industrial policy final 2014 19
TRANSCRIPT
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Karnataka Industrial
Policy 2014-19(Final Draft)
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Industrial Policy 2014-19 Final Draft 2
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Industrial Policy 2014-19 Final Draft 3
Contents1. Introduction................................................................................................... 4
2.
Vision........................................................................................................... 10
3. Mission......................................................................................................... 10
4. Strategies..................................................................................................... 10
5.
Policy Measures............................................................................................. 11
5.1. Comprehrensive Infrastructure Development ........................................................................................ 11
5.2. Human Resource Development........................................................................................................... 16
5.3. Investors Facilitation ..20
5.4. MSME Development......................................................................................................................... 22
5.5. Sustainable Industrial G rowth Technology Transfer and Upgradation Support............................................ 25
5.6.
Regional Balanced Growth ................................................................................................................ 27
5.7. Special focus on promotion of manufacturing industries.......................................................................... 28
5.8. Special thrust for encouraging SC/ST, Women, Minority, PH and Ex-Servicemen entrepreneurs..................... 34
5.9. Support for promotion of Khadi, Artisan and Coir sector .......................................................................... 34
5.10. Special Thrust for encouraging Industrial Development in Hyderabad- Karnataka Area........ ........... ........... ....35
5.11. Attractive Standard & Specail package of incentives and concessions........................................................ 35
5.12. Smooth exit, revival and relocation policy............................................................................................. 35
6. Milestones / Review / Monitoring..................................................................... 36
7.
Budgetary provision....................................................................................... 38
8.
Expected benefits to the State. ....................................................................... 42
9. Implementation mechanism .......................................................................... 43
10. Annexure 1 Classification of Taluks................................................................ 44
11. Annexure 2................................................................................................... 49
11.1. Attractive Standard & Specail package of incentives and concessions........ ...... ..... .... ...... ..... ...... ...... ...... ... .49
12.
Annexure 3.................................................................................................. .58
12.1. List of Service Enterprises eligible for package of Incentives and Concession ............................................... 58
13. Annexure 4................................................................................................... 59
13.1. List of Industrial Activities / Enterprises not eligible for Incentives and Concessions ...................................... 59
14. Annexure 5................................................................................................... 61
14.1. Definitions and Terms &Conditions ............... .................... ..................... .................... ..................... .... 61
15. Annexure 6...................................................................................................66
15.1. Important contacts .......................................................................................................................... 66
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Introduction
India Economic outlook
The Planning Commission has set an average GDP growth target of 8% for the 12thPlan. Thesector-wise
average GDP growth targets for Agriculture, Industry and Services are 4%, 7.6% and 9% respectively. To register
significant economic growth, revival of investment in industry and key infrastructure sectors is very important.The
growth in Gross Domestic Product (GDP) at factor cost at constant (2004-05 prices) is estimated (provisional
estimate) at 5.0% in 2012-13 with agriculture, industry and services registering growth rates of 1.9%, 2.1% and
7.1% respectively. Also, it is crucial to accelerate the output of core sectors and speed up implementation of crucial
big ticket projects, while laying emphasis on research and development and adequate availability of skilled
manpower to improve India's competitiveness in the manufacturing sector.
Foreign Direct Investment (FDI) Scenario
India witnessed cumulative FDI inflows of INR 19,266 billion (USD 3,09,012 million) from April 2000 to October
2013 as per Department of Industrial Policy and Promotion (DIPP) data. FDI inflows received during financial year
2013-14 (from April, 2013 to October, 2013) were INR 1,177.74 billion (USD 18, 934 million). During 2012-13, India
attracted FDI worth INR 1394.64 billion (USD 22.42 billion) with hotels, tourism, pharmaceuticals, services,
chemicals and construction receiving higher investment. The major contributors to the Indian FDI are made by US,
Japan, UK, UAE and Germany.
From 2007 to 2012, India received a total of 4981 FDI projects with a total investment of INR 20278.88 billion (USD
$326 billion) and generated 1.4 million jobs making India the fourth largest recipient of FDI in the world and
second largest in the developing countries. The government opened gates to foreign investors in 13 sectors
including petrol and natural gas, insurance, tea plantation, courier, credit information firms, defence production
industries etc. It liberalized FDI regime allowing 100% FDI in Telecom sector, Power and 51% FDI in multi brand
retail sector and 100% in retail single brand. This liberalized FDI policy which is termed as second wave in
economic reforms could lead to continuous upsurge in FDI and bring in much needed foreign investments to the
country.
Imports and Exports
The opening up of the Indian economy has greatly increased the role of trade. In the Eleventh Plan, the total share
of merchandise exports and imports as a proportion of GDP rose from 36.4 per cent to 45.6 per cent.
Important Legislations and programmes of Government of India
o National Competitiveness Programme was announced in 2005 with an objective to support the
Small and Medium Enterprises (SMEs) in their endeavor to become competitive and adjust to
the competitive pressure caused by liberalization and moderation of tariff rates. Some of the
schemes introduced as a part of the programme include:
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o Marketing Support/Assistance to MSMEs(Bar Code)
o Support for Entrepreneurial and Managerial Development of SMEs through Incubators
o Enabling Manufacturing Sector to be competitive through Quality Management Standard &
Quality Tech. Tools (QMS/QTT)
o Building Awareness on Intellectual Property Rights (IPR) for MSME
o Lean Manufacturing Competitiveness Scheme for MSMEs
o Design Clinic Scheme for design expertise to MSMEs Manufacturing sector (DESIGN)
o Marketing Assistance & Technology Up-gradation Scheme in MSMEs.
o Technology and Quality Upgradation Support to MSMEs
MSMED Act 2006, was introduced to provide for facilitating promotion, development and enhancing
competitiveness of micro, small and medium enterprises.
Automotive Mission Plan 2006-16 was introduced with a vision to increase the output of the sector to INR
9019.75 billion (USD 145 billion) and create additional employment for 25 million persons by 2016.
In 2011, the Government of India announced a National Manufacturing Policy with the objective of
enhancing the share of manufacturing in GDP to 25% within a decade and creating 100 million jobs.
The Ministry of Food Processing Industries launched a Centrally Sponsored Scheme - National Mission on
Food Processing (NMFP) during 12th Plan. The NMFP contemplates establishment of National Mission as
well as corresponding Missions in the state and District level to promote food processing sector acrossIndia.
Indias National Action Plan on Climate Change, launched in 2008, establishes eight National Missions.
Among these are the National Solar Mission with the aim of generating 20 gigawatts of solar power by
2022; the National Mission for Enhanced Energy Efficiency; and the National Water Mission, which aims
to increase water use efficiency by 20 percent, among other goals.
Companies Bill, 2011: It aims to enhance transparency in company operations, improve corporate
governance and strengthen regulation for corporates and auditing f irms. It also makes it mandatory for
profit- making companies to spend two percent of their profit for community welfare as per CSR.
Land acquisition Act 2013 has been approved and will replace the Land acquisition Act of 1894.
Science, Technology and Innovation Policy (STI), 2013 emphasises on innovation and setting up research
facility with an aspiration to place India among the top five scientific powers in the world by 2020. The
Policy targets increase in gross expenditure in R&D to 2 per cent of Gross Domestic Product from the
current 1 per cent in this decade by supporting increased private sector participation.
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Karnataka
Today, Karnataka is home to
6.11 crore people (2011 Census)
and accounts for 5.05% (5.14%
in 2012) of India's population.
The State's population has
grown by 15.7% during the last
decade, while its population
density has risen from 276
persons per sq. km in 2001 to 319
in 2011, indicating an increase of
about 15.6% during the
corresponding period.
