It is not possible to either increase
or decrease the land .Hence it must be ensured that it is managed judiciously and in a
sustainable manner so that the common good of the people in a long run can be
ensured. Creating wealth and looking after welfare of the citizens is difficult without
the economic and infrastructural development. But the development at the cost of
individual rights cannot be accepted as development in true sense. That means the
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individual rights need to be protected in economic development. In general, land is

acquired for economic development resulting in displacement of the people. Hence the
important thing is that large-scale displacements should be minimized to the extent
possible and if the displacement be stopped then there is a need to handle it with
utmost care. In fact, the terms minimum displacement and non displaying
alternative are music to the ears, but not so easy a task to ensure. Fixation of adequate
compensation to the land-losers can be one of the best ways to ensure minimum
displacement in the sense that the displaced person will always be in a position to buy
an alternative land for him.
There are some issues relating to the fixation and payment of compensation to the land
losers, which need to be taken care of in a comprehensive manner to ensure
sustainable development. It is noticed through a study of various case laws that the
dissatisfaction of the land-losers in terms of compensation leads them to a sense of
hostility towards the governments project of land acquisition. It is also a common
understanding that if a person thinks that he is not properly compensated for the land
which has been taken from him by the Government, he becomes hostile towards the
his own Government. Various bandhs and protests witnessed in the recent past in
India. Along with a flood of cases in the Supreme Court are fair evidence for that. The
protest in the month of April 2011 in Coimbatore district of
Tamil nadu for
acquisition of over 8,500 acres of land by the Tamil nadu Housing Board, can also be
cited here as a latest example. It becomes inevitable to make sure that the land-losers
are paid adequately. The fact is that these hostile activities of the people and their
resultant protests and bandhs actually affect the development projects of the
government to great extent causing delay and increased cost of the project. Majority of
the cases recently decided by the Supreme court on land acquisition matters relate to
the substantially to the issue of the amount of compensation paid by the government to
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the land-losers. Some of the issues related to the determination of compensation are as
follows.
1. Determining the value of land and the adequacy of compensation:

The most difficult question is to determine what should be the adequate amount of
compensation.
2.Fixation of the compensation:
It has been found in many cases that compensation paid is less than the actual market
price of land.
3.The inconsistency in awarding the amount is one of issues to be dealt with:
The land was acquired for building a new broad gauge line of the Konkan railways
.The acquisition authorities gave 4per sq metre. The award was challenged in the
district court, which fixed the compensation at the rate of RS 192 per sq metre. The
high court reduced the compensation to RS 38. The supreme court while overruling
the decisions of the high courts decision in these words- In our opinion, the
compensation awarded by the high court had no basis whatsoever and was not
supported by cogent reason and it did not cosider the failure prospects of the
development of the land in question
4. Time limit within which the compensation should be paid.
5. Time taken by the Court in delivering the judgement:
The courts while delivering the judgments in land acquisition matters take a very
long time.
6. The manner of giving compensation:
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The current mode of one time disbursement of compensation is an issue which should
be taken note of. The mode of compensation should be such as to ensure the
sustainability in the sense of regular income to the land-loser.
The compensation package and R&R (Resettlement and Rehabilitation) should be
sustainable, and not only one-time event. It is common understanding that if a person
does not have proper awareness, investment skills or ability to handle cash, one-time
monetary compensation is dwindled away or diminish in extravagancy or loss by
fraud, leading the land-loser to an uneasy situation.
7. The types of others benefits that can be given to the land-losers:

Alternative types of compensation or otherwise, along with the adequate cash
compensation can be taken as a measure for the proper and equitable valuation of land
for instance, allotting a part or a site of the developed land (as is currently in
practicein Karnataka) or giving equity shares in commercial venture or offering jobs
to the land-losers and displaced persons or offering TDRs (Transfer Development
Rights). This will result not only in compensating for the loss of land but also in
ensuring proper R&R It is argued here that if we try and decide compensation in a
scientific way, litigation can be minimized to a great extent. A justifiable way of
calculating compensation can avoid disputes. The case of NTPC v. State of U.P.14 is a
case on the point. In this case, the farmers who were the land-losers questioned the
procedure of arriving at the compensation by the Government. The Supreme Court put
the onus of proof on the land-losers by applying the principles of contract. The landlosers won the case and were able to prove why the compensation was unjustified and
not scientific.
1.18 MEANING OF LAND ACQUISITION
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Land acquisition in India refers to the process by which the union (or) state
government in India acquire private land for the purpose of
Industrialisation,
development of Infrastructural facilities (or)urbanisation of the private land , and

provide compensation to the affected land owners injury by and their rehabilitation
and resettlement.
1.19 DEFINITION OF LAND ACQUISITION,ACT 1894
The expression land includes benefit to arise out of land, and things attached to the
earth (or) permanently fastened to anything attached to the earth.
1.20 MEANING OF COMPENSATION
Compensation is money that is paid to someone in exchange for something that has
been loss(or)damaged (or) for some problem.
1.21 DEFINITION OF COMPENSATION
The Act (or) state of compensating, as by rewarding some one for service (or) by
making up for someones loss, damage, (or) injury by giving the injured party an
appropriate benefit.
1.22 PROCEDURE FOR THE LAND ACQUISITION
The Act outlines the following steps for land acquisition:
1.Investigation:
After the proper papers have been filed for acquisition of land ,and the government is
satisfied about the purpose, area and other rules the government issues a preliminary
notification under section 4(1), followed by hearing of objections under section 5A.
The revenue officers are appointed for holding an inquiry. After this is cleared ,the
owner of the land is prohibited from selling or making any other modifications to the
land.
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2. Objections and confirmation:

If any person has objection to the proposed acquisition of his land, he can file
objection within thirty days from the date of notification .Such objection will be heard
by the collector. The collector has to submit a report to the government who will
declare the land for acquisition after which the collector proceeds with.
3. Claim and Reward: The collector, without being involved in the proceedings, offers
a fair price to the land loser based on the market price of the land. After declaring the
award ,it has to be paid by the collector under section 11 within a period of the two
years.
4. Final notification: The final notification is issued by the government under section 6
of the LA Act within the period
of three years from the date of preliminary
notification under section 4(1) of the LA Act.

5.Reference to court:
If the person who receives the award is not satisfied, then he can submit a written
application to court within six weeks of declaration.
6 .Apportionment:
Each of the claimants is entitled to the value of his interest, which he has lost by
compulsory acquisition. Thus, a variety of interests, monetary rights and claims in the
land are valued.
The whole proceedings relating to the land acquisition Act are carried on by the land
acquisition collector, who is an officer appointed by the government for this purpose.
The proceedings carried on by the land acquisition collector under the LA Act are of
administrative nature. The proceedings are neither judicial nor quasi-judicial.
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1.23 HISTORY OF LAND AQUISITION 1894

The British Government first outlined the Regulation 1 of the Act in 1824 which was
then applied throughout the Bengal provinces. This Act enabled the government to
acquire immovable property or land at a fair and reasonable price for any public
purpose like construction of roads, canals, etc. In Act I of 1850, some of the
provisions of the regulation were extended to Calcutta. This was necessitated by the
requirement of land for the purpose of building a railway network. In 1839 and 1852,
Act XXVII and XX were introduced in Bombay and Madras to facilitate construction
of public buildings. The first Act to be applied to entire British India was Act VI of
1857 and it repealed all of the previous acts pertaining to land acquisition. Finally the
complete Land Acquisition Act of 1894 was enacted and it replaced the previous Act
X of 1870. This Act, with timely amendments, has governed acquisitions of land by
the government after Indias independence in 1947.
Government if the purpose is for the Union, and by the State Government for all other
purposes. Local authorities, companies, registered societies and registered cooperative societies can also seek acquisition of land through the government for
development activities. The latest amendment in the Land Acquisition Act was
through the Land Acquisition (Amendment) Act, 1984 with the following objectives:
1. To amend the law for the acquisition of land for public purposes and for companies,
and
2. To determine the amount of compensation to be paid on account of such
acquisition.
The Act thus declares the right of the Government to acquire land and the (right of
the) owner of the land to have a judicial determination of compensation payable to
him by the Land Acquisition Courts.18
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1.24 EVOLUTION IN LAWS FOR LAND ACQUISITION

India being the second amongst the most populated countries in the world after China
and with varied use of land, the challenges in the process of Land Acquisition are
mounting. This can be evidenced from the fact that quiet a number of fundamental
issues in the last decade have been related to the Land Acquisition matters including
the Narmada BachaoAndolan and the Nandigram incident, the recent incident
being the Greater Noid incident. Apart from the issues related to the land acquisition,
more and more lands are required for various government projects including the
Special Economic Zones. There has been quiet an evolution of the Land Acquisition
Laws currently in existence in India in the last decade. Initially, no relevance was
given to the wishes of land-losers, but now, the law is trying to make provisions for
objections and alternative remedies if the land-loser finds the compensation to be
inadequate.
Private rights in a land or property are expropriated through the compulsory
acquisition. Compulsory acquisition acts as a restraint on the right of individual where
they cannot sell-off their property as per their wishes. The Law of Land Acquisition is
aimed at legalising the acquisition of land for public purposes, which is actually
owned by the private individuals for the payment of an equitable compensation.
The law of land acquisition is now in an evolutionary mode more emphasising
towards the protection of individual rights, which can be evidenced with the pending
Land Acquisition Amendment Bill 2007 to the Land Acquisition Act, 1894. Some
important features of the Land Acquisition Act Amendment Bill, 2007 can be cited as
below:
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Under the original LA Act, 1894, the term 'person interested' includes those
who are claiming land compensation and those interested in an easement
(limited right of use the land) on the land. The Bill proposes to expand the
definition to include tribal and other traditional forest dwellers that have lost
any traditional rights as well as individuals with tenancy rights under the State
law20.
In addition, if any damages are incurred on land excluded from acquisition

proceedings, the appropriate owner must be compensated within six months.
Payment for acquired land must be made within one year from the date of the
declaration. The Collector can extend this time limit by six months with a
penalty of 5% per month. If payment has not been made within one year nor
has the Collector granted an extension, the land acquisition proceedings shall
lapse.
After the compensation amount is determined, the Collector must ensure that
payment occurs within 60 days. Possession of land shall not be taken unless
full compensation is paid or tendered to the land owner.
Land owners whose property has been acquired under urgency shall be
compensated an additional 75% of the market value of the land.
.If the acquisition is for a company, shares or debentures of 20-50% of the
compensation amount must be offered through these options. The interested person
may either accept this offer or opt for a full cash settlement.
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Market value of the land to be computed by Percentage of Sale Deeds:

Three criteria are prescribed by the Bill for determining the market value
of land, the highest value among which should be adopted by the
Collector for the purpose of fixing the actual value of land. The criteria
refers to the sale prices of recently done sales of similar lands, computed
from "not less than 50%" of the total transactions, "where the price has
been higher".
The Bill requires the company to offer shares or debentures. By

accepting shares, the land owner may be benefitted by way of
appreciation in the market value of the shares, regular dividend and
bonus shares, etc. But at the same time, equity is a risk bearing
investment and if the company incurs losses then the land-loser can lose
substantive amount in terms of reduction in the market value of shares.
Similarly, if the land owner accepts debentures, he receives only a fixed
return; he is effectively lending money to the company to purchase his
own land.21
All the provisions discussed above regarding the fixation or determination of

compensation proves that it is not so easy to formulate a fool-proof policy for
compensation in land acquisition. Any sort of policy adopted by the Government is
subject to criticism and dissatisfaction of the land-losers. All we can do is first to
highlight the various points of dissatisfaction of the land-losers and then to address
which policy should be best suited for the time.
1.25 ISSUES OF COMPENSATION :
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The issue of compensation is the central focus of this research paper. Compensation is
a means to make good the loss of property suffered by the land-loser because of his
land being acquired by the Government for the fulfilment of a certain public purpose.
There are a few issues attached with the criteria or method of determining the amount
of compensation to be paid to the land-loser. However, before going to discuss those
issues, it is inevitable to understand some basic legal provisions related to the fixation
of compensation.
PROVISIONS OF COMPENSATION UNDER THE LAND ACQUISITION

ACT, 1897:
Sections 23 and 24 of the LA Act, 1894 specifically deals with the computation of the
amount of compensation. Section 23 lays down the matters to be taken into
consideration while determining the amount of compensation for the land to be
acquired, while saying that the market value of the land at the date of publication of
notification under Section 4 (1) of the Act should be kept in mind. It is well settled
that the Land Acquisition Officer is competent to collect evidence during the inquiry
of the market-value of three years preceding the notification and then fix the market
value. The market-value so fixed, however, is not binding on the claimant, neither
fixation of market-value by the Collector is conclusive nor final.34 It has been held in
Tehsildar Land Acquisition Officer v. T.V. Seesagiri Rao35, that the absence of rebuttal
or corroborative evidence in proof of the offer of the Government in the award, will
not absolve the Court of its judicial function of appreciation of evidence. Under
Section 23 while determining the amount of compensation, the Court is required to
take into consideration the market-value of the land on the date of notification under
Section 4, thereof.
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Determination of market value of land is still a big concern. Factors which should be
taken into consideration while determining the market value of land are still not
certain. In Ranvir Singh and anr. v. Union of India38, the question was that whether
the factors like (a) notifications issued by the Union of India (b) brochure issued by
the Delhi Development Authority (DDA), taken by the High Court while awarding
compensation, can form basis for determining the market value of the acquired lands.
The answer given by the Supreme Court was no. It was held that the market value of
fully developed land cannot be compared with wholly underdeveloped land, although
they may be adjacent or situated at a little distance. Nature of land plays an important
role. Sale deed is most relevant factor and important piece of evidence. Market
conditions prevalent on the date of notification are relevant. An isolated sale deed
showing a very high price cannot be the sole basis for determining market value. It
was held further that there cannot be any fixed criteria for determining the increase in
the value of land at a fixed rate. Hence the fixation of market value of land still
remains inthehands of the Land Acquisition Collector. Even the State Government
cannot challenge the amount of compensation awarded by the Land Acquisition
Collector.39
The legal position of fixing the compensation according to the market price of the land
was put forth by Justice Ravindran in the case of Ajani Molu Dessai Vs. State of Goa4
There is always a question mark in assuming that a farmer has been properly
compensated, even if he is paid the value of his land even at the current market price.
Here, it is interesting to note that in the State of Karnataka, a different practice to pay
compensation is followed. The land-owner is given choice either to accept the
guidance value of his land fixed by the revenue department or to accept few sites in
the developed land. This is known as an alternative compensation instead of the
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monetary compensation. This applies in case of acquisition for the residential purpose.
For example, if one acre of land is acquired by the government, then 45% of this
acquired land goes to the purpose of civic amenities (such as construction of roads,
parks, government schools, play grounds, etc.); the remaining 55% of the total land
meant for the residential houses is divided into 60:40 ratio per acre among the
Government and the land-loser.43 Government is free to use its portion of land for the
project, and the land-loser gets his portion of land as compensation for the whole land
acquired by the Government. This 55% of the total land is actually called as the
developed land. Forty percent (40%) of this developed land i.e., 9583
It is assumed that the value of this developed land would shoot-up to such an extent so
that land-loser would be able to get money by selling his portion of developed land in
excess to the value of total land prior to the development. Some of the officials and
various people are of the view that this practice has proved to be successful, so far,
and the land-losers are really happy with the practice. But here a question arises
whether a farmer whose land is acquired and whose only means of livelihood was the
agricultural activities over his land, can be said to be properly compensated under the
current scheme. It is all right with a person having some land lying in a village area,
and along with the having some business or some source of income in the city. He will
be very well in a position to retain his portion of land as a compensation for a longer
term until the value of his land increases, but what about the farmer who had his
agricultural land as the only source of income. Now, there is question mark in
assuming a farmer to retain his portion of land received as compensation, for a longer
term and wait for its value to increase. Here is the biggest flaw in the current practice.
Currently, a practice is being followed by the Tata group of companies in various parts
o\f the country whereby the company recruits the land-losers according to their
respective qualifications, with a view to provide them a source of regular income. One
may argue here that the Government should provide jobs to the land-losers in
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compensation for the land acquired. Obviously, the Government cannot provide the
government jobs to the land-losers because it may contravene Article 16 of the
Constitution of India. But, the government can make it obligatory for the Company for
whom the land is acquired, to recruit the land-losers according to their qualifications.
This can simply be done by inserting a clause to that effect in the agreement signed
between the government and the company, at the time when the land is transferred to
the Company under the Karnataka Land Acquisition (Companies) Rules, 1973.
If the above solution is proved not to be feasible for the Company, then there can be
another way to tackle the problem and make sure that a source of regular income is
ensured to the LAND.
. After the acquisition of land, the land or any part thereof can be transferred to the
company by sale, gift, and lease or otherwise. If the land is transferred to the
Company by the Government by way of lease on a fixed rent yearly, in such a
situation, the Government starts getting a regular fixed income from the Company in
terms of the rent, while the land-loser gets the compensation only once. Particularly, in
terms of State of Karnataka, there is no provision for the fixed income to the landloser. It is suggested here that the land-loser should be made a beneficiary to the
agreement entered into by the Government with the company for a fixed
remuneration. The regular rent paid by the company can be shared by the government
and the land-loser in a specified ratio.
The values of land have to be determined according to the location of the land. If the
land is situated nearby to, a district, has to be valued differently from a land situated
far away from a district.
COMPENSATION
UNDER
THE
KARNATAKA
INDUSTRIAL
DEVELOPMENT POLICY 2009-2014
Page 21

The exemption of stamp duty and Concessional Registration Charges This incentive
will be applicable for the land transferred by KIADB to land owners as compensation
for the acquired land.
The policy will also have a provision to take the land owners as partner in the project
by offering certain equity to them. Alternatively land owners will be offered adequate
compensation based on the set guidelines.
The land owners except in case of acquisition for Single Unit Complex and
infrastructural projects will have an option to get part of the developed and developing
land on the location by KIADB in lieu of specified compensation. Land owners are
free to use this portion of land for residential / commercial / industrial purposes
subject to the prior approval of KIADB. Further, plan for building construction
requires approval by the KIADB. Appropriate clause will be in place in the policy to
ensure that the land is developed within the stipulated time frame and the project is
implemented as per the declared schedule.46
1.26 NEED FOR A FAIR AMOUNT OF COMPENSATION :

Compensation is meant for softening the blow of dispossessing a person from his land
or property. Hence, it is inevitable to have a proper understanding of the concept of
compensation.
The term compensation is generally understood by its equation with the market price
of the land or property, or the notional value of the land or property in the market. The
displaced person or the land-loser is treated a willing seller of his property to the
Government. The element of coercion that plays it part in compulsory acquisition of
land is never taken care of where determining the compensation. Compulsion is
tempered by a solatium, which, being a percentage (now fixed at thirty percent) of the
Page 22

compensation is also dependent on the market value. The option of compensating land
for land merits a mere mention in the law; it is not, in any event, a binding obligation
of the State.
With its defective vision distorting displacement, there are significant absences in the
law for computing compensation. For one, it does not take responsibility for providing
for the replacement value of the land, or rights, lost. For another, mass displacement
often affects
population whose lives are not constructed around formal legal rights, making market
value and irrelevant criterion. The various difficulties involved in determining the
value to the displacement cost have been externalised; the law has never addressed
them. The displacement costs have been scrupulously suppressed. The law of
compensation does not focus over any of the allied factors attached to the land
acquisition apart from the individual satisfaction, as the indigence caused in the
displaced population, the breakdown of the society, increased exploitation, etcfr
Multiple displacements and none can deny that it extracts an unconscionable cost.
Neither the decision to acquire, nor the computing of compensation, takes
responsibility for this disproportionate burden on the displaced. Particularly where
they reorder hierarchies of legal concern, changes in the law are a response to
pressures that cannot be ignored. This is reflected in the gradual, even if reluctant,
introduction of the recognition of displacement into the law. Yet, the law being
essentially conservative, it will take unrelenting determination to build the gravity of
displacement into the law.
losing their lands. There should be a grievance redressal mechanism built into the
acquiring process. Acquisition has increased, particularly after the Special Economic
Zones (SEZs) and mining and large development projects started coming up in a big
Page 23

