Worked Example: Budget for a G+1 Duplex

This lesson builds one document end to end: the budget an owner can sanction, a bank can lend against, and a site engineer can track — for the duplex this module has carried from Lesson 1. Every number is computed, every provision has a rule, and the whole thing fits on three pages. Work through it once with these numbers, then rebuild it with your own project's; the structure is the skill.

The project

• Plot: 30 × 40 ft (1,200 sq ft), tier-2 city outskirts, ordinary soil.
• Building: G+1 duplex, RCC framed, 800 sq ft per floor — 1,600 sq ft built-up.
• Specification: standard finish — vitrified tiles, granite kitchen, branded wiring and sanitaryware, emulsion paint.
• Schedule: 12 months, starting after monsoon to keep slab casts out of the sand-restriction window.
• Delivery model: owner-managed — owner buys material on dealer accounts, a thekedar executes civil work on labour rates, specialist trades contracted per point/fixture.
• Financing: construction loan sanctioned ₹27,00,000; balance owner equity.

All rates are indicative mid-2026; rebuild with your city's current quotations.

Step 1 — Thumb-rule sanity check

Competitive quotes put standard finish at ₹1,950 – 2,350 per sq ft; the detailed estimate (Modules 2–4 methods) prices the drawings at ₹33,60,000, i.e. ₹2,100 per sq ft — inside the standard band of ₹2,000 – 2,600. The estimate passes the band check; had it landed at ₹1,600 or ₹3,000 for this spec, the estimate — not the band — would get re-audited.

Step 2 — Base cost: everything the sq-ft rate hides

Line C varies sharply by municipality — put your local body's actual fee schedule here, not an allowance.

Step 3 — Contingency (risk-table derived, Lesson 4)

Named risks × probability × impact = ₹1,88,000 (5.0% of base). Held in its own line, spent only through the contingency register.

Step 4 — Escalation provision

12-month schedule, 6% p.a. assumed input drift: 37,60,000 × 0.06 × 0.5 = ₹1,12,800 (3.0%). Drawn only against documented price differences on unbought quantities.

Step 5 — The sanctionable budget

Effective cost: ₹2,538 per sq ft — 21 percent above the naked thumb rate, every rupee of the difference named. This is the total the family plans against and the number quoted to the bank. (If you are comparing against buying a flat instead: developer prices quote on RERA-defined carpet area, this budget is on built-up area — convert before comparing, or the flat will look falsely expensive.)

Step 6 — Stage plan (construction cost, from Lesson 2)

Foundation and plinth 12% (₹4,03,200) · RCC frame 24% (₹8,06,400) · masonry 10% (₹3,36,000) · plaster and waterproofing 8% (₹2,68,800) · flooring 10% (₹3,36,000) · doors-windows 9% (₹3,02,400) · electrical 7% (₹2,35,200) · plumbing 7% (₹2,35,200) · painting 6% (₹2,01,600) · site development and handover 7% (₹2,35,200). Sums to exactly ₹33,60,000 — the reconciliation identity that makes variance tracking possible.

Step 7 — Cash flow by quarter

Rolling up the monthly projection from Lesson 5, plus the timing of the non-construction lines (design fees early, external works late):

Step 8 — Bank tranche mapping

Loan ₹27,00,000 (75% of construction + external works, ₹36 lakh). Indicative tranche schedule agreed with the lender — always confirm your bank's own slabs in writing:

Owner equity covers the balance: 40,60,800 − 27,00,000 = ₹13,60,800, deployed first (banks disburse after owner margin is visible in the work) plus the ₹5 – 6 lakh peak-burn float from Lesson 5. Note T5: the last ₹2.7 lakh arrives only with the completion certificate — plan Q4 finishing cash from your own float, not from T5.

Running the budget: the three-column habit

From day one, every stage carries three numbers: planned (this document), committed (orders placed, agreements signed), and spent (bills certified). Example from month 3 of this build:

The variance rule: any stage drifting past 2 percent gets explained in writing the month it happens, and the remaining budget is re-forecast. Twelve small course corrections beat one year-end shock.

How this file protects your money

The finished budget is not just arithmetic — it is the evidence architecture for the whole build. Concretely: the signed rate-and-inclusions page (Lesson 1) plus this budget defeats the "that was extra" claim; the stage completion definitions and dated photos (Lesson 2) move bank tranches and settle thekedar bills; the challan-matched material records (Lesson 3) kill both dealer over-billing and "material extra" claims; the contingency register and base-price schedule (Lesson 4) turn price-spike standoffs into arithmetic; the planned-vs-actual S-curve (Lesson 5) proves who delayed what. If a dispute ever escalates — consumer forum, arbitration, or just a hard negotiation — the party holding this file states facts while the other side tells stories. That asymmetry, built in one hour a month, is the real return on this module.

Common mistakes at assembly

• Sanctioning the base cost instead of the total. A family that plans ₹37.6 lakh has already decided its provisions will become debt.
• Quoting the bank a different number than the family plans. One budget, one total; the loan estimate and household plan must be the same document.
• Skipping the re-forecast. A budget last updated at month one is archaeology by month eight.
• Letting the provisions merge. The day contingency and escalation blur into "the buffer", both rules die.

Where this goes next

The budget tells you what everything should cost. Making reality obey it — supplier rate tracking, quotation comparison, PO discipline and material reconciliation — is cost control, and it is the whole of the next module.