Karnatakas industrial growth between FY 2005-06 and FY 2011-12 was 7.39% as against India s 7.93%.
Karnataka GSDP has grown at 5.9% to reach INR 3, 03,444 crorein 2012-13 (constant price) against Indias 5%.
Bangalore has been at the fore front of attracting both domestic and foreign investments. The state has been able
to attract considerable amount of FDI across various sectors. Between April 2000 and October 2013, Karnataka
received FDI to the tune of INR 54,508 crores. From 2009-10 to 2013-14, the State High Level Clearance
Committee (SHLCC) cleared 484 projects worth INR 671460.21 crores with employment potential for 22, 72,064
persons. In the same period, State Level Single Window Clearance Committee cleared 2041 projects worth INR
31794.25 crores with employment potential for 466640 persons. Karnatakas export of INR 2, 58,368.53 crore
during the period 2012-13 constitutes 12.69% of all India exports. Karnataka s share in national exports for
electronics and software constitute about 38% and for product exports constitute 6.3%. Share of electronics and
software in state exports stands at 60% for the period 2012-13.
In the 11th Five Year plan, the economy could not grow at the pace as planned due to global slowdown witnessed
since the beginning of 2008, uncertain and challenging macroeconomic situation globally and nationally, and the
widespread drought situation in the State. However, the Government of Karnataka is determined and poised to
accelerate the process of its economic growth so as to achieve its vision of an inclusively developed State. It
undertook several initiatives to maintain the growth of the state economy and came out with numerous policies to
support sector and industrial growth. Some of the policies released by the state include:
Figure 1: Karnataka's Growth Rate of GSDP/GPD in Industry Sector
(Source: Economic Survey of Karnataka, Planning Commission)
8.4
17.1
10.8
5.1
-1.5
8.3
2.42.4
9.7
12.2
9.7
4.4
9.2 9.2
3.5
2.1
-5
0
5
10
15
20
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Karnataka India
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SN Policy Department Source/Link
.Karnataka Tourism policy
, 2009- 14
Department of Tourism,
Government of Karnataka
http://karnatakatourism.org/policy/tourism
policyeng.pdf
.
Renewable energy policy-
2009-14
Department of Energy,
Government of Karnataka
http://www.gokenergy.gov.in/govt_on.htm
l
.Solar policy, 2011- 16 Department of Energy,
Government of Karnataka
http://www.gokenergy.gov.in/documents/S
olar%20Policy%20English.pdf
.
Karnataka State policy
for special economic
zones 2009
Department of Industries and
Commerce, Government of
Karnataka
http://karnatakaindustry.gov.in/documents
/StatePolicyforSpecialEconomicZones2009
withAmendments.pdf
.
Karnataka and aerospace
policy 2012
Department of Industries and
Commerce, Government of
Karnataka
http://www.karnatakaindustry.gov.in/Old-
document/AerospacePolicy%20_CII_%201
_6.pdf
.
Semiconductor policy
2010
Department of IT /BT and
Science & Technology,
Government of Karnataka
http://kumappsonline.com/newsletter/imag
es/jan2013/downloads/semiconductor%20
brochure.pdf
.
Information and
Communication
technology policy 2011
Department of IT /BT and
Science & Technology,
Government of Karnataka
http://www.bangaloreitbt.in/docs/2012/09/
Informanton&CommunicationsTechnology
Policy.pdf
.
Millennium biotech policy Department of IT /BT and
Science & Technology,
Government of Karnataka
http://www.bangaloreitbt.in/docs/2012/09/
Biotech_Policy_II.pdf
.
Karnataka animation,
visual effects, gaming
and comics policy 2012
Department of IT /BT and
Science & Technology,
Government of Karnataka
http://www.bangaloreitbt.in/docs/2012/09/
KAVG%20Policy.pdf
0.
I4 ( IT, ITES, Innovation,
Incentives ) policy
Department of Information
Technology, Biotechnology
and Science & Technology,
Government of Karnataka
http://www.bangaloreite.biz/IT_2013/pdf/K
arnataka-i4-Policy.pdf
http://www.pdfcomplete.com/cms/hppl/tabid/108/Default.aspx?r=q8b3uige22http://karnatakatourism.org/policy/tourismpolicyeng.pdfhttp://karnatakaindustry.gov.in/documents/StatePolicyforSpecialEconomicZones2009withAmendments.pdfhttp://karnatakaindustry.gov.in/documents/StatePolicyforSpecialEconomicZones2009withAmendments.pdfhttp://karnatakaindustry.gov.in/documents/StatePolicyforSpecialEconomicZones2009withAmendments.pdfhttp://www.karnatakaindustry.gov.in/Old-document/AerospacePolicy%20_CII_%201_6.pdfhttp://www.karnatakaindustry.gov.in/Old-document/AerospacePolicy%20_CII_%201_6.pdfhttp://kumappsonline.com/newsletter/images/jan2013/downloads/semiconductor%20brochure.pdfhttp://kumappsonline.com/newsletter/images/jan2013/downloads/semiconductor%20brochure.pdfhttp://www.bangaloreitbt.in/docs/2012/09/Informanton&CommunicationsTechnologyPolicy.pdfhttp://www.bangaloreitbt.in/docs/2012/09/Biotech_Policy_II.pdfhttp://www.bangaloreitbt.in/docs/2012/09/KAVG%20Policy.pdfhttp://www.bangaloreite.biz/IT_2013/pdf/Karnataka-i4-Policy.pdfhttp://www.bangaloreite.biz/IT_2013/pdf/Karnataka-i4-Policy.pdfhttp://www.bangaloreitbt.in/docs/2012/09/KAVG%20Policy.pdfhttp://www.bangaloreitbt.in/docs/2012/09/KAVG%20Policy.pdfhttp://www.bangaloreitbt.in/docs/2012/09/Biotech_Policy_II.pdfhttp://www.bangaloreitbt.in/docs/2012/09/Biotech_Policy_II.pdfhttp://www.bangaloreitbt.in/docs/2012/09/Informanton&CommunicationsTechnologyPolicy.pdfhttp://www.bangaloreitbt.in/docs/2012/09/Informanton&CommunicationsTechnologyPolicy.pdfhttp://www.bangaloreitbt.in/docs/2012/09/Informanton&CommunicationsTechnologyPolicy.pdfhttp://kumappsonline.com/newsletter/images/jan2013/downloads/semiconductor%20brochure.pdfhttp://kumappsonline.com/newsletter/images/jan2013/downloads/semiconductor%20brochure.pdfhttp://kumappsonline.com/newsletter/images/jan2013/downloads/semiconductor%20brochure.pdfhttp://www.karnatakaindustry.gov.in/Old-document/AerospacePolicy%20_CII_%201_6.pdfhttp://www.karnatakaindustry.gov.in/Old-document/AerospacePolicy%20_CII_%201_6.pdfhttp://www.karnatakaindustry.gov.in/Old-document/AerospacePolicy%20_CII_%201_6.pdfhttp://karnatakaindustry.gov.in/documents/StatePolicyforSpecialEconomicZones2009withAmendments.pdfhttp://karnatakaindustry.gov.in/documents/StatePolicyforSpecialEconomicZones2009withAmendments.pdfhttp://karnatakaindustry.gov.in/documents/StatePolicyforSpecialEconomicZones2009withAmendments.pdfhttp://www.gokenergy.gov.in/documents/Solar%20Policy%20English.pdfhttp://www.gokenergy.gov.in/documents/Solar%20Policy%20English.pdfhttp://www.gokenergy.gov.in/govt_on.htmlhttp://www.gokenergy.gov.in/govt_on.htmlhttp://karnatakatourism.org/policy/tourismpolicyeng.pdfhttp://karnatakatourism.org/policy/tourismpolicyeng.pdfhttp://www.pdfcomplete.com/cms/hppl/tabid/108/Default.aspx?r=q8b3uige22 -
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SN Policy Department Source/Link
1.Integrated Agri- business
development policy 2011
Department of Agriculture,
Government of Karnataka
http://www.karnataka.gov.in/Documents/I
ntegrated-AgriBusiness2-RN-8pm.pdf
2.
