Karnataka Industrial Policy
Karnataka Industrial Policy
Karnataka Industrial Policy
Annexure
Introduction
Karnataka is one amongst the industrially developed States in the
Country. The State has all potential to stand out on the fore front and has
been focusing on development of industries, trade and service sectors.
The State Government understands that the challenges poised due to
global economic recession have to be addressed to promote economic
growth of the State. A stimulus to boost economic activities needs to be
given to sustain the current pace of over all development. Further, the
State is endowed with rich natural resources across the State and such
resources need to be optimally utilized for the benefit of local people.
Value addition to resources is one of the ways of optimizing the wealth
available locally. This will also help ensure uniform spread of industries
and economic activities throughout the State and will accelerate the pace
of development especially in the districts of North Karnataka. Through
these measures, the Government would be able to readdress the serious
issue of regional imbalances in development.
The State Government realizes the limitation of agriculture sector to
generate large scale employment to the local youths. About 56% of the
States workforce is estimated to contribute 19.13% of the GSDP. It is
the agreed fact that, the manufacturing sector has high potential to create
maximum employment that too, to all sections and levels of job
aspirants.
Vision
To build prosperous Karnataka through development of human and
natural resources in a systematic, scientific and sustainable manner.
Mission
3.1
3.2
3.3
3.4
Strategies
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
Additional incentives for entrepreneurs belonging to underprivileged sections of the society to bring them to the main
stream in order to achieve much needed inclusive growth.
4.13
4.14
4.15
4.16
Policy Measures:
5.1
Streamlining
development
land
acquisition
process
through
inclusive
5.1.1 Efforts will be made to identify and utilize government waste lands in
different parts of the State for employment generating industrial
activities.
5.1.2 Inventory of surplus and unused land available with PSUs, State Govt.,
ULBs and suitable private land will be made to create a Land Bank.
This will enable the State to offer ready to use land to investors.
5.1.3 In order to speed up the process of land acquisition for the purpose of
industries, a clear cut land acquisition policy will be evolved in
consultation with farmers and industry. In this policy, necessary
measures will be spelt out to ensure that only dry land and single crop
land will be acquired for industrial purposes. Further, while issuing
notification, lands wherein temples, crematoria, schools, playground and
residential houses are located shall be excluded. The policy will also
ensure offering an adequate Relief & Rehabilitation (R&R) Package to
the land owners whose land is acquired for development purpose.
Suitable amendments will be made to Section 109 of Karnataka Land
Reforms Act to facilitate investors for purchasing agricultural land.
Quality Infrastructure
ii)
iii)
iv)
v)
vi)
vii)
x)
Bangalore
(R)
and
10
11
5.4
5.4.1 The State Govt. realises the potential of SEZs in driving industrial /
economic growth and committed to facilitate exports and expedite
establishment of Special Economic Zones (SEZs) in the State.
5.4.2 Single point clearance will be given for SEZ proposals before
recommending to the Govt. of India for approval. Attractive fiscal
benefits will be offered to developer and unit operating in the SEZ in
accordance with the SEZ Act 2005, enacted by Govt. of India.
5.4.3 State Govt. will pronounce an exclusive SEZ Policy to support and
encourage healthy proliferation of SEZs in the State.
5.5
Skill Development
5.5.1 Emphasis will be given for development of skilled manpower for the use
of industry and trade. Focus will be given on skill upgradation in the
emerging skill sets while phasing out redundant skills.
5.5.2 The State Govt. will promote private sector investments for skill
development through a market driven approach.
5.5.3 Thrust will be given for skill development amongst women to enhance
their employability.
5.5.4 Regular industry-institution interface is encouraged to identify skill sets
required for the industry and to develop such skill sets in the training
institutions.
5.5.5 The Directorate of Employment and Training will spearhead all the
activities related to skill development. Initiatives taken by the Skill
Development Commission constituted by the Govt. and activities of the
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Entrepreneurship Development
5.6.1 Thrust will be given for promotion of self employment by local youth
through proper backup support and facilitation. All efforts will be made
to inculcate entrepreneurial qualities amongst youth, with a special focus
on women entrepreneurs. More thrust will be given to motivate youth
belonging to under privileged sections of the society. CEDOK will take
a leading role in these activities.
5.6.2 Counseling and handholding mechanism will be strengthened by
dovetailing Rajiv Gandhi Udyami Mitra Yojana introduced by the
Central Government.
5.6.3 To motivate the prospective entrepreneurs, Guidance Cell in the DICs
will be strengthened. This cell will help entrepreneurs both at entry and
implementation level.
5.6.4 Necessary support will be provided to micro level Enterprises to
graduate to higher level in due course of time. Escort services will be
provided by the Guidance Cell in this growth process. Karnataka
Kaigarika Darshana will be arranged every year benefiting the
entrepreneurs to have wider exposure on successful ventures across the
State/ other States.
5.6.5 Industries are also encouraged to participate in trade fairs / exhibitions
both national and international not only to promote their products and
services but also as learning process.
13
5.7
5.7.1 The former President of India, Dr. A P J Abdul Kalam, in his address to
the members of the Karnataka Legislature on the occasion of Suvarna
Karnataka Celebrations, had advocated 11 Missions for Karnatakas
prosperity.
5.7.2 Of these, Missions on Textiles, Bio-fuel, Agro processing and
Entrepreneurship are related to industries sector. As envisaged by the
Government, exclusive task forces will be set up to take the Mission of
Dr. Kalam forward and achieve tangible results during the policy period.
5.7.3 Price preference of 15% will be allowed for the goods manufactured by
MSM manufacturing industrial Enterprises located in the State in case of
purchases by the Govt. departments and State owned PSUs.
5.7.4 Attractive package of incentives will be offered especially in backward
areas to provide competitive edge to the sector. Emphasis will be given
for industrialization of border taluks. Efforts will be made to develop
industrial infrastructure in these taluks in addition to offering added
incentives to attract investments especially from the neