Karnataka Budget 2025-26: Special Purpose Vehicle to drive infra development in Bengaluru, grants increased to ₹7,000 crore

Water supply in the city is set to receive a significant boost with the successful completion of the ₹5,550 crore Kaveri Stage-V project, which will supply an additional 775 MLD of water to 50 lakh residents in 110 newly-added BBMP villages. Plans are underway to develop a Detailed Project Report (DPR) for Kaveri Stage-VI​.

Karnataka government has announced a substantial increase in funding for Bengaluru, alongside the establishment of a new Special Purpose Vehicle (SPV) to oversee key projects in the city in the State Budget.

The yearly grant for Bengaluru, which previously stood at ₹3,000 crore, has been more than doubled to ₹7,000 crore. This infusion of funds is expected to drive large-scale urban improvements, with the SPV ensuring effective implementation of priority projects​. The SPV is likely to implement big ticket infrastructure projects in the city. However, the outlay has not outlined the projects for the SPV.

Among the most significant announcements is the redevelopment of Majestic bus stand under the ‘Project Majestic’ scheme. This initiative, to be executed through a public-private partnership model, envisions transforming the city’s busiest transport hub into a state-of-the-art commercial complex integrated with a modern transit system.

A state-of-the-art Bengaluru Signature Park will be developed on 407 acres at Devanahalli. An amount of ₹50 crore has already been released for building a flyover to provide connectivity to this area.

Further strengthening Bengaluru’s mobility infrastructure, the budget has guaranteed ₹19,000 crore to the Bruhat Bengaluru Mahanagara Palike (BBMP) for the development of North-South and East-West tunnel corridors, part of a larger ₹40,000 crore urban transport upgrade.

Additionally, a 40.5 km double-decker flyover will be constructed at a cost of ₹8,916 crore, in conjunction with Namma Metro Phase 3, promising to ease congestion on the city’s roads.

The city will see an expansion of its road network with an investment of ₹3,000 crore to build 300 km of new roads using canal buffer zones, along with the development of 460 km of arterial and sub-arterial roads at a cost of ₹660 crore.