Karnataka
Pharmaceutical policy
2012
Health and Family Welfare
Department, Government of
Karnataka
http://www.advantagekarnataka.com/ima
ges/sector-
profiles/Biotechnology&Pharmaceutical.pd
f
3.
New textiles policy 2013-
18
Department of Handlooms
and Textiles, Government of
Karnataka
http://www.karnatakaindustry.gov.in/docu
ments/SUVARNA%20VASTRA%20NEETHI
-2008-13.pdf
Impact of 2009-14 Industrial Policy
As against the targeted Investment of INR 3.00 lakhs Crores and employment generation for 10.00 lakh
people, around 1200 large enterprise proposals were approved during the policy period , with an investment of
INR6,95,000 crores and employment generation for 25,86,000 people. Out of which few have already
implemented and many of them are under various stages of implementation. Besides, 101366 MSMEs have
been established with an investment of INR8400 crores and employment generation for 6,40,000 people.
Land bank concept has been established and through which Government has initiated action foracquisition of 1,15,000 acres and out of which 31,000 acres of land is finally notified for development.
Action has been has initiated for supply of tertiary treated water to augment the water scarcity and to
adopt water conservation measures.
Action has been initiated for establishment of Sector specific parks namely, Pharma, Aerospace, Spice,
Jewelry, IT/BT, ITIR, Hardware Park, Food, Textile, Apparel, etc.
For effective maintenance of the industrial area, a separate industrial township is constituted for
Electronic City in Bangalore District, as a pilot project.
Industries facilitation act 2002 is amended to facilitate Single Window Mechanism to work more
effectively with more powers, particularly at District levels.
Online application filing system is introduced to facilitate the new investors to file their applications for
project clearance, across the World
KaigarikaAdalats at Divisional and District level have been conducted to sort out the various issues of
Industries.
Global Investors Meet 2010 & 2012 have been conducted successfully to showcase the investment
opportunities existing in the state to domestic and international investors and mobilize investments .
http://www.pdfcomplete.com/cms/hppl/tabid/108/Default.aspx?r=q8b3uige22http://www.karnataka.gov.in/Documents/Integrated-AgriBusiness2-RN-8pm.pdfhttp://www.advantagekarnataka.com/images/sector-profiles/Biotechnology&Pharmaceutical.pdfhttp://www.advantagekarnataka.com/images/sector-profiles/Biotechnology&Pharmaceutical.pdfhttp://www.advantagekarnataka.com/images/sector-profiles/Biotechnology&Pharmaceutical.pdfhttp://www.karnatakaindustry.gov.in/documents/SUVARNA%20VASTRA%20NEETHI-2008-13.pdfhttp://www.karnatakaindustry.gov.in/documents/SUVARNA%20VASTRA%20NEETHI-2008-13.pdfhttp://www.karnatakaindustry.gov.in/documents/SUVARNA%20VASTRA%20NEETHI-2008-13.pdfhttp://www.karnatakaindustry.gov.in/documents/SUVARNA%20VASTRA%20NEETHI-2008-13.pdfhttp://www.advantagekarnataka.com/images/sector-profiles/Biotechnology&Pharmaceutical.pdfhttp://www.advantagekarnataka.com/images/sector-profiles/Biotechnology&Pharmaceutical.pdfhttp://www.advantagekarnataka.com/images/sector-profiles/Biotechnology&Pharmaceutical.pdfhttp://www.advantagekarnataka.com/images/sector-profiles/Biotechnology&Pharmaceutical.pdfhttp://www.karnataka.gov.in/Documents/Integrated-AgriBusiness2-RN-8pm.pdfhttp://www.karnataka.gov.in/Documents/Integrated-AgriBusiness2-RN-8pm.pdfhttp://www.pdfcomplete.com/cms/hppl/tabid/108/Default.aspx?r=q8b3uige22 -
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In order to provide required trained man power to the industries various Skill Development Training
Programmes were conducted
More than 4000 MSMEs are extended with various incentives and concessions to an extent of more than
INR 250 Crores.
State Govt. has established 13 Skill Development Training Centres in association with Private Institutions
under PPP Module.
6 services are considered under SAKALA Act for timely disposal.
Now, the state intends to consolidate the strategies and achievements made so far by intensifying governance
reforms, ensuring effective targeting of subsidies and better monitoring, and instituting a process of informed
decision making through independent evaluation.
One such key initiative is the formulation of a new Industrial Policy 2014-19 that will encourage investors and
entrepreneurs to develop market, bring in technology and provide employment opportunities and spreadindustrialization and development to the most backward areas of the state. In this policy, the government has
envisioned undertaking a holistic approach towards promotion of industrial development in the State through
development of human & natural resources, creation of new employment opportunities, increasing share of
industry in the State GDP, development of MSME sector and promotion of skill development and
entrepreneurship.
Apart from the providing special incentives to the industry, Government of Karnataka is also committed to
providing right infrastructure and business environment. Ensuring availability of quality Land, Water, Power and
Labour is the top priority of the state.
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2.Vision
To make Karnataka the most preferred investment destination through inclusive, sustainable and balanced
growth.
3.Mission
To establish Brand Karnataka in the global market
To take Karnataka among the top 3 investment destinations in the country
To enhance the contribution of manufacturing sector to the State GDP to 20% by end of policy period.
To attract minimum investment of INR 5 Lakh crores
To create additional employment for 15 lakhs persons by 2019
4.Strategies
4.1.
Comprehensive Infrastructure Development programmes
4.2.
Thrust for Human Resource Development
4.3.
Better Investors Facilitation mechanism
4.4. Priority for MSMEs Development
4.5. Importance for export promotion
4.6.
Quality improvement
4.7.
Sustainable Industrial Growth, Technology Transfer and Upgradation Support
4.8.
Thrust for Regional Balanced growth
4.9.
Special focus on promotion of manufacturing sectors
4.10.
Special thrust for encouraging SC/ST, PH, Ex-Servicemen, and Women entrepreneurs
4.11.
Support for promotion of Khadi& Village industry, Artisan and Coir Sector
4.12.
Attractive package of incentives and concessions
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5.Policy Measures
5.1. Infrastructure Development with special focus on promotion of
private industrial estates
5.1.1. Development of Integrated infrastructure for industrial development
a. To promote new state industrial corridors and industrial areas in and around National
Investment and Manufacturing Zones (NIMZ)and proposed Industrial Corridors
Government of Indias (GoIs) National Manufacturing Policy (NMP) 2011 proposes development of
NMIZs across the country, where in NIMZs would be large areas of developed land, with the requisite
eco-system for promoting world class manufacturing activity. They would be different from SEZs in
terms of size, level of infrastructure planning, and governance structures related to regulatory
procedures and exit policies.
To enable the NIMZ to function as a self-governing and autonomous body, it will be developed as an
integrated industrial townships with state-of-the art infrastructure and land use plan on the basis of
zoning, clean and energy efficient technology, necessary social infrastructure and skill development
facilities, etc.
NIMZs would be managed by Special Purpose Vehicles (SPVs) which would ensure master planning of
the Zone; pre-clearances for setting up the industrial units to be located within the zone and
undertake such other functions as specified in the various sections of the NMP.