way. A number of land acquisition attempts have led to protests by those affected.
Very often, these protests have turned violent.
Agriculture itself depends for its growth on infrastructure, as also on industry, to quite
an extent and therefore the need of land for non-agricultural use.
1.27 COMPENSATION:
1. CASH OR KIND:
2. CASH-FOR-LAND:
The Land Acquisition law in India is based on this basic principle of compensation,
i.e. cash-for-land principle. One particular dimension of deprivation, i.e. dispossession
of land is identified under this principle; for which the proceeds or price is fixed
according to the market price. In fact, it is the most narrow interpretation given to loss.
The calculation of the price of land is done according to the prevalent market-price of
the similar-quality land under similar use or in the adjacent or the land situated in the
nearest area.
Under this approach, an assumption is made that the land is a commodity. Whether the
project-affected are able to replace their livelihoods on sustainable basis, as envisaged
by the cash-for-land principle, depends upon their use of the money. More specifically,
it depends on whether the money is used for investment in land and other productive
assets, or used for house construction and consumption purposes.54In reality, the
fixation of compensation under this principle has resulted in discrimination,
inadequacy and hostility amongst the people. The other biggest problem related to this
Page 24

type of compensation is the threat to the agricultural land. The government pays cash
for agricultural land and uses it for development and industrial purposes, resulting in
reduction of agricultural land in the country. Reduction in agricultural land is directly
a factor for inducing the reduction in food supply to the people in the country and
fodder to the cattle. The Government has to ensure that any development work
undertaken by it does not result in reduction of food supply, especially in a country
like India where the population is continuously on rise.
In India, the land acquisition law provides for prompt and adequate monetary
compensation for persons who lose their land and property.55 However, cash
compensation has many negative consequences, particularly for tribal and other
marginal populations. Tribal economies are in large part non-monetized, based on
reciprocal exchange of goods and services; therefore, people are not well accustomed
to managing cash. There is popular saying: Land is like diamonds but money is like
ice.
The sudden cash in their hands gives many the false impression of wealthiness. They
change their life style. Gambling and drinking increases to a great level.
Exclusive cash compensation is least useful to the resettlers in the long run; instead,
land-based resettlement contributes to cultural security. The land-for-land approach is
essential for resettlement despite criticisms that it denies the settlers the right to
choose for themselves and that cash compensation could provide opportunities for
opening family businesses.
For the purpose of implementing the land-for-land compensation, several relocation
sites have to be identified, so that the displaced ones could get those alternate sites. It
should be madecompulsory that the new relocation sites are better compared to the
previous sites in terms of their soil quality, productivity, irrigation facilities,
availability of water, etc. Or if not better, at least it should be comparable to the
Page 25

previous sites. Furthermore, if there is possible off-farm income (e.g. forestry,

seasonal labour opportunities, cattle rearing, fishing, etc.) from the new site selected
for giving as a compensation to the land-loser, then the land-loser will be more than
happy and satisfied, and will never resort to any protests or agitations whenever the
government is acquiring the land for public purpose.
In most countries, calculation of compensation for the acquired land is done on the
basis of its market rate. It may not be so easy for the land-loser to buy a land
comparable to his own
land acquired by the Government with the compensation money because of the limited
land market or the high cost of the land in the area of relocation.
Delay in the payment of compensation is also a severe problem, which reduces the
value of the compensation awarded by the Government.
Finally, cash compensation disproportionately benefits some interest groups (i.e. big
landlords) but not poor and small-scale farmers, the landless, and women. Big
landlords profit more from relocation because much of their land is either
sharecropped or remains uncultivated, making the cash compensation more attractive
to rich farmers, who then re-invest it in the non-agricultural sector. Landless labourers
are often the hardest hit group in the relocation process due to their lack of ownership
and entitlement to land. In many countries such as Bangladesh, India and Pakistan,
landless people constitute 50% of the total population.
LAND-FOR-LAND:
The principle of land-for-land has been evolved as the major focus of current
compensation policies. This is the principle followed in almost all the developed
Page 26

countries like U.K., U.S., Denmark, etc.56 The principle is called the land
consolidation. This is important because in this policy, an alternative land is given to
the land-owner as compensation. In this method, the agricultural land will not be
reduced; as a result, the food-supply will remain intact.
Even the land-loser or the farmer will be happy to have alternative land so as to carryon his agricultural activities. Land is a life-long source of income for a farmer. Land is
also compulsory that the new relocation sites are better compared to the previous sites
in terms of their soil quality, productivity, irrigation facilities, availability of water,
etc. Or if not better, at least it should be comparable to the previous sites. Furthermore,
if there is possible off-farm income (e.g. forestry, seasonal labour opportunities, cattle
rearing, fishing, etc.) from the new site selected for giving as a compensation to the
land-loser, then the land-loser will be more than happy and satisfied, and will never
resort to any protests or agitations whenever the government is acquiring the land for
public purpose.
In most countries, calculation of compensation for the acquired land is done on the
basis of its market rate. It may not be so easy for the land-loser to buy a land
comparable to his own land acquired by the Government with the compensation
money because of the limited land market or the high cost of the land in the area of
relocation.
Delay in the payment of compensation is also a severe problem, which reduces the
value of the compensation awarded by the Government.
Finally, cash compensation disproportionately benefits some interest groups (i.e. big
landlords) but not poor and small-scale farmers, the landless, and women. Big
landlords profit more from relocation because much of their land is either
sharecropped or remains uncultivated, making the cash compensation more attractive
Page 27

to rich farmers, who then re-invest it in the non-agricultural sector. Landless labourers
are often the hardest hit group in the relocation process due to their lack of ownership
and entitlement to land. In many countries such as Bangladesh, India and Pakistan,
landless people constitute 50% of the total population.
In this way, it can be ensured that the resettlement or compensation awarded is
sustainable. This is also a solution to the problem of calculating market price of the
land. The other problem is related to the rights over the land and the person who
should be eligible for the compensation.
However, all is not good with the land-for-land principle of compensation, as many
other practical difficulties are attached to it. These difficulties may be cited as below:
1. Determining the amount or the area of land to be given as compensation for the
acquisition of land.
Generally, a comparable amount or area of land is provided as compensation, subject
to the land ceiling laws.
2. Determining the quality of land to be given as alternative land in compensation.
Though the comparable area of land is sought to be provided as compensation,
yet there may be possibility that the land available to be provided as
compensation is not of the same quality or productivity. It may require a lot of
investment and hard-work to make such a land of equitable productivity.
Merely giving the alternative land without infrastructure and other facilities
may not be useful to the farmer to whom it is given as compensation.
Page 28

PRINCIPLES
WHICH
SHOULD
GOVERN
THE
DETERMINATION
OF
COMPENSATION
Each person possesses an inviolability founded on justice that even the welfare of
society as a whole cannot override John Rawls.64 If you are to suffer, you should
suffer in the interest of the country Jawaharlal Nehru.65 These two statements
should always be borne in mind while formulating any sort policy by the Government.
Compensation whether in financial form or as replacement land or structures, is at the
heart of compulsory acquisition. As a direct result of government action, people lose
their homes, their land, and at times their means of livelihood. Compensation is to
repay them for these losses, and should be based on the following principles:
Legislation should enable the clear definition of the date at which the
land should be valued as values can change rapidly as a result of
awareness of the project. The most equitable approach is to have a
valuation date that sets the value of the land as if the proposed project
did not exist. For this reason, it is common for legislation to require that
the value of a land parcel is linked to the date of the publication of
notice. If legislation does not specifically link the date of valuation to
such an event, the acquiring agency should specify dates appropriate to
the nature of the project.
Losses of Customary Rights that may require compensation: Most laws
on compulsory acquisition broadly define equivalent compensation with
reference to market value or just compensation. In general,
compensation should be for loss of any land acquired; for buildings and
Page 29

other improvements to the land acquired; for the reduction in value of

any land retained as a result of the acquisition; and for any disturbances
or other losses to the livelihoods of the owners or occupants caused by
the acquisition and dispossession. The Asian Development Banks
Summary of the Handbook on Resettlement: A Guide to Good Practice
(1998) identifies the following losses for which compensation may be
required: agricultural land, business premises (owned or occupied),
access to forest land, traditional use rights, access to fishponds .
Page 30

and fishing places, structures used in commercial/industrial activity, displacement

from rented or occupied commercial premises, income from standing crops, income
from rent or sharecropping, income from affected business, income from forest
products, income from fishponds and fishing places, subsistence from any of these
sources, schools, community centres, markets, health centres, shrines, religious sites,
places of worship and sacred grounds, access to food, medicines and natural
resources.
Assessment of compensation should be Consensual, based on free negotiation:
Once the land acquisition for a project is approved by the government, the
primary and default mode of compensation and R&R assessment should be
consensual, based on free negotiation between the concerned land owners and
the private entity requiring land. This will make the acquisition process
democratic and also offer individuals the power to determine a realistic value
of their land which will make them willing participants of development rather
than sacrificial lambs for the developmental agenda of the state or private
projects. However, a completely market-based approach is partially skewed
due to imbalance in negotiation power and information asymmetry. Not only
do the small and fragmented land owners have to face large corporate with
superior bargaining power and open to strong-arm tactics, but also suffer from
limited skills and expertise in valuation. The government needs to be involved
here to ensure equity by monitoring against potential abuses of the process
and provide the displaced owners assistance in valuation of the land. Where
negotiation fails due to instances of holding-out with a few owners refusing to
sell their land, which can jeopardize the entire project, the State may be
permitted to resolve the issue by employing the power of eminent domain if
the public interest is served. A meaningful threshold for negotiated land
Page 31

acquisition has to be set. This must be met having regard to both the number of
owners whose land is required and overall land required for the government to
step in. In cases of state-sponsored development, compulsory acquisition
should be permitted only when the public purpose is clearly demonstrated
and after a bona fide attempt at consensual negotiation, both of which should
be approved by a court of law.
Uniform policy for the land acquisition and compensation:
That is to say, the acquisition policy applicable to the acquisition done for any
State Government scheme should also be applicable to acquisition done for
any central government scheme.
. Provision for the land-losers to share profits of the industrial projects being
set up on lands acquired from them can be taken as one of the measures to pay
compensation.
The land-loser should be given market rates instead of floor rates and they too
should be allotted industrial plots with the provision that they could rent them
out. It should be noted here that the MFRs are fixed by the Government of
Haryana for the land acquisition in Haryana. The compensation is fixed
according to those MFRs, and not the market price in Haryana.
Principle of Equity and Equivalence:

