A large-scale housing scam has come to light in the Haveri district of Karnataka, where contractors reportedly received payments from the housing department for the construction of houses, but beneficiaries have built the structures themselves. This was reflected during a recent meeting with Haveri District against-Charge Minister Shivanand Patil, who then ordered an official investigation into the case. The findings, which were consulted exclusively by India today, are based on an official inspection report that was submitted to the deputy commissioner in May 2025.
The housing department, which traded on behalf of the Karnataka Slum Development Board, was responsible for building residential units in the Haveri district under the Pradhan Mantri Awas Yojana – Housing for All (Pmay -HFA) schedule. According to the protocol, the Department is intended to complete the construction and transfer the houses to the slum, which in turn allows them to beneficiaries.
However, the inspection report submitted to the deputy commissioner in May 2025, however, reveals broad irregularities in Savanur, Shiggaon and BankApur Taluks. Many contractors reportedly informed beneficiaries that they would only provide building materials and workers that are equivalent to 350 square feet, whereby the actual construction on the beneficiaries fell. Even this support was only partially provided in many cases, with materials that were delivered only a maximum of 50 percent and the labor costs remained unpaid.
In Savanur, where 696 houses were punished at a total costs of RS 43.71 Crore, 545 houses were completed while 151 were still ongoing. The work started in October 2021 and was carried out by M/S Nakshathra infrastructure under contractor Selvi Shanmuga. Although RS 28.97 CRORE has been released so far and RS 10.54 Crore paid to 527 beneficiaries under the Gruha Bhagya schedule, the report notes that many houses remain incomplete. During site inspections, civil servants discovered that the plaster and electrical connections were still awaiting, and the actual construction was carried out by beneficiaries themselves with only partial help.
In BankApur, 454 houses were punished with an estimated costs of RS 27.76 Crore. Contractor G Chandregouda started working in October 2021. At the time of the inspection, only 100 houses were completed, 154 were still under construction and 200 were being treated due to problems with cleaning up the site. Financial progress was on RS 12.32 CRORE, of which RS 7.57 Crore was released. RS 3.74 Crore was paid to 187 beneficiaries under Gruha Bhagya. The same pattern was also reported here: beneficiaries received partial material, no labor and electricity was not available in different houses. Some beneficiaries had built houses beyond the approved size, reportedly without official support.
Shiggaon had two packages of housing. In the first package, 500 houses were punished for an amount of RS 26.54 Crore, with work that started in July 2021 by contractor Krishnamurthy & Co. While 474 houses were completed and 26 remained in progress, only RS 17.92 Crore were released from a financial target of RS 25.35 Crore. RS 3.42 Crore was divided among 171 beneficiaries. Here too, contractors were reportedly absent during inspections. The beneficiaries said they have built the houses themselves with partial support and not provided labor costs. Despite the construction, different houses had no electricity, in which contractors did not respond to complaints.
In the second package for Shiggaon, 350 houses were punished with a budget of RS 20.77 Crore. Contractor TN Paramesh from Chair Ventures LLP started work in July 2021. According to the report, 160 houses were completed and 190 were underway, with RS 11.96 Crore and RS 4.65 Crore paid to 242 beneficiaries. The inspection found similar concerns: contractors were missing in the sites, beneficiaries reported incomplete support and officials were informed at the location of the lack of contractor involvement.
About the three Taluks, the report identifies a consistent pattern of malpractice: contractors reportedly invoiced the full amount, while they had only provided partial materials, the labor costs could not pay and often remained absent or did not respond. The beneficiaries were left to complete the construction themselves, sometimes built beyond the approved area. Basic facilities such as plastering and electricity connections often were missing.
The official report, dated May 8, 2025, was submitted by the Savanur sub -division together with executive engineers from the public work department, Panchayat RAJ Engineering Division, the Rural Water Supply and Sanitation department and the Karnataka Slum Development Board. The report called for the necessary action and was sent to the deputy commissioner of Haveri for further procedures.
The revelations come into the aftermath of a political storm caused by a leaked audio clip with so -called MLA BR Patil congress in which he accuses civil servants of the Rajiv Gandhi Housing Corporation of large -scale corruption, including bribery in home relationships.
In the clip, Patil is heard, officials accused in connection with the Rajiv Gandhi Housing Corporation of widespread corruption, claiming that houses were only allocated to those who paid bribes. He also claims that recommendations from elected representatives were routinely ignored. The conversation is said to be between Patil and Sarfaraz Khan, personal assistant from Minister of Housing Zaerer Ahmed Khan.
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