The State Government of Karnataka has proposed to establish National Investment and
Manufacturing Zones (NIMZ) in the state at Tumkur, Bidar, Gulbarga andKolar.
b. Establishment of Knowledge City Corridor
Development of a knowledge city corridor between Bangalore and Mysore to promote knowledge
based and knowledge intensive industries will be proposed.
c. State Government has proposed to establish two industrial corridors in the state with the support of
Government of India, viz. Chennai Bangalore Chitradurga Industrial corridor and Bangalore
Mumbai Economic corridor. The corridors will have separate industrial nodes for industrial
investments.
State will also explore option for setting up of State industrial corridors along:
i. Bangalore Hassan Mangalore Udupi Karwar
ii. Bangalore Mandya Mysore Chamarajnagar
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iii. Bellary - Hubli - Goa
iv. Chitradurga Koppal Raichur Gulbarga Bidar
Efforts will be made to encourage development and alignment of new industrial areas/ estates along
the NMIZs and industrial corridors and manufacturing units.
d.
To create full-fledged sector specific industrial zones where investors can set up industries on
plug and play basis
A new policy for industrial area/ estate development will be explored where the State would look at
creating Special Investment Zones for focus sectors. Efforts will be made to establish these
investment zones in all districts and will be managed by a single SPV. All regulatory and statutory
approvals for the development of the investment zone and for establishment of industry in these
investment zones would be taken by the SPV.
It is proposed to set up one such sector specific industrial zone in each revenue division, during the
policy period.
5.1.2. Promotion of Private Industrial Estates/Parks
a) To create quality and sustainable industrial infrastructure across the State through private
participation to build a vibrant Karnataka
The State Government has taken several initiatives to create quality infrastructure for industries
across the State. Specialised agencies like Karnataka Industrial Areas Development Board (KIADB)
and Karnataka State Small Industries Development Corporation (KSSIDC) have been playing key
roles in creating industrial infrastructure. Due to growth in industrialization, the demand for
industrial infrastructure has been increasing steadily in the recent years.
KIADB & KSSIDC are putting substantial efforts to meet the demand from new and existing investors
by way of developing new industrial areas and estates. In spite of this, the gap between demand and
supply still exists, creating setback for investors in establishing their projects in the State.
State Government has identified industrial infrastructure development as a priority and it is
envisaged to encourage private players in developing industrial infrastructure in the State to augment
the activities being carried out currently by KIADB and KSSIDC towards easing availability of land
required for industries.
.
b)
Land for Private Industrial Layouts / Parks
Land would be made available to the proponents for development of Private Industrial Layouts /
Parks by one of the following procedures:
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Permission to purchase landsfrom land owners for development of private industrial Estates / Parks
subject compliance with land use pattern in the approved Master Plan.
To utilize proponents own land for development of private industrial Estates/ Parks subject
compliance with land use pattern in the approved Master Plan.
Allotment of bulk land in areas acquired by KIADB / Government bodies to the Private investors /
developers for Industrial Layouts / Parks. Suitable sub-leasing arrangements along with flexible terms
& conditions would be specified.
Acquisition of private lands by the State Government on demand for development of Private
Industrial Layouts / Parks, where atleast 80% consent has been obtained by the proponent, through
Single Window Mechanism/ Empowered Committee. Such lands would be transferred / leased to the
Developer/ Co-developer on easy terms. The private Industrial Estates will be setup with the
minimum of 50 to 75 acres of land in the most potential talukas to expediate the development of
Small and Micro Sector
c) Guidelines for land acquisition
Guidelines for land acquisition to be adopted as per The Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
Minimum Rehabilitation and Resettlement (R&R) entitlements and benefits to be evolved in
conjunction with KIADB Act and The Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013.
d) Creation of comprehensive infrastructure
In order to create world-class infrastructural facilities, the Developer or Co-developer shall be insisted
to develop, construct and install all basic support infrastructure like road, bridge, power generation,
transmission and distribution, water supply, UGD system in the industrial estates / parks.
Private players need to create support services like gas distribution network, communication and data
network transmission, waste water treatment and solid waste management, warehouse etc., in the
industrial estates / parks.
Private Player will also be the operating agency for operating, managing and maintaining all the
infrastructure facilities, amenities and support services on pay and usebasis.
e) Focus on orderly development of infrastructure
Developer of a private industrial area shall focus on development of industrial estates / parks in an
orderly manner as per prevailing national / international best practices. Setting up of sector specific or
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cluster specific industrial estates/ parks at potential locations will be encouraged. Also segregation of
plots will be mandatory to reflect separate earmarked area for highly polluting industries.
Note : Incentives and Concessions offered for formation of private industrial areas / estates are
as per Annexure -2 & 5 respectively.
5.1.3. Up gradation and maintenance of existing industrial infrastructure
a. Introduction of Industrial townships.
State government shall take immediate steps to notify large industrial areas viz. Peenya, Mysore,
Bommasandra, Belgaum, Hubli, etc as Industrial townships under the Township Act.
A minimum of 5 townships is proposed to be establish with Necessary budgetary support after
notification
b.
Upgradation of existing industrial areas :
A holistic scheme for enhancement of existing industrial areas wherever such industrial area is not
covered under the Township Act will be introduced. The scheme will propose to create a healthy
system of continuous grading, upgradation and marketing assistance with appropriate cost recovery
mechanism will be introduced. New industrial areas/ estates will also be graded as per the provisions
of proposed scheme.
The standard benchmarks for the grading of industrial areas and estates will be developed separately
and all industrial areas/ estates will be subject to third party audits for grading.
It is proposed to upgrade minimum 30 Industrial Areas per annum with a budgetary provision of INR
100 Crores per annum, for upgradation of pre-defined minimum critical infrastructure in existing
industrial areas/ estates based on category grades for upgrading to a higher category grade.
Government of India schemes for upgradation of existing industrial infrastructure such as Modified
Industrial Infrastructure UpgradationScheme(MIIUS), etc. will be explored and benefits will be
leveraged wherever applicable.
c. Maintenance of industrial areas on PPP mode
KIADB may expand its scope of services to include effluent treatment plants, provision of power,
water and quality access roads for a select number of large industrial areas, on its own or in PPP
mode.
d. To develop world class support infrastructure for industries
KIADB will create an action plan to develop multi-floor industrial buildings in for industrialisation in
and around Bangalore, Mysore, Belgaum, Hubli-Dharwad, Bellary, Mangalore, and Udupi where land
is scarce and the cost of acquisition / development is very high.
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e. WATER:
To encourage supply of Secondary / Tertiary treated water to existing / proposed notified
industrial areas
Programme already proposed are as under :
o 60 MLD of water proposed for Devanahalli&Doddaballapura Industrial Areas.
o 50 MLD of water proposed for Kolar, Narasapura, Vemgal, Hoskote, Malur and
Mastenahalli Industrial Areas.
Programmes to be proposed during policy period are as under :
o Mysore, Mangalore, Dharwad, Tumkur, Belgaum, Gulbarga, etc.
f.
POWER:
State Government has initiated various measures to augment the power shortage and expected to
attend self sufficient by 2017. Besides in order to encourage energy conservation measures and also
to generate and consume power through non-conventional energy sources, various incentives and
concessions are offered and listed in Annexure-2
Further, in order to make available the required land to private entrepreneurs for setting up power
generating units the procedure for purchase of Agricultural land or conversion for non-agricultural
purpose will be made easier.
5.1.4. Regulatory Reforms
a. Acquisition of land, creation of land bank for industrial development
It is proposed to create more land banks in the state for the development of manufacturing
sector and develop these lands on PPP module
Guidelines for land acquisition to be adopted as per The Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
Minimum Rehabilitation and Resettlement (R&R) entitlements and benefits to be evolved in
conjunction with KIADB Act and The Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013.