The principle of equivalence is crucial to determining compensation:
affected owners and occupants should be neither enriched nor impoverished as
Page 32

a result of the compulsory acquisition. Financial compensation on the basis of

equivalence of only the loss of land rarely achieves the aim of putting those
affected in the same position as they were before the acquisition; the money
paid cannot fully replace what is lost. In some countries, there is legal
provision recognizing this in the form of additional compensation to reflect the
compulsory nature of the acquisition. In practice, given that the aim of the
acquisition is to support development, there are strong arguments for
compensation to improve the position of those affected wherever possible.
The calculation of compensation is based on the value of the land rights and
improvements to the land, and on any related costs. The determination of equivalent
compensation can be difficult, particularly when land markets are weak or do not
exist, when land is held communally, or when people have only rights to use the land.
While the public interest in keeping costs as low as possible is important, this concern
should not deprive people of the equivalent compensation they need in order reestablish their lives after the loss of their land.
1.28 GUIDING PRINCIPLES FOR ENSURING EQUITY AND EQUIVALENCE
INCLUDE:
EUIVALENCE
People should receive compensation that is no more or no less than the loss resulting
from the compulsory acquisition of their land. Appropriate measures should ensure
that those affected, and particularly the vulnerable, are not disadvantaged.
BALANCE OF INTERESTS:
Page 33

The process should safeguard the rights of people who lose ownership or use rights of
their land while ensuring that the public interest is not jeopardized.
FLEXIBILITY
The law should be specific enough to provide clear guidelines, but flexible enough to
allow for the determination of appropriate equivalent compensation in special cases.
Legislators cannot foresee all possible scenarios, and a rigid application of detailed
provisions may result in people not being compensated for losses that are not
identified in the legislation.
COMPENSATION SHOULD ADDRESS BOTH DE FACTO AND DE JURE
RIGHTS IN AN EQUITABLE MANNER FOLLOWING THE PRINCIPLE OF
EQUIVALENCE.
Where occupants have no recognizable legal right or claim to the land occupied, they
may be entitled to resettlement assistance and to compensation for assets other than
land. Some form of fair payment for squatters is important, particularly where they are
poor, are driven to informality out of necessity, and especially where government has
condoned or encouraged the settlement in the first place.
FAIRNESS AND TRANSPARENCY:
The negotiating powers of the acquiring agency and affected people should be as
equal as possible. Reasonable costs of affected people, including support to the poor
and illiterate in negotiations, should be paid as part of the compensation. Negotiations
should be based on an open exchange of information
Page 34

CHAPTER- 2
REASEARCH DESIGN
2 INTRODUCTION
The word Research is derived from the French word Researcher. The Research is an
organized enquiry designed and carried out to provide information for solving a
problem. Research design is a statement or specification of procedures for collecting
and analysing the information required for the solution of specific problems. It
provides a scientific find work for conducting some research investigation.
The Research design is considered to be the blue print for action, which is made
before the respective action to be undertaken. However, it needs to be flexible. A
research design is the program that guides the investigator in the process of collecting,
analyzing and interpreting observations.
MEANING
Page 35

A research design is a logical and systematic plan prepared for directing a research
study. It specifies the objectives of the study, the methodology and techniques to be
adopted for achieving the objectives. Research is the process of systematic and in
depth study or search for any particular topic, subject or areas of investigation, backed
by collection, compilation, presentation and interpretation of relevant details of data.
DEFINITION
According to Claire sleets and others A research design is a arrangement for
collection and analysis of data in a manner that aims to combine relevance to the
research purpose with economy in procedure.
2.1 TITLE OF THE STUDY

A project report on A Study on Land Acquisition and Compensation Pattern At
Karnataka Housing Board
2.3 STATEMENT OF THE PROBLEM
Planning is required to help, assure the survival and growth of the company. The
management has to clarify its objectives as to what actions must be taken, when, by
whom and what cost to achieve the desired objectives.
2.4 SCOPE OF THE STUDY
The research is focusing over the land acquisition laws and practices in the State of
Karnataka. The central issue dealt with in the research is the compensation package
given by the Government to the land-losers. The paper presents and discusses the
issues that even after the acquisition of land with due payment of compensation, the
communities go ahead and put constraints before the Government and hinder the
Page 36

developmental process. Many cases like the wide protest happened in the case of
Arkhavathy Layout shows that the people are hostile towards the land-acquisition
policies of the Government, especially with reference to the compensation. The
research is an attempt to analyse that whether the current practice of determining the
compensation in Karnataka needs some review by the Government so that the
problems like Arkhavathy Layout may not happen in future. Because these agitations
and bandhs practised by the people, act as a major hindrance in the developmental
projects.
2.5 OJECTIVES OF THE STUDY

The following are the key objectives of the research:
1. To understand the various financial schemes
2. To understand the land compensation payable.
3 To study the advances paid towards land acquisition.
4. To study the housing sale by KHB.
5. To study the income earned by board by sale of properties.
2.6 METHODOLOGY
The methodology of research has been both descriptive and analytical. The researcher
has used both primary and secondary source of data. As a part of the primary research,
the data has been collected by interviewing various Government officials in the
departments like BDA, BBMP, KIADB, Urban Development Department, Revenue
Page 37

Department, etc. As part of the secondary research, the data has been collected from
books, articles, websites, etc
2.7 LITERATURE REVIEW
A literature review is the presentation, classification and evaluation of what other
researchers have written on a particular subject. A literature review may form part of a
research thesis, or may stand alone as a separate document and it is organized
according to the research objective. It is a conceptually organized synthesis which
ultimately provides a rational data for further research.
2.8 HYPOTHESIS OF THE STUDY
They are significant between time and investment.
Return on investment is significant to location of the project.
2.9 SOURCES OF DATA COLLECTION

Data required for the study is collected through published statement of annual
accounts of Karnataka Housing Board such as Income and Expenditure account and
Balance Sheet. This supplemented by the information gathered during the discussion
with the housing board manger.
The methodology followed for collecting information is based on:
1. Primary data
Page 38

The primary sources are the original sources and first hand information which is
collected at Karnataka Housing Board.The primary data is that data were gathered by
way of interview with the officials of Cost accounting and financial departments.
Through the verbal discussions which were held with finance and other departments.
2. Secondary data
All secondary data used for the study has been extracted from the annual
reports, manuals and other published material of the company.
The data of Karnataka Housing Board have been collected mainly from
secondary source viz.
a. From the concerned employees of KHB.
b. Accounting books, records.
c. Statistical records.
d. Official website.
2.10 SAMPLE DESIGN OF DATA COLLECTION TOOL

The tools and technique is used for the analyzing the data, for data analysis is a
subsequent interpretation as been interpreted by using the following tools which as
follows:
1. Having meetings and interaction with the managers and staff of the company.
Page 39

2. On the basis of the tables, analysis sheet, graphs helps to identify the way and
means of the solution to problems.
The financial statement like Income and Expenditure Account, Balance Sheet and
development programme of the firm was referred to collect information about material
consumption, wages paid to the labour, other expenses incurred in the completion of
the contract, equipment used etc.
2.11 PLAN OF ANALYSIS
The data have been analyzed with the help of statistical tools such s wherever
necessary, tables, charts, diagrams; graphs were resorted to make the data
understandable, intelligible and amenable.
2.12 REFERENCE PERIOD

The study is limited to financial statement such as Balance sheet and Income and
Expenditure Account for the three years
2011-12, 2012-13 and 2013-14 of
Karnataka Housing Board.
2.13 LIMITATIONS OF STUDY

Every effort has been made to make study complete and has exhaustive as possible.
However the study is not free from certain limitations.
Page 40

The major limitation of this study is practical difficulty.

Time was one of the major limitations.
The present study concentrates only on KHB.
The secondary data collected from the annual reports are limited.
The analysis is based on historical annual reports of the company.
Authorities were reluctant to reveal full information about the working of the
company.
Strategic problem.
The accuracy of the information depends upon the degree of the correctness
accounting of the company.
The study was to be completed within a limited time period.
Analysis is only a means and not an end in itself. We have to make
interpretation and draw own conclusion.
CHAPTER SCHEME
CHAPTER 1: INTRODUCTION
This chapter includes the introduction to the topic and to the study. It will provide
the reader with the basic idea for further understanding of the study.
CHAPTER 2: RESEARCH DESIGN
Page 41

This chapter provides the plan of the study, tools and techniques used in the data
collections, review of previous study, methodology and sources of data, interpretation
and analysis.
CHAPTER 3: COMPANY PROFILE
This chapter includes the brief information about the company profile considered
for the project.
CHAPTER 4: DATA ANALYSIS AND INTERPRETATION
This chapter provides an analysis of an idea with required interpretation. It also
throw slight on the various inferences drawn on the basis of collected data.
CHAPTER 5: SUMMARY OF FINDINGS,SUGGESTIONS ,AND CONCLUSION
This chapter includes an overview of study done, summarize the findings under
each objective and provide conclusion and offer practical and acceptable
recommendations based on the findings.
ANNEXURE
This chapter includes the copy of financial statement of the company.
BIBLOGRAPH
This chapter includes the list of various books, articles, websites
that are referred and used in the research.
CHAPTER-3
PROFILE OF THE COMPANY
Page 42

KARNATAKA HOUSING BOARD

INTRODUCTION
Housing has been recognised as a basic human need. Several initiatives at the centre
and state levels have focused on housing as an integral part of the growth process. A
housing society or apartment associations is a situation popular in India with a group
of house owners within a residential complex, usually one consisting of buildings that
each have flats. The housing society formed must be formally registered with registrar
of co-operatives.
Housing initiatives must be viewed in the background of the overall economic
development and the needs of the people. An assessment of the magnitude and nature
of housing shortage in the state will determine the nature of policy prescriptions and
policy interventions. Good and timely policy prescriptions help in establishing a well
functioning and sustainable housing market.
A rapid rise in population results in higher demand of dwelling units for residential
purpose. This coupled with the household formation and increased rural-urban
migration resulting from non-availability of opportunities in rural areas has results in
severe pressure on urban infrastructure in recent years. The development of
satisfactory housing has always been the priority in both policy formulation and its
implementation.
WORLD SCENARIO OF CONSTRUCTION INDUSTRY

The roots of the housing society movement can be traced to multiple influences
and extend worldwide. In the Anglo sphere, post forms of co-operation between
Page 43

workers and owners that are expressed today as Profit sharing and Surplus sharing
arrangements existed as far back as 1795.
Friendly Societies established forums through which one member; one vote was
practices in organization decision making. The principles challenged the idea that a
person should be an owner of property before being granted a political voice.
Throughout the second half of the nineteenth century there has been a surge in the
operating to advance democracy and universal suffrage as a political principle.
Friendly Societies and consumer housing societies became the dominant form of
organisation amongst working people in Anglo sphere industrial societies prior to the
rise of trade unions and industrial factories.
The common thread is the principle that an enterprise or association should be owned
and controlled by the people it serves and share any surpluses on the basis of each
members housing society contribution (as a producer, labourer or consumer) rather
than their capacity to invest financial capital.
INDIAN SCENARIO OF CONSTRUCTIONS INDUSTRY