Efforts will be made to promote usage of waste, barren, karab, dry and single crop land for acquisition
of land for industrial purposes. This could be achieved by way of identifying minimum 500-1000 acres
of such land in each talukas under the Comprehensive Development Plan (CDP) of the talukas
Inventory of surplus and unused land available with PSUs, State Government, and suitable private
land will be made to create a ready to use GIS mapped Land Bank for industrial development. This
will enable the State to offer ready to use land to investors.
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Suitable mechanism shall be adopted for effective utilisation of the land.by imposing penalties
and forfeitures for inaction by Promoters and delays in implementing the projects after land
allotment for more than 2 years.
FAR, will be increased from the present average levels of 1.0 to 3.0, specifically for plots in industrial
parks and average ground coverage will be increased from 45-50% to 70%. This will be applicable
both to existing and proposed projects. This measure would release significant amount of land in
existing industries and reduce the need to procure or provide more land for industry.
Necessary amendments will be proposed for Karnataka Land Reforms Act, to reduce the time taken in
according approval for purchase of land under Section 109 and also for converting agriculture land for
industrial purposes.
Karnataka Industrial Area Development Board (KIADB) and Karnataka State Town Planning Board
maintain different standard requirements for Floor Area Ratio (FAR) for industries. Floor Area Ratio
for industry projects will be standardised between the two departments to provide better facilitation
for investors.
Lands allotted for industrial purposes will not be allowed to be used for any other purpose other than
industrial purposes.
Facilitate purchase of land upto 25 to 30 acres without extensive regulatory procedures and
permit deemed conversion for such land within stiputated time. Necessary Amendments to
the Karnataka Land Reforms Act will be proposed.
5.2. Human Resource Development
5.2.1. Skill Development
a)
Focus on provision of skill development and upgradation
It is proposed to constitute a skill development and upgradationcommittee with members from
industry, academia and government. The sole responsibility of the committee will be to assist the
government in its efforts to align the curriculum of Industrial Training Institutes(ITIs), Polytechnics,
Government Tool Room & Training Centre (GT&TC), District Industrial Skill Training Centres(ATIs),
and other allied institutes with the requirements of Industries so as to create job ready employable
workforce.
Quality management programmes, soft skills training and entrepreneurship skills to be made an
integral part of skill development curriculum.
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b) Focus on trainers training programme
A trainers training programme will be designed in collaboration with industries and with assistance of
National Skill Development Corporation (NSDC) and other Skill Development Training Institutes
.These learning programmes will be funded by the state with assistance from Government of India
schemes to help trainers in skill development institutes to update themselves on latest technology
and industry standards.
c) Revival and upgradation of Training Centres
State will also focus on revival of redundant and obsolete training institutes and strengthening of
existing apprenticeship programme. Artisan Training Institutes(ATI) in Karnataka, will be given due
support for upgradation through private participation by converting them into Skill Development
Training Centres, thereby training can be imparted in highly skilled and advance courses
A minimum budgetary support of INR50 lakhs for upgradation of infrastructure facilities for each
centre and 25 lakhs per annum as training cost per centre. It is proposed to revive atleast 3 ATIs per
annum.
d)
Utilisation of Private Infrastructural facilities for imparting training programmes
Provision will be made to allow private industries to collaborate with GT&TC and other allied
institutes to conduct training programmes for students andtrainers using their facility and
infrastructure, periodically, on new technologies in the market. Subsequently, industries conducting
such programmes may also be allowed to issue certificate equivalent to that issued by skill
development centres with prior approval of Department of Technical Education and Department of
Commerce and Industries and under pre-defined guidelines.
Such industries may be subsidised for the cost of training, certification and usage of private
infrastructure subject to provision of employment for 85% of trained students.
e) On job training programme
Training for 10000 unemployed youths with a suitable provision of stipend per candidate as
Government contribution with equal matching contribution from employer will be provided.
f)
Promotion of Information and Communication Technology (ICT) :
Extensive use of Information & Communication Technology (ICT) will be promoted for learning in skill
development centres through upgradation of existing ICT infrastructure where available and provision
of new infrastructure in institutes where there is requirement.
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g) Labour Market Information System (LMIS)
One of the priorities of the department in this policy term period will be to create a dedicated Labour
Market Information System (LMIS) to enable realistic assessment of economic trends and labour
market needs. This information system will be set up at both state and district levels to help in
planning for skill demand, supply and remuneration and other requirements.
h) Provision of manpower requirement (with skill category and number) by industries at the time of
filing of application for single window approval and or for incentives under state policies will be
made mandatory.
Council for Vocational Education and Research/ or any other nodal agency will be appointed as nodal
agency for regional mapping of demand & supply of available and projected skilled labour. The nodal
agency will be responsible for aligning supply of skilled candidates from training institutes to skill
requirements of area specific industry and services clusters. Skill development centres will act as
support bodies of the nodal agency for conducting the regional mapping.
i)
Focus on institutional support and infrastructure development
An infrastructure gap assessment of skill development centres in the State will be conducted and a
task force will be created for development of new physical infrastructure for skill development and
upgradation , and existing institutes will be upgraded and expanded according to skill requirement of
specific sectors/ industries.
It will be mandatory for existing and new Industrial Areas in the state with more than 100 acres of
land to have a dedicated facility for skill development and training centres.
GT&TC will be set up in every district and the current GT&TC infrastructure and training programmes
to be strengthened through central government assistance and State government funding.
State will explore new avenues of partnership with private agencies for establishing skill development
and vocational training centres under PPP especially in rural and remote areas.
State shall explore options for utilization of existing education infrastructures in ITIs/ Colleges/
Schools for corporate sponsored skill upgradation trainings will be encouraged and optimum use of
existing physical infrastructure will be ensured in multiple shifts.
j)
Focus on equal access to skill development for all social groups.
Reservation in skill development centres will be provided for Scheduled Castes, Scheduled Tribes,
Persons with Disabilities, Ex-Servicemen and women to encourage participation.
Dedicated vocational training institutes will be created through public private participation, atleast
one in each revenue division, for women while adopting proactive measures that overcome barriers
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and facilitate participation ofwomen for skill development and creation of employment ready women
workforce. Facilities such as hostel for women, scholarships, transport, training materials and loans,
will be made available for the students of the institute.
5.2.2.
Entrepreneurship Development
a) Focus on fostering entrepreneurship through education
Centre for Entrepreneurship Development of Karnataka (CEDOK) to develop zone-wise sector-wise
modules for Entrepreneurship Development Programmes inclusive of industry visit and interaction to
enable entrepreneurs to focus on regional opportunities
Centre for Entrepreneurship Development of Karnataka (CEDOK) to introduce Entrepreneurship
Development Programmes for entrepreneurs and conduct them on a regular basis across districts.