The period from 1950 to mid 1960s witnessed the government playing an active
role in the development of these services and most of construction activities during
this period were carried out by state owned enterprises and supported by Government
departments. In the first five-year plan, construction of civil works was allotted nearly
50 percent of the total capital outlay.
The first professional consultancy company, National Industrial Development
Corporation (NIDC), was setup in the public sector in 1954. Subsequently, many
architectural, design engineering and construction companies were setup in the public
sector like Indian Railways Construction Limited (IRCON), National Buildings
Page 44

Construction Corporation (NBCC), Rail India Transportation and Engineering

Services (RITES), Engineers India Limited (EIL), etc and private sector like
Hindustan Construction Company (HCC).
CONTRIBUTION TO INDIAN ECONOMY
In India Construction has accounted for around 40 percent of the investment
during the past 50 years. Around 16 percent of the nations working population
depends on construction of its livelihood. The Indian construction industry
employee over 3 crores people and creates assets worth over Rs. 20,000 crores.
It contributes more than 5 percent to the nations GDP and 78 percent to the
GCF. Total capital of state and central Government will be touching Rs.
8,02,087 crores in 2011-12 from Rs. 1,43,587 crores (1999-2000).
The share of the Indian construction sector in total Gross Capital Formation
(GCF) came down from 60 percent in 1970-71 to 34 percent in 1990-91.
Thereafter, it increased to 48 percent in 1993-94 and stood at 44 percent in
1999-2000. In the 21st century, there has been an increase in the share of the
construction sector in GDP and capital formation.
GDP from construction at factor cost (at current price) increased to Rs.
1,74,571 crores (12.02% of the total GDP) in 2004-05 from Rs. 1,16,238 crores
(10.39% of the total GDP) in 2000-01.
The main reason for this is the increasing emphasis on involving the private sector
infrastructure development through public-private partnerships and mechanisms like
build-operate-transfer (BOT), private sector investment has not reached the expected
levels.
The Indian construction industry comprises 200 firms in the corporate sector. In
addition to these firms, there are about 1,20,000 class a contractors registered with
various government construction bodies. There are thousands of small contractors,
Page 45

which complete for small jobs or work as sub-contractors of prime or other

contractors.
FUTURE CHALLENGES FACING BY CONSTRUCTION INDUSTRY
The Indian economy has witnessed considerable progress in the past few decades.
Most of the infrastructure development sectors moved forward, but not to the required
extent of increasing growth rate up to the tune of 8 to 10 percent. The Union
Government has underlined the requirements of the construction industry.
With the present emphasis on creating physical infrastructure, massive investment is
planned in this sector. The Planning Commission has estimated that investment
requirement in infrastructure to the tune of about Rs. 14,50,000 crore or US $ 320
billion during the 11th Five Year Plan period.
This is a requirement of an immense magnitude. Budgetary sources cannot raise this
much resources. Public Private Partnerships (PPP) approach is best suited for finding
the resources. Better construction management is required for optimizing resources
and maximizing productivity and efficiency.
The period from 1950 to mid 1960s witnessed the Government playing an active role
in the development of these services and most of construction activities during this
period were carried out by state owned enterprises and supported by Government
departments. In the first five year plan, construction of civil works was allotted nearly
50 percent of the total capital outlay.
INCEPTION OF KARNATAKA HOUSING BOARD

Karnataka Housing Board established under Karnataka Housing Board Act 1962 as
a successor to Mysore Board constituted in 1956. Housing Board in India has been
setup in most of the Indian states by the Government of India in order to promote the
Page 46

property markets expansion. The primary objective of KHB is to make such schemes
and to carry out such works as are necessary for the purpose of dealing with and
satisfying the need of housing accommodation. With this directive KHB endeavours
to provide housing to the people of Karnataka at affordable cost and therefore
recognized as the most important agency for housing throughout Karnataka.
The KHB had two important computer applications running. They were Customer
Information System (CIS) and the Chief Ministers Model Town Housing Plan
(CMTHP). The CIS was intended to handle the processing of applications,
registrations and allotments/exchanges/cancellations, maintain data of properties,
record the collection of registration fees, cost of allotted properties etc and to provide
up to date information to the management regarding status of housing schemes, sites
etc. The CMTHP was intended to handle monitoring/implementation and maintenance
of the CMTH Project, which was started, with the objective of developing smaller
towns with a population of 10,000 to 20,000 to cater to low-income groups.
NATURE OF BUSINESS CARRIED
Karnataka Housing Board endeavours to meet the Housing requirements to all
class of people. This are categorized under four groups, they are:
1.
2.
3.
4.
Economically Weaker Section (EWS)

Low Income Group (LIG)
Middle Income Group (MIG)
High Income Group (HIG)
KHB townships are provided with basic infrastructure such as asphalted roads,
drinking water, electricity, underground drainage etc.
KHB townships provide Civic Amenity (CA) sites and commercial complexes in
developed areas. Bigger townships have commercial plazas. KHB takes care of
Page 47

maintenance of each township till it is handed over to local municipal bodies. Road
repairs, Garbage clearance, Street light maintenance, Security are taken care. KHB
ensures electricity and water supply from local authorities.
KHB has Project Implementation Unit (PIU) and Customer Service Unit (CSU) in
each of its township and layouts. PIU function pro-actively to make living better. CSU
is actively interacting with customers and respond timely to keep customers satisfied.
Government of India has allowed Foreign Direct Investment (FDI) up to 100% for
development of township, housing infrastructure and construction projects. This opens
up Foreign Investment in various sub-segments such as housing, commercial
premises, hotels, resorts, hospitals educational institutions, recreating facilities and
Infrastructure relating to cities/towns. Karnataka State is one of the most preferred
states for the Foreign Direct Investment. The real estate prices in the State are likely to
appreciate and more particularly in Bangalore, Mangalore, Mysore, Hassan, Belgaum
and Hubli in the range of 15% to 25% per annum for the year 2011-12.
During the year 2011-12 KHB is required to focus on purchase of land, construction
of commercial complexes and also provide housing facilities to the lower, middle and
higher income groups as emphasized in the Budget for the year 2013-14
ROLE OF KARNATAKA HOUSING BOARD

To meet housing needs of all with low income and middle income.
To improve quality of life by establishing self-containing communities with
state of amenities that is in harmony with the environment.
To provide sustainable, equitable, eco-friendly and affordable housing to all
sections of the people of Karnataka.
To provide efficient urban infrastructure services and will strive to work for
customer satisfaction.
Page 48

To do joint venture development projects with private entrepreneurs and other

Government and Semi-Government agencies.
KHB would be enabled to acquire lands for the purpose of housing on behalf of
other Organisations and firms.
VISION, MISSION, OBJECTIVES AND QUALITY OF KHB
VISION
To improve quality of life by establishing self-contained communities with state of
the art amenities those are in harmony with the environment.
MISSION
To provide sustainable, equitable, eco-friendly and affordable housing.

To constantly improve delivery and quality.
To constantly strive to work for customer satisfaction.
To provide efficient urban infrastructure services.
To function in a manner that is transparent, customer friendly, consultative and
participative.
OBJECTIVES
To provide housing accommodation to needy citizens at reasonable prices.
To select the sites for housing and decide the services to be provided.
To construct houses and to allot them under the categories of High Income
Group, Middle Income Group and Low Income Group.
To formulates the schemes for self financing that help the middle and high
income groups.
Page 49

construct commercial complexes, multi-storied buildings and shops and then

to lease them out in rent so as to secure financial resources for the boards.
Economically Weaker Section (EWS) sites allot under each housing project
only price charged 50% of cost.
QUALITY STANDARDS
KHB would like to bring more transparency in its operation. Hence it has opened
up new wings like customer relation cell, property management and project
management units to cater to the needs of the customer. It would like to ensure that all
the townships maintain quality of highest standards. All townships will be self
contained with all urban and civic amenities and will include rain water harvesting,
water recycling, tertiary treatment, developed open spaces and parks, infrastructure for
health, education and recreation.
QUALITY OBJECTIVES
To satisfy the needs of housing accommodations make such projects/schemes and
carryout such works as are necessary for the purpose:
Construct homes not houses.
Develop Townships.
Build communities not Layouts.
Page 50

Minister
ORGANIZATION CHART
SecretaryChief EngineerSpecial LandController of

Acquisition OfficerFinance
Housing Department
Karnataka Housing Board

BOARD OF DIRECTORS
NAME
SL. NO.
1.
2.
3.
4.
S. G Nanjayanamata
Sanjeev Kumar
V Yashwanth , IAS
Chairman
A. M Yogeesh , KAS
DESIGNATION
Honourable Chairman
Principal Secretary
Housing Commissioner
Secretary
BUSINESS OPERATION
Karnataka Housing Board is the only organisation developed and implemented
housing projects throughout the state. Its main administration is handled by ministry
department at VidhanaSoudha and its main headquarters located at KaveriBhavan,
Commissioner
K.G road, Bangalore. Its operation is throughout the state like Bangalore, Bidar,
Page 51

Kalaburagi (Gulbarga), Raichur, Ramanagar, Shivamogga, Chitradurga, Mandya,

Mysore,
Chamarajanagar,
Hassan,
Chikkamagalur,
Udupi,
Mangalore,
Belagavi(Belagaum),Vijayapura (Bijapura), Gadag, Bagalakote, Dharwad, Haveri,

Karwar, Bidar, Yadgiri, Bellary, Kolar, Koppal, Tumkur etc.
OWNERSHIP PATTERN
KHB is a one of the housing department undertaking by the Government of
Karnataka and its main administration is handled by Ministry Department at
VidhanaSoudha and its main headquarters located at KaveriBhavan, K.G road,
Bangalore. The department appointed 8 nominated official members and 5 nonofficial members to running and managing its business. It is purely Government
organisation there is no private equity and debentures from the outsiders.
ALLOTMENTS
The Allotment of houses and sites is being done as per the KHB Allotment
Regulation 1983, Karnataka Gazette Notification No. 28 Volume No. 118 dated: 1407-1983. Statutory reservation for various categories is as follows:
ALLOTMENT REGULATIONS
New properties are to be allotted as per regulations of KHB. As per 436 th Board
Resolutions dated 29-10-2011 the details of reservations are as follows:
1.
2.
3.
4.
SC: 16.20%
ST: 6.55%
Defence/Ex-Servicemen: 5%
Central Government Employees: 4%
Page 52

5.
6.
7.
8.
State Government Employees: 12%

Physically Handicap: 3%
Senior Citizens: 4%
General: 49.25%
RULES AND REGULATIONS

Only those persons, who pay initial deposit and Registration fee, shall be
considered for allotment of house/site.
Balance of the cost of the house/site is to be paid in four quarterly equal
instalments (monthly) as soon as they receive intimation letter from the
Housing Board. Failure to be so will entitle cancellation of the allotment and
25% of initial deposit will be forfeited.
Allotment of house/site/CA site/ Commercial site is subject to KHB allotment
Rules and Regulations in force from time to time.
Payment can be made at the Local office/Head office/CANBANK computer
services only by way of Demand Draft/Challan drawn in favour of the Housing
Commissioner, Karnataka Housing Board towards allotment applicants must
obtain an Acknowledgement.
Absolute Sale Deed will be issued at the time of handing over possession of the
house/site on full payment.
Allotment will be on first-cum first served basis also in case of less demand
and in case of more demand lottery will be conducted. Corner/Commercial
sites and Commercial shops will be auctioned.
KHB would facilities allotters in getting loans from Financial Institutions of
their choice. However KHB does not guarantee its sanction and allotment is not
liked to it in anyway.
Applications can be had from KHB Head Office/Local Office or its web site.
Application is available free of cost.
PRODUCT AND SERVICE PROFILE
PRODUCTS OF KHB
Page 53

Composite Housing Schemes

Group Housing Schemes
Multi-storeyed Apartments
Labour Housing Schemes
Sites and Services Schemes
Satellite Towns
Layouts
Commercial Plazas
District Office Complexes
Mini VidhanaSoudha
Office Buildings
Public Private Partnership Projects
SERVICE OF KHB
Approval of building plan

Issuance of sale deed
Refund
Web-based Management Information System (MIS)
Digitization
Phase 1st web application development
Upgrading existing KHB websites
Phase 2nd web application development
Its performed as a Nodal agency for providing loans facilities to its customers
by the commercial banks side.
COMPETITORS OF KARNATAKA HOUSING BOARD

1. Competitors Within the State
a. Karnataka real estate agents, property dealers, architects.
b. Bangalore Development Authority
c. Mysore Development Authority
d. Hubli real estate properties in Hubli India Housing
Page 54

e. Tumkur Development Authority

2. Competitors Outside the State
a. Orissa State Housing Board
b. Andhra Pradesh Housing Board
c. Tamilnadu Housing Board
d. Gujarat Housing Board-India Housing
e. Nagarjuna Housing Constructions
BANKERS OF KARNATAKA HOUSING BOARD
1.
2.
3.
4.
5.
6.
7.
8.
Corporation Bank
State Bank of Mysore
Vijaya Bank
Syndicate Bank
ING Vysya Bank
Axis Bank
IndusInd Bank
ICICI Bank
FUTURE GROWTH AND PROSPECTS OF KHB

Karnataka is a highly industrialized state with numerous manufacturing and
marketing companies in many of its cities. The cities likes Bangalore, Mangalore and
Mysore are regarded as perfect destinations for all sorts of commercial activities
because of their world standard infrastructure and ideal business environment.
Housing schemes under Suvarna Karnataka Programme Board has proposed to
take up 50 housing schemes at various places under Suvarna Karnataka
Programmes.
Apart from the project sanctioned under 100 housing project and Suvarna
Karnataka Programmed the board has proposed to take up the housing scheme
in various places.
Peenya Housing projects Bangalore for Government employees, it is proposed
to built 4000 dwelling units (malty storied apartment)
Construction of district office complexes mini VidhanaSoudha and quarters for
revenues department or Government.
Page 55

ACHIEVEMENTS OF KARNATAKA HOUSING BOARD
Developed Over 950 Housing Schemes.

Provided 1,10,100 Houses and 6,700 Sites (approx.).
Taken up Composite Housing and Site & Services.
Developed Satellite Townships at Yelahanka, Kengeri and Hootagalli.
Nodal Agency for National Games Village Complex, Bangalore.
KHB has obtained A+ stable credit rating from CRISIL.
AWARDS OF KARNATAKA HOUSING BOARD

Karnataka Housing Board (KHB) is the only organisation, which has developed
and implemented housing projects throughout Karnataka. KHB has been working
tirelessly for the successful completion of its ambitious 100 Housing Projects plan.
KHB has been awarded number of times by HUDCO for its best performance. The
following are some of the important awards:
32nd
Annual
day
celebrations
Housing and urban development corporation Ltd felicitates Karnataka Housing Board
in recognition of outstanding performance in housing in the year 2001-2002 24th April
2002 HUDCO.
Page 56

Special
Commendation
Citation
31st Annual day celebrations Housing and urban development corporation felicitates
Karnataka Housing Board in recognition of commendable performance in new
initiatives taken for reform and restructuring the organization for effective
implementation of projects and innovative financial management 25th April 2001
HUDCO.
Karnataka Housing Board is awarded for completing 200 Rural

Houses under Rural Housing Schemes at Dommasandra, Channarayapatna,
Somanathpura and Chowdikatte villages.
Housing and Urban Development Corporation 1994-95 Silver

Jubilee Year presented in recognition of their outstanding performance.- HUDCO.
DIFFERENT HOUSING SCHEMES UNDERTAKEN BY KARNATAKA

HOUSING BOARD
100 HOUSING SCHEME
SUVARNA KARNATAKA
Page 57

225 HOUSING SCHEME

53 HOUSING SCHEME
BOARD SCHEME
CHAPTER-4
DATA ANALYSIS AND INTERPRETATION
INTRODUCTION
Generally research consists of two parts that is gathering data and its analysis. The
analysis and interpretation of data involves the objective materials in the possession of
Page 58

the researched and subjective and derived from the data, inherent relation among
variables pertaining to the problems. Analysis and interpretation represents the
application of deductive logic to the research process.
Data analysis and interpretation is useful for decision making, there are number of
methods or techniques, which are generally used in analysis of financial services such
as comparative statements, Trend analysis and Common size statement. The objective
of the study is analysed and interpreted so as to arrive at the conclusion. The main
objective is to suggest strategies and techniques to analyze the financial statement.
ANALYSIS
Analysis of financial statement means splitting up or regrouping of figures found in
the financial statements into desired homogenous and comparable components parts.
In other words, analysis means, reclassification and re-arrangement of the data found
in the financial statements into groups of a few principle elements according to their
resemblance and affinities i.e., close connection and presenting them in the form most
convenient for interpretation.
INTERPRETATION
Interpretation refers to the stating of what the findings depicts, what they mean, their
significance and helps in drawing the answer to the original problems. Interpretation
of the analysed data requires considerable skills and experience. It is purely subjective
process.
ANALYSIS AND INTERPRETATION:

Analysis and interpretation is the process of establishing the meaningful relationship
between the items of two financial statements with the objective of identifying the
financial strengths and weaknesses.
Page 59

Table No: 4.1-Table showing changes on Initial Deposit Slum Housing Scheme
Year
Amount (in
% as base
Increase/Decreas
Rs)
year2011-
2011-2012
50,38,445
2012
100
2012-2013
63,99,736
127.01
27.01
2013-2014
76,17,536
151.18
51.18
2014-2015
78,97,356
156.74
56.74
ANALYSIS
From the above table, it is observed that the year 2011-12 has taken as base year and year of
2011-12,the initial deposit housing scheme has been increased to Rs.6399736, in the year
Page 60

2013-14,it has been increased to Rs 7617536 and in the year 2014-2015 it has further
increased toRs.7897356 . compared to base year 2011-12.
GRAPH No: 4.1-Graph showing changes on Initial Deposit Slum

Housing Scheme
% as base year2011-2012
160
140
120
100
80
60
40
20
0
% as base year20112012
Page 61

INTERPRETATION
From the above graph, it is interpreted that the year 2011-12 is taken as base year
100%. During the year 2012-13, it has increased to 127.01%, in the year 2013-14, it
has been increased to 151.18% and again in the year 2014-15, it has been increased
to156.74% compared to the base year 2011-12.
Table No: 4.2-Table showing changes on Property tax payable
Year
Amount(in
Rs)
% as base Increase/Decr
year2011ease
2012
2011-2012
40,41,802
100
2012-2013
3,10,874
7.69
92.31
2013-2014
4,54,900
11.25
88.75
2014-2015
6,78,750
16.79
83.20
ANALYSIS
Page 62

From the above table, it is observed that the year 2011-12 has taken as base year and
year of 2012-13,the property tax has been decreased to Rs.310874, in the year 201314, it has been increased to Rs.454900, and in the year 2014-15, further it has been
increased to Rs. 678750.
GRAPH No: 4.2-Graph showing changes on Property tax payable
120
100
80
60
40
20
0
2011-2012
2012-2013
2013-2014
2014-2015
Page 63

INTERPRETATION
From the above graph, it is interpreted that the year 2011-12is taken as base year
100%. During the year 2012-13, it has decreased to 7.69%, in the year 2013-14, it has
increased to 11.25% compared to last year and again in the year 2014-15, it has been
increased to16.79% compared to the year 2014-2015.
Table No: 4.3-Table showing changes on Land Compensation

Payable Account
Year
Amount (in % as base Increase/Decr

Rs)
year2011ease
2012
2011-2012
53,69,04,916
100
2012-2013
6,73,37,38,258
1254.17
1154.17
2013-2014
75,565
0.0140
99.986
2014-2015
6,72,22,04,944
1252.02
1152.02
Page 64

ANALYSIS
From the above table, it is analysed that the year 2011-12 has taken as base year and
year of 2012-13,the land compensation has been increased to Rs.6733738258, in the
year 2013-14, it has been decreased to Rs.75565 ,compared to the last year and in the
year 2014-15, further it has increased to Rs. 6722204944 compared to base year
2011-12.
GRAPH No: 4.3-Graph showing of changes on land compensation

payable account
Page 65

1400
1200
1000
800
600
400
200
0
INTERPRETATION
100%. During the year 2012-13, it has been increased to 1254.17% compared to in
the year 2011-12, in the year 2013-14 has been decreased to 0.01% and again in the
year 2014-15, it has been increased to1252.02% compared to the base year 2011-12.
Table No: 4.4-Table showing changes on Advance Paid For Land
Page 66