Programmes for existing entrepreneurs could be in the area of Technology Up gradation, Product
Diversification, Quality Marks, National and International Strategies against W.T.O., International
Market and Export procedures.
b)
Linkage with GOI Schemes
Benefits and incentives under the Trade Related Entrepreneurship Assistance and Development
Scheme for Women (TREAD), Technology based and Skill based Entrepreneurship Development
Programmes sponsored by Ministry of Science and Technology, Government of India and Skill-cum-
Entrepreneurship Development Programme (ESDP) sponsored by Ministry of MSME, Government of
India will be dovetailed with state initiatives in entrepreneurship development by CEDOK. The
participants of these schemes will be provided with hands-on training in indigenous technologies
developed by R&D institutions that are available for commercial exploitation.
c)
Focus on setting up Entrepreneurship Incubation Centres
It is proposed to set up an Entrepreneurship Incubation Centre for manufacturing based industries and
for Research & Development with common facilities such as centralized reception, front office,
photocopying and printingfacilities, inters office and external communication facilities in all four
regions of the state. These four incubation centres will be developed by CEDOK/ TECSOK
independently, or in PPP and admission to occupy such facility will be based on merit and predefined
guidelines as outlined by the Department of Commerce & Industries from time to time.
d) Focus on fostering entrepreneurship through information
Efforts will be made through guidance cells in each district to create entrepreneurship awareness
programme for the students of ITIs, Polytechnic, Engineering, Pharmaceuticals, Ayurvedic, Science,
Arts, Commerce Colleges, Management institutes in respective districts
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Entrepreneur Information handbooks containing guidelines on all the procedures and formalities of
setting up and operating a business in Karnataka will be prepared and distributed through guidance
cells
e)
Other areas of support for entrepreneurship development
State will set up a dedicated Entrepreneurship Development Fund of INR 50 Crores every year to
improve access to finance for first time entrepreneurs who show potential and have proven their
merit.
State will create district level Entrepreneurship Ambassadors from amongst industry captains to
promote entrepreneurship amongst youth though regular interaction and education.
f) Encouraging Entrepreneurship Ambassadors and Awards
State and district level entrepreneurship awards and rewards will be created to encourage
entrepreneurship. Winners will be given an opportunity to get on the job training from government
recognised entrepreneurship ambassadors and will be eligible to grant from the state.
5.3.
Investor Facilitation
5.3.1. To provide online and transparent facilitation mechanism for all investments proposals
A one stop online information centre will be established for Industrial Areas/ estates to enable
i. Application system for land in industrial areas/ estates
ii.
Profile and detailed information system for all industrial estates/ areas
iii. Grievance Redressal Mechanism
iv. A common website indicating district-wise details of industrial areas with particulars of
industries and products manufactured, exports, and infrastructure details such as land,
power, water, common support infrastructure availability, etc. will be introduced at
Directorate of Industries &Commerce/ KIADB/ KSSIDC. This will allow new investors to plan
their investments and support existing industry through marking opportunities.
5.3.2. To provide online and transparent facilitation mechanism for all investments proposals
As appointed by the Karnataka Industries Facilitation Act 2002, Karnataka UdyogMitra (KUM) will
continue to act as the nodal agency at the State level to undertake investment promotional activities
and to render necessary guidance and assistance to entrepreneurs to setup industrial undertaking in
the State. KUM will act as the central facilitation cell for all investors in the state and will be the first
point for receiving of all investment applications/ proposals.
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The state has made continuous endeavours to decrease cost and increase accessibility and
transparency of the investment application system in the state. It has recently introduced an online
facilitation portal for investors and departments to apply, approve, track and monitor the proposals in
an effective manner. This online application system will be extended to include submission of an
online Combined Application Form for investment proposals. This extended system will facilitate the
investors in submitting, tracking and getting the approvals online without visiting multiple
departments.
Government will make efforts to introduce an online system for tracking MSME investments at the
district level through DICs and district level facilitation cells. It will also set up an online dedicated
Grievance Redressal Mechanism for investors.
5.3.3. To strengthen single window mechanism to facilitate the investors to avail all clearances
through one nodal agency
Projects approved and authorised for implementation by the State High level Clearance Committee
(SHLCC), and or State Level Single Window Clearance Committee (SLSWCC) and or District Level
Single Window Clearance Committee (DLSWCC) appointed by the Karnataka Industries Facilitation
Act 2002, will be valid and binding on all line departments.
Opinion is to be sought from relevant line departments for projects where application is filed with
KUM (Information and fees provided by investor is complete in all formats) and placed before
approval committee for approval. The timeframe for receiving such opinions from line departments
has been defined as 90 days by the State and can be revised by the state from time to time. Investors
having clear possession of land will be given all clearances/ approvals after filing of application with
KUM provided line departments do not submit any objection when their opinion is sought. Investors
not having clear possession of land will only be given in-principal approval and final approval will be
given after clear possession of land.
All the regulatory approvals (except land) required under the SHLCC and SLSWCC for s will be
provided within 90 days of the receipt of the application in Karnataka UdyogMitra
5.3.4. To streamline and simplify procedures for industrial investments
A comprehensive study for regulatory simplification will be undertaken by government to reduce time
& cost of compliance to government procedures for industrial investments. All regulatory and
statutory approvals required for project clearances will be covered in the study and necessary actions
will be taken against recommendations of the study for regulatory simplification across all
departments.
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State shall explore the possibility of removing the Trade license system or simplifying the trade license
for manufacturing industries.
All application processes and procedures for new investments in the state will be made available in
one place in the KUM website and respective departmental processes and procedures will be made
available on their respective websites.
5.3.5. To provide better investor facilitation through improvement in information accessibility, and
awareness
Government will establish dedicated trade offices in countries that attract maximum foreign direct
investment and have strategic advantage to Karnataka. These offices will help build strategic
relationship through active dialogue with governments and industry of the local country, enhance
social & cultural ties through promotion of exchange programmes, and attract investment through
active engagement with local industry. These offices will also facilitate bilateral trade through
education, research, trade promotion, networking and other information support.
Government will make available provision of dedicated liaison officer to facilitate easy clearance for
critical and strategically advantageous projects.
Investorsmeets and road shows will be organized regularly at State / National/International level to
attract large scale investment to the State.
Industrial Adalats will be organized regularly at District / State level with a view to understand the
problem of industries and to settle pending cases.
Investor Information Handbook and Industrial Statistical Handbook will be prepared on an annual
basis to help investors with necessary information on various industrial areas, incentives, procedures,
doing business guidelines and industry statistics
Going forward more approvals for investors facilitation will be brought under SAKALA
5.4. MSME Development
5.4.1. To provide thrust on development of MSME sector through attractive package of incentives,
concessions and benefits
In order to extent technical support to M S ME Sector it is proposed to establish the Technology
Development Centre at NIMZ Tumkurwitbudgetory support of Rs150-200 crores funded by Ministry of
MSME, GOI for which State Govt. will made available 15 acres of land free of cost.
MSME sector investing in the state will be eligible for an attractive package of incentives, concessions
and benefits as per Annexure 2.
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Government to earmark minimum 20 30%extent of allotable land in KIADB industrial areas for
MSMEs wherein further reservation of 20%, 30% and 50% of allotable land would be made available
for micro, small and medium enterprises respectively.
Department of Industries will conduct an annual vendor development event at the State levelto bring
together MSMEs and large manufacturers/Public Sectors. Similar events at the District level also will
be conducted.An online system will be created for tracking of collaboration/vendor opportunities for
MSMEs.
Government may examine the possibility of exempting all MSME projects falling under the green
category and not included in the list of polluting industries from obtaining CFE/ CFO from Karnataka
State Pollution Control Board (KSPCB).
State will evolve a mechanism to reduce uncoordinated and irregular inspections conducted by various
line departments to ease burden on MSMEs.
Government will plan for awarding MSMEs for achieving excellence through growth in production and
profit, quality and environment improvement measure.
Selected recipients from each district would get priority for sponsored participation in national and
international trade fairs.
5.4.2. To promote Made in Karnatakabrand through market development initiatives
Goods and products manufactured locally in the state will be given preference over those
manufactured outside the state in case of all purchases made by government departments and
government undertakings except where there is limited option available locally and or the
department has specific or urgent requirements.
Preferential pricing of 15% will be allowed for the goods manufactured by MSMEs in the state in case
of purchases by the government departments and government undertakings.