Year
Amount(in
Rs)
year2011ease
2012
%
2011-2012
6,14,667
100
2012-2013
8,37,38,592
13623.4
13523.4
2013-2014
9,37,58,690
15253.5
15153.5
2014-2015
1,17,89,050
1917.95
1817.9
ANALYSIS
year of 2012-13,the advance paid for land has been increased to Rs.83738592, in the
year 2013-14, it has been further increased to Rs 93758690, and in the year 2014-15,
further it has been decreased to Rs. 11789050 compared to year 2013-14.
GRAPH No: 4.4-Graph showing changes on Advance Paid For Land

Page 67

16000
14000
12000
10000
8000
6000
4000
2000
0
INTERPRETATION
has been further increased to 15253.5% and again in the year 2014-15, it has been
decreased to 1917.95% compared to the year 2012-13,2013-14.
Table No: 4.5-Table showing changes on Deposits with Land

Acquisition officer/court
Page 68

Year
Amount(In % As Base
Rs)
Year20112012
Increase/Decr
ease
2011-2012
5,65,26,454
100
2012-2013
8,34,57,216
147.64
47.64
2013-2014
83,53,38,253
1477.7
1377.7
2014-2015
6,34,71,566
112.28
12.28
ANALYSIS
year of 2012-13,the deposits with land acquisition officer/court has been increased to
Rs.83457216, in the year 2013-14, it has been increased to Rs.835338253, and in the
year 2014-15, it has been decreased to Rs. 63471566 compared to all years.
Page 69

GRAPH No: 4.5-Graph showing changes on Deposits with land

acquisition officer/court
1600
1400
1200
1000
800
600
400
200
0
2011-2012
2012-2013
2013-2014
2014-2015
INTERPRETATION
has been increased to 1477.7% and again in the year 2014-15, it has been decreased
112.28% compared to the year 2013-14.
Page 70

Table No: 4.6-Table showing changes on Sale of Marginal Land
Year
Amount(in
Rs)
year2011ease
2012
2011-2012
1,74,63,088
100
2012-2013
1,17,08,339
67.04
32.96
2013-2014
1,89,09,943
108.28
8.28
2014-2015
75,49,117
43.22
56.77
ANALYSIS
year of 2012-13,the sale of marginal land has been decreased to Rs 11708339, in the
year 2013-14, it has been increased to Rs.18909943, and in the year 2014-15, further it
has been decreased to Rs. 7549117 compared to year 2012-13, 2013-14.
Page 71

GRAPH No: 4.6-Graph showing changes on Sale of Marginal Land
120
100
80
60
40
20
0
INTERPRETATION
100%. During the year 2012-13, it has decreased to 67.04%, in the year 2013-14, it
has been Increased to 108.28% and again in the year 2014-15, it has been decreased
Page 72

Table No: 4.7-Table showing changes on Income Earned From

Properties of The Board
Year
Amount(in
Rs)
year2011ease
2012
2011-2012
4,38,18,455
100
2012-2013
4,92,16,786
112.3
12.3
2013-2014
14,04,41,092
320.50
220.5
2014-2015
7,87,49,940
179.71
79.71
ANALYSIS
year of 2012-13,the income earned from properties of the board has been increased to
Rs.49216786, in the year 2013-14, it has been increased to Rs 140441092, and in the
year 2014-15, further it has been decreased to Rs.78749940 compared to year 201314.
Page 73

GRAPH No: 4.7-Graph showing changes on Income Earned From

Properties of The Board
350
300
250
200
150
100
50
0
INTERPRETATION
100%. During the year 2012-13, it has increased to 112.3%, in the year 2013-14, it has
been further increased to 3320.5% and again in the year 2014-15, it has been
decreased to179.71 % compared to the year 201013-14.
Page 74

Table No: 4.8-Table showing changes on Income From Sale of Land
Year
Amount(in
Rs)
year2011ease
2012
2011-2012
4,64,88,94,761
100
2012-2013
6,60,53,11,112
142.08
42.08
2013-2014
4,16,70,40,843
89.63
10.37
2014-2015
6,64,94,09,367
143.03
43.03
ANALYSIS
year of 2012-13,the income from sale of land has been increases to Rs6605311112, in
the year 2013-14, it has been decreased to Rs.4167040843, and in the year 2014-15,
further it has been increased to Rs. 6649409367 compared to year 2013-14 and 201213.
Page 75

GRAPH No: 4.8-Graph showing changes on Income From Sale of

Land
160
140
120
100
80
60
40
20
0
INTERPRETATION
has been decreased to 89.63% and again in the year 2014-15, it has been increased
Page 76

Table No: 4.9-Table showing changes on Cost of Sale of Houses and

Sites at KHB
Year
Amount(in
Rs)
% as base
year20112012
Increase/Decr
ease
2011-2012
44,09,15,332
100
2012-2013
5,945,0,99,871
1348.35
1248.35
2013-2014
4,02,68,59,871
913.29
813.29
2014-2015
6,25,75,65,042
1419.22
1319.22
ANALYSIS
From the above table we can analyse that the cost of houses and sites of the company
changes from year to year. It indicates that the sales is in the year 2011-12 . The was
Rs440915332 when compared to the following years. In the year 2012-13 the sale of
houses is increased to 5945099871 and in the year 2013-14 it decreased by
Rs4026859871. Then
finally in the year 2014-15 it increased to 6257565042.This
shows that the sales of houses is high in the year 2014-15 when compared to the
following years.
Page 77

GRAPH No: 4.9-Graph showing changes on Cost of Sale of Houses

and Sites at KHB
2011-2012
100
2012-2013
1419.22
1348.35
2013-2014
2014-2015
913.29
INTERPRETATION
From the above graph, we can interpret that the cost of sale of houses increased in the
year 2012-13 i.e 1348.35% increases, when compared to base year 2011-12 . This
indicates that the concerns financial position is strong. in 2013-14 the cost may
decreases to 913.29 due to less demand. On verification of the balance sheet, it is seen
Page 78

that the the year 2014-15 it has been increases by 1419.22% compared to base year
2011-12.
Table No: 4.10-Table showing changes on Other Income from

(Housing schemes)
Year
Amount(in
Rs)
% as base
year20112012
Increase/Decr
ease
2011-2012
59,42,13,403
100
2012-2013
81,22,20,239
136.68
36.68
2013-2014
1,00,31,47,423
168.81
68.81
2014-2015
43,23,15,638
72.75
27.24
ANALYSIS
From the above table, it is observed that the year 2011-12has taken as base year and
year of 2012-13,the
other income from housing scheme has been increased to
Rs.812220239, in the year 2013-14, further it has been increased to Rs.1003147423 ,
Page 79

and in the year 2014-15, further it has been decreased to Rs. 432315638 compared to
all years.
GRAPH No: 4.10-Graph showing changes on Other Income from

(Housing scheme)
180
160
140
120
100
80
60
40
20
0
2011-2012 2012-2013 2013-2014 2014-2015
INTERPRETATION
Page 80

From the above graph, we can interpret that the income as % of the company is
varying year by year. An increase in income leads to good sales and good growth of
the company. In the year 2013-14 there is an increase of profit/income from houses
that is 168.81% when compared to all the years. In the year 2014-15 there is slightly
decreased to 72.75% when compared to previous year 2013-14 that is 168.81%
Table No: 4.11-Table showing changes on Land Registration fees

Year
Amount(in
Rs)
% as base
year20112012
Increase/Decr
ease
2011-2012
7585,000
100
2012-2013
7953,66
104.85
4.85
2013-2014
1,6785,086
221.29
121.29
2014-2015
80,82,895
106.56
6.56
ANALYSIS
year of 2011-12,the registration fees has been increased to 7953466, in the year 201314, it has been further increased to Rs16785086 and in the year 2014-15, further it has
been decreased to Rs. 8082895 compared to year 2013-14.
Page 81

GRAPH No: 4.11-Graph showing changes onLand Registration fees
250
200
150
100
50
0
Page 82

INTERPRETATION
has been further increased to 221.29% and again in the year 2014-15, it has been
decreased to106.56% compared to the base year 2011-12 as due to less purchase of
land /sites.
Table No: 4.12-Table showing of changes on Imprestto of Raichur

(Petty Expanses)
Years
Amount(in
Rs)
% as base
year20112012
Increase/Decr
ease
2011-2012
1,22,092
100
2012-2013
45,092
36.93
63.06
2013-2014
56,452
46.23
53.76
2014-2015
48,452
39.68
60.31
ANALYSIS
Page 83

year of 2012-13,the imprestto has been decreased to Rs.45092, in the year 2013-14, it
has been increased to Rs.56452, and in the year 2014-15, further it has been decreased
to Rs. 48452 compared to base year 2011-12.
GRAPH No: 4.12-Graph showing changes on Imprestto of Raychur

(Petty Expenses)
Page 84

120
100
80
60
40
20
0
2011-2012 2012-2013 2013-2014 2014-2015
INTERPRETATION
In order to meet petty expenses this has to done as imprestto from each district .From
the above graph, it is interpreted that the year 2011-12 is taken as base year 100%.
During the year 2012-13, it has decreased to36.93%, compared to last year because as
expenses are less in the year 2012-13 and 2013-14, it has been increased t0 46.23 %
and again in the year 2014-15, it has been decreased to36.68% compared to the base
year 2011-12.
GRAPH No: 4.13-Table showing of changes on On Vacant commercial

shops on hand
Page 85

Year
Amount (in
Rs)
% as base
year20112012
Increase/Decr
ease
2011-2012
2,6983,242
100
2012-2013
66,98,136
24.82
75.17
2013-2014
37,08,453
13.74
86.25
2014-2015
2,53,08,250
93.79
6.20
ANALYSIS
In the year 2014-15, it has increased to Rs.25308250 compared to year 2013-14. From
the above table, it is observed that the year 2011-12 has taken as base year and yearof
2012-13,the vacant commercial shops has been decreased to Rs.6698136, in the year
2013-14, further it has been decreased to Rs.3708453, and year of 2014-15 was
increased toRs.25308250 compared to all years.
GRAPH No: 4.13-Graph showing changes on Vacant Commercial

Shops On Hand
Page 86

120
100
80
60
40
20
0
INTERPRETATION
From the above graph we can interpret that the vacant as % of the company is varying
year by year. . In the year2012-13 and 2013-14 there is an decreases as commercial
shops has been taken for rent or leasehold purpose that is 24.82% and 13.74% when
compared to all the years. In the year 2014-15 there is slightly increased to 93.79.75%
when compared to previous year 2013-14.
Table No: 4.14-Table showing changes on Vacant commercial sites on

hand
Page 87

Years
Amount(in
Rs)
% as base
year20112012
Increase/Decr
ease
2011-2012
35,53,75,985
100
2012-2013
88,08,95,267
247.87
147.87
2013-2014
40,63,22,663
114.33
14.33
2014-2015
1,24,89,35,775
351.44
251.44
ANALYSIS
year of 2012-13,the
vacant commercial sites on hand
has been increased to
Rs880895267, in the year 2013-14, it has been decreased to Rs.4063226633, and in

the year 2014-15, it has again increased to Rs.1248935775 compared to base year
2011-12.
GRAPH No: 4.14

Graph showing changes on Vacant Commercial Sites On Hand
Page 88

400
350
300
250
200
150
100
50
0
2011-2012 2012-2013 2013-2014 2014-2015
INTERPRETATION
From the above graph we can interpret that the income as % of the company is
varying year by year. In the year 2014-15 there is an increase of vacant houses
that
is 351.44% when compared to all the years. In the year 2012-13 there is slightly
increased from 100% to 247.87%. And in the year 2013- 14 there is decreases from
247.87 % to 114.33%.
Page 89

Table No: 4.15-Table showing of changes on Land in possession
Years
Amount(in Rs)
% As Base Year
2011-2012
2011-2012
2,30,53,88,588
100
2012-2013
2,36,34,01,828
102.5
2.51
2013-2014
3,,58,99,43,074
155.71
55.71
2014-2015
4,28,26,99,651
185.76
85.769
Increase/Decrease
ANALYSIS
year of 2012-13,the land was possessed has been increased to Rs.2363401828, in the
year 2013-14, further it has been increased to Rs.3589943074 , and in the year 201415,again it has increased to Rs 4282699651 compared to base year 2011-12.
Page 90

GRAPH No: 4.15-Graph showing changes on Land Possession
200
180
160
140
120
100
80
60
40
20
0
INTERPRETATIION
From the above graph we can interpret that the land in possession increases gradually
from 2011-12, 2012-13, 2013-14and finally from 2014-15 increases from 100%,
102.5% ,155.71% and 185.76 This indicates that the land possessed year by year .
Page 91

Chapter-5
SUMMARY OF FINDINGS, SUGGESTIONS, AND
CONCLUSTION
Findings are very much necessary in a project, where the data

analysis of the study is being highlighted as findings by a
student. I have highlighted how KHB has effectively maintained
LAND ACQUISITION AND COMPENSATION PATTERN as a weapon
to overcome the competition and to earn more profit .
FINDINGS
Karnataka Housing Board is an organisation where quality meets
excellence, technology meets aesthetics and passion meets perfection.
Karnataka Housing Board before setting up a project takes into
consideration various factors like land, availability and technology
adopted environmental aspects and all other preliminary surveys to
ascertain the building viability.
After conducting the entire surveys it prepares a detailed feasibility
project report to estimate the Profit and estimation of tariff payable.
There is an increase of property tax as we compared to 2014-15
financial year to base year.
Cost of sale of land was very high.
The amount of land acquisition payment has been increased from base
year to financial year 2014-15.
The profit of the company was also increases due to sale of land at high
cost.
The advance paid for land has been increases from base year to 2012-13
and 2013-14 later on it is decreased in the year 2014-15.
The amount of sale of marginal land has been decreased in the year
2012-13 later on increased in the year 2013-14 finally decreased in the
year 2014-15.
Sale of marginal land results in sound for public revenues.
Page 92

The income from sale of land has been increased in the year 2012-13
and came down in the year 2013-14 later on it is increased in the year
2014-15.
The cost of houses and sites of the company changes from year to year.
It is increased in the year 2012-13 and decreased in the year 2013-14
later on in the year 2014-15 it is increases.
Land registration fees have been increases year to year, but the land
registration fees as compared in the year 2013-14 and 2014-15 it is
decreased in the year 2014-15.
The activities of the company decided among to their specialised and
there is proper departments like Finance and Accounting department,
Human resource department, personnel department and marketing
department Etc....
Page 93

SUGGESTIONS AND CONCLUSIONS

SUGGESTIONS
In order to ensure orderly development of housing projects in the State,
the Government needs to ensure that KHB acquires land on the basis of
demand and also after prior consultation with the jurisdictional Planning
Authorities.
The Government needs to address the issue of fixation of cost of land
acquired on the basis of market value, if required, by framing guidelines
prescribing the procedure for fixation of cost of land. This is essential to
guard against high price being paid, based on demand of the land owner
or middle men.
KHB needs to revise its Rules for allotment of different categories of sites.
It also needs to frame appropriate guidelines to ensure that there is
transparency in allotment of CA sites.
CONCLUSIONS
KHBs functioning, especially with regard to selection of locations for
housing projects, was not effective as acquisition of land for housing
projects was not driven by demand. Instead, direct purchase of land in bits
and pieces from those volunteering to sell the land by mutual consent was
the determining factor for selection of locations for the housing projects.
The
Page 94

residual land required for the housing projects was acquired under the LA
Act, 1894 by paying the compensation determined for direct purchase.
Lack of policy or rules for direct purchase of land facilitated arbitrary
purchase of land directly from volunteers at inordinately high rates.
There was no prior consultation by KHB with the other jurisdictional
Planning Authorities to ensure that land earmarked for parks and roads in
the Master Plan of the Local Authority were not notified for housing
purpose.
KHB violated prescribed procedures while inviting tenders and managed
the contracts inefficiently resulting in excess payment/undue benefit to
the contractors. The adoption of prior costing method in determining
selling price for the sites / houses developed in various projects resulted in
financial loss as KHB could not recover the entire expenses made in
acquiring and developing the land/houses. The allotment of various
categories of sites by KHB was not consistent with the rules. CA sites had
been allotted directly without notifying these to public and unjustifiable
concession in price had been extended to several allot tees.
Management of CA sites by KHB was ineffective as many CA sites had
been used for unauthorised purposes while many others remained
unutilised. Many properties of KHB remained encroached upon and no
serious efforts were made by KHB to clear the encroachments and restore
the properties to its fold.
Page 95

BIBLOOGRAPHY
AUTHOURS REFFERED
Ramachandran v.g., The land acquisition and compensation
Bansal B.L.,Law of Acquisition of land in India
Chawla Jagjit singh, Digest of land acquisition and
compensation cases.
WEBSITESSSS
http://www.Fao.org/nr/iten/iten en .htm
http://www.indianews.org.in/better-compensation-in -land acquisition/archives/2986
www.jstor.org
www.springerlink.com
Page 96

ANNEXURE
Page 97

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A STUDY ON LAND ACQUISITION AND COMPENSATION

PATTERN FALLOWED AT KHB, BENGALURU

production, processing or fabrication of goods and services.

goods for sale with the object of making profit.

1.5 SERVICE INDUSTRY

A STUDY ON LAND ACQUISITION AND COMPENSATION

1.6 TYPES OF SERVICE INDUSTRY

A STUDY ON LAND ACQUISITION AND COMPENSATION

The construction industry generates substantial employment.

1.9 INDIAN CONSTRUCTION INDUSTRY: DEVELOPMENT

A STUDY ON LAND ACQUISITION AND COMPENSATION

1.10 CLASSIFICATION OF CONSTRUCTION PROJECTS

Residential building construction

1.11 KARNATAKA HOUSING BOARD

INDIAN ACADEMY DEGREE COLLEGE

A STUDY ON LAND ACQUISITION AND COMPENSATION

environmental infrastructure for all. The twin problems of affordability and

A STUDY ON LAND ACQUISITION AND COMPENSATION

1.14 ORGANIZATION PROFILE

1.15 DEMAND FOR HOUSING IN KARNATAKA

A STUDY ON LAND ACQUISITION AND COMPENSATION

Composite Housing Schemes

A STUDY ON LAND ACQUISITION AND COMPENSATION

ACTS RULING KHB

ESTABLISHMENT EMPLOYEES) (ABSORPTION IN THE HOUSING

A STUDY ON LAND ACQUISITION AND COMPENSATION

individual rights need to be protected in economic development. In general, land is

Tamil nadu for

A STUDY ON LAND ACQUISITION AND COMPENSATION

1. Determining the value of land and the adequacy of compensation:

A STUDY ON LAND ACQUISITION AND COMPENSATION

7. The types of others benefits that can be given to the land-losers:

A STUDY ON LAND ACQUISITION AND COMPENSATION

development of Infrastructural facilities (or)urbanisation of the private land , and

A STUDY ON LAND ACQUISITION AND COMPENSATION

2. Objections and confirmation:

of three years from the date of preliminary

notification under section 4(1) of the LA Act.

INDIAN ACADEMY DEGREE COLLEGE

A STUDY ON LAND ACQUISITION AND COMPENSATION

1.23 HISTORY OF LAND AQUISITION 1894

A STUDY ON LAND ACQUISITION AND COMPENSATION

1.24 EVOLUTION IN LAWS FOR LAND ACQUISITION

INDIAN ACADEMY DEGREE COLLEGE

A STUDY ON LAND ACQUISITION AND COMPENSATION

In addition, if any damages are incurred on land excluded from acquisition

INDIAN ACADEMY DEGREE COLLEGE

A STUDY ON LAND ACQUISITION AND COMPENSATION

Market value of the land to be computed by Percentage of Sale Deeds:

The Bill requires the company to offer shares or debentures. By

All the provisions discussed above regarding the fixation or determination of

1.25 ISSUES OF COMPENSATION :

INDIAN ACADEMY DEGREE COLLEGE

A STUDY ON LAND ACQUISITION AND COMPENSATION

PROVISIONS OF COMPENSATION UNDER THE LAND ACQUISITION

INDIAN ACADEMY DEGREE COLLEGE

A STUDY ON LAND ACQUISITION AND COMPENSATION

A STUDY ON LAND ACQUISITION AND COMPENSATION

A STUDY ON LAND ACQUISITION AND COMPENSATION

DEVELOPMENT POLICY 2009-2014

INDIAN ACADEMY DEGREE COLLEGE

A STUDY ON LAND ACQUISITION AND COMPENSATION

1.26 NEED FOR A FAIR AMOUNT OF COMPENSATION :