5.4.3. To promote sector specific MSME cluster development and business incubation centres
a) Development of Rural Industrial Areas for MSME
Development of separate rural small industrial areas for Micro, Small and Medium Industry with
enabling infrastructure, viz. road connectivity, drainage system, street lighting, and water supply will
be initiated by KIADB.
State government will provide land, power and water at subsidized prices.
Rural small industrial areas will have minimum 100/ 150 plots per district per year measuring 2000 sq.
ft to 10000 sq. ft. and plots shall be allotted only to non-polluting industries.
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Land will be allotted to Micro, Small and Medium Enterprises in the ratio of 25%, 35% and 40%
respectively.
A budgetary provision of INR60 Crores per annum will be made available to subsidise the plot cost.
b)
Cluster Development
Benefits under Micro and Small Enterprises Cluster Development programme of Government of India
will be facilitated for MSME cluster development. The objective of the scheme is to support the
sustainability and growth of MSEs by addressing common issues such as improvement of technology,
skills and quality, market access, access to capital, etc. It also seeks to build capacity for MSEs,
create/ upgrade infrastructural facilities in the industrial areas/clusters of MSEs, and to set up
common facility centres.
The Karnataka Council for Technological Upgradation (KCTU) will continue to be the monitoring /
nodal agency on behalf of the State Government for the Micro and Small Enterprises Cluster
Development Programme that has been launched by the Ministry of Micro, Small and Medium
Enterprises.
Realising the need for MSME clusters, GoK will be launching a scheme for development and up
gradation of existing clusters.Under the phase 1 ofscheme a sum of INR 20 crore per annum, will be
earmarked for upgradation of existing clusters and development of new clusters.Under this scheme
the state will also develop a comprehensive MSME development plan for the state. Under this scheme
the state will also provide viability gap funding for setting up of business incubation centres in the
KIADB industrial areas under PPP mode. Under the phase 2 of the scheme the state will create districtlevel master incubator to provide district level implementation support to MSMEs and Entrepreneurs.
5.4.4. Institutional strengthening for implementation of existing & new schemes
A nodal agency shall be appointed for creating awareness, implementing and monitoring of existing
and new state and central government schemes and programmes for MSME development.
5.4.5. To promote state exports through a separate export policy
State Government is contemplating to come out with dedicated State Export promotion policy and
IPR Policy to promote exports from Karnataka.
5.4.6. Quality Improvement
Quality improvement interventions by state MSMEs such as upgradation of existing and installing of
new technologies for quality control, cleaner environment friendly production, quality testing, and
fees paid f or quality certifications would be eligible for one time subsidy through reimbursement of
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actual costs. This benefit would be available for MSMEs who have already taken benefits under
central government schemes and would like to go for renewal.
Details of incentives are as in Annexure 2.
5.5. Sustainable Industrial Growth Technology Transfer and
Upgradation Support
5.5.1. Adopt a sustainable green industrial growth strategy to safeguard and protect the natural
resources of the state
Efforts will be made to adopt a green industrial development program that looks at more sustainable
patterns of production and consumption i.e. patterns that are resource and energy efficient, low-
carbon and low waste, non-polluting and safe, and which produce products that are responsibly
managed throughout their lifecycle while providing sustainable livelihoods and continuous job
creation.
In the long run this measure will help reduce burden on public finances, improve environmental safety,
reduce vulnerability of natural resources, expand coverage of water and energy services and make it
more efficient, reduce health impacts associated with environmental degradation; reduce costs and
increase productivity from technologies that will also ease environmental pressure, etc.
Department of Industries in close co-ordination with Karnataka State Pollution Control Board
(KSPCB) will try to build awareness, educate and engage the industry in reducing environmental
footprint.
Awareness programmes for green manufacturing and sustainable production will be initiated in all
districts through the DIC with active participation of green champions from the local industry on a
regular basis. All green champions from the industries participating in government green awareness
programmes will be allowed credit under CSR programmes, the guidelines for which will be decided in
association with KSPCB.
Department of industries will initiate a study to develop a strategic framework for the state to identify
and prioritize specific interventions required to make industrial growth sustainable.
Department will also conduct a benchmarking study to map the water consumption pattern, energy
consumption pattern, solid waste management practices, discharge practices, etc. of major KIADB
industrial areas in the statewith international standards and best practices. Also specific targets will
be set for various aspects in each sector which will act as the guidelines for all new and existing units.
Any new industry will have to comply with these standards to avail incentives under the industrial
policy and existing units will be encouraged to adhere to the new guidelines with special benefits
under CSR programmes.
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Under the green industrial growth agenda of the state, adoption of following standards will be made
mandatory for all new industries and one time reimbursement of cost facility will be offered to new
and existing MSME units adopting these standards(Details are as in Annexure 2):
i.
Rain water harvesting
ii.
Environmental and Water audit
iii. Wastewater treatment and reuse
Units practicing zero water discharge will be eligible for onetime subsidy on relevant equipment/
technology upgradation(Details as in Annexure 2).
Industries Department will work along with KSPCB to review and rationalize existing list of green, red
and orange categories of industries to reduce avoidable renewable burdens without compromising on
environmental protection needs.
Department of Industries along with KIADB will also initiate a program for greening of minimum 50
existing industrial areas per annum across the State.Under the scheme a funding INR 15 crores will be
provided every year regarding study and implementations of various initiatives.Emphasis would be
placed on developing green industrial parks/estates with a vision for next 20 years.
Adequate land will be compulsorily earmarked in all new industrial areas/ estates for setting up
Common Effluent Treatment Plant (CETP) and other common environment protection measures.
Recycling of electronic waste and setting up of e-waste recycling units will be encouraged and
incentivised.
Green and non-polluting industries will be given preference over polluting and e nvironmentally unsafe
industries while allocation of land in KIADB industrial areas and for allocation of government land.
Also, scholars and entrepreneurs conducting research & development or creating start-ups in the field
of sustainable industrial development and green industries will be given due importance and priority.
5.5.2. Technology Transfer/Upgradation support
To promote world class technology linkages through provision of incentives support for
technology transfer and upgradation to industries located in Karnataka
The state government will encourage Technology Upgradation Schemefor promotion of technology
upgradation in manufacturing sector in the state. The scheme will cater to the needs of both MSMEs.
The scheme will be aimed at providing benefits to the local industry over and above the benefits
available under central government scheme.
The scheme is intended towards capital expenditure for activities like process up gradation, reducing
carbon foot print, reducing the water consumption, reducing power consumption, adoption of new
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technology to improve quality compliance & standards, patent registration, etc. Special emphasis will
be given to adoption of sustainable technologies and processes(Incentives details are as in Annexure
2).
5.5.3.
Adoption and commercialization of technology
The Department of Industries and Commerce will introduce a scheme to run technology transfer
programs in collaboration with domestic & international research institutes/ agencies and technology
transfer agencies. Patent pooling and registration will be undertaken under this scheme. Also, under
the scheme the state will create a shelf of projects along with detailed project reports for projects for
technology adoption.
Under this program specific emphasis will be given to promote export oriented units.
Department of Industries and commerce will run quarterly workshops and seminars through VTPC
&KCTUfor SMEs & entrepreneurs to increaseawareness for adoption of new technologies(Incentives
details are as in Annexure 2).
5.5.4. To promote research & development institutes where no such R&D centre/ facility exists
Recognised R&D centres coming up in zone 1, 2 & 3 and supporting manufacturing industry will be
eligible for a 50% capital subsidy limited to INR 500 Lakhs. Minimum two R & D centres per annum
will be promoted.
5.6. Regional Balanced Growth
5.6.1.
To provide equal opportunity for Industrial and urban development in every
district/region of Karnataka and to create job opportunities for youth and women
across all regions of the society
Depending on the backwardness of the talukas, the State is classified into five zones (details are as in
Annexure -1).
Department of Industries in collaboration with Infrastructure and other social sector departments will
develop a comprehensive Regional Economic Development Framework. The state will also launch a
comprehensive Regional Industrial Competitiveness Improvement Programme (RICIP).
As a part of the regional development initiative, the state has already identified multiple large scale
infrastructure projects like NIMZs & Industrial Corridor development. These initiatives have been
aimed towards creation of multiple Cities as Engines of Growth with a cluster of economically
vibrant Towns around each City.
Another critical aspect of the program will be aligning the industrial development approach with
sector competitiveness of the region through a cluster development approach. As a result six priority
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cities will be identified to be developed on a hub-and-spoke model of inclusive and equally distributed
industrial and economic growth centres cutting across districts and regions in the State.
5.6.2. Promotion and facilitation of industrial investments across districts/ regions
State plans to develop two major Industrial Corridors, ChennaiBangaloreChitradurga Industrial
Corridor and BangaloreMumbai Economic Corridor, and four NIMZs across the state. This will help in
stimulating manufacturing investments across the state.
Proposals for SEZs/ Industrial Areas/ Estates in industrially backward districts would be encouraged
and given top priority
Special incentive for private industrial areas to be setup in backward districts
Government of India has also agreed to provide NIMZ benefits to the manufacturing units coming up
in Information Technology Investment Region in the state.
5.6.3. Anchor Industries
To promote setting up of anchor industries in districts/ taluks/ industrial areas where no such industry
exist so that downstream opportunities for MSMEs can be encouraged and Anchor unit subsidy on
Fixed Assets shall be offered for the firts two manufacturing enterprises per taluk with a minimum
investment of INR 100 crores at minimum employment of 100 persons. The subsidy will applicable
only in Talukas where no Industrial Enterprises of the above investment exists at present. The rate
and amount of subsidy is shown in the package incentives and concessions chapter in Annexure-2.
This subsidy will be applicable only in taluks where no industrial enterprise of the proposed size exists
at present.
5.7. Special focus on promotion of manufacturing industries
Policy measures based on sector specific policies and recommendations of Manufacturing Task Force
(MTF) committee:
5.7.1. Defence and Aerospace Sector
Karnataka has introduced an Aerospace policy, namely the Karnataka Aerospace Policy 2013-23. This
is a first of its kind state level policy on aerospace and defence in India (All aerospace sector
investments and industry would be eligible for incentives and benefits under the Aerospace policy).
Key highlights of the Karnataka Aerospace policy 2013:
i.
Anchor Unit Subsidy INR 500 lakhs for first 10 Aerospace OEM with minimum investment of
INR 50 crore
ii. Exemption from stamp duty & concessional registration charges
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iii. 100% exemption from electricity duty / tax for aerospace units
iv. Interest free loan on VAT
v. Reimbursement of 75% CST for a period of 5 years
vi. 100% entry tax exemption for aerospace units
vii. Special Package of incentives for mega, ultra mega, and super mega projects
viii. Karnataka also has a dedicated industrial park for aerospace companies Bangalore
Aerospace Park, which is currently being set up alongside the Bangalore International
Airport. Efforts will be made to operationalize Bangalore Aerospace Park within 2014 so that
industrial units can start to move in.
5.7.2. Automotive Sector
The state would like to transform Karnataka into an energetic automobile hub of the country by
leveraging advantages and opportunities available for sustained development of the emerging
automobile sector:
i. State will explore setting up of Major Auto Parks at Dharwad, Kolar and Bidadi in
Ramanagara district.
ii.
Also Government will explore setting up of Auto Parks of smaller s ize at potential locations
like Belgaum, Shimoga, Mysore and Gulbarga.
iii.
State proposes to incentivize and institutionalize the R&D environment in the State by
fostering and supporting linkages between industry and academia for free competitive
research.
iv.
Proposed to commission the Karnataka Automobile Research & Innovation Centre in
Karnataka, this would also act as an incubation centre. The centre is proposed to be
established on a PPP model with the State funding up to 50% of the cost.
v.
All Auto Parks to set aside 20% of land for MSMEs.
Measure planned for improving Auto sector competitiveness
i.
Government to set up a venture fund with an initial capital of at least INR 50 crore. (and on
similar lines of IT and Biotech) specifically focused on boosting MSMEs requiring growth
capital and start-up capital the fund should start
ii. Setting up training cells in select clusters focused on specific engineering needs
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iii. Tie up with NSDC (National Skills Development Corporation) to identify private sector
initiatives that can be quickly funded jointly by NSDC and the State in order to train and
provide employment ready personnel to the industry.
iv.
To set up a focus group for addressing the problems of the auto component sector
v.
To explore options for reducing road tax and registration tax to reduce burden on State
Environment through vehicular pollution.
5.7.3. Pharmaceuticals Sector
In January 2013, Health and Family Welfare department of Government of Karnataka released
Karnataka Pharmaceutical Policy 2012, with an objective To make Karnataka a vibrant
pharmaceutical manufacturing hub by leveraging the strengths of knowledge based institutions and
skilled human resource of the State, to provide innovative, quality and affordable health care
solutions to the masses. All pharmaceutical sector investments and industry will be eligible for
incentives under the policy.
Key highlights of the policy are:
i. Setting up of specialised infrastructure for Pharmaceutical sector like Pharma Parks and
Special Economic Zones
ii.
Efforts will be made to encourage setting up of R&D institutions related to pharma sector to
leverage the strengths already available in the State.
iii.
The Government will support selected & reputed pharmaceutical educational institutions insetting up Finishing School for Pharmaceutical Learning across Karnataka.
iv.
Special incentives and concessions to attract mega projects
v.
State Government will set up a Venture Capital Fund with a corpus of INR50 crores with
contribution of 26% from Government
vi. Industries will be supported to go for non-conventional energy sources like solar, wind, bio-
fuel, utilisation of solvent waste for boiler, etc., for their requirements. Adoption of rain
water harvesting, water recycling and other conservation measures will also be supported by
incentives
vii. Common Effluent Treatment Plants (CETPs) to be established in PPP model in Pharma
Parks. SEZs and other clusters of pharmaceutical industries will also be supported by way of
one time grant to augment investments on such CETPs
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Special package of incentives namely concessional power tariff, enhanced VAT loan / grant will be
offered for mega industries engaged in producing value added import substitute products (Details as
in Annexure 2)
5.7.7.
Machine Tools Sector
The Machine tools sector forms the backbone of manufacturing operations in various industries and is
supported by a large base of MSME set ups. The machine tools sector supports key industries such as
automotive, aerospace and defense, textile, heavy engineering and steel, etc. Karnataka produces a
majority of Indias machine tools with the Bangalore area alone producing about 60% of the machine
tools of India in terms of value which is estimated at INR 2,160 crore.
Government of Karnataka has already approved the establishment of machine tools park which will
be significant boost to the sector in the state.
It is proposed to set up a machine tools focused technology incubation centre in the state. Courses to
support creation of skilled employable workforce for the machine tools industry will be introduced in
state skill development centres. Upgrading of existing tool rooms and creation of new tool rooms in
PPP mode will also be explored.
Central government schemes such as ASIDE, MSE-CDP, MIIUS, etc. will be leveraged for the growth
and support of the sector.
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5.8.
Special thrust for encouraging SC/ST, Women, Minority, PH and Ex-
Servicemen entrepreneurs
5.8.1.
To safeguard and uplift entrepreneurs from other social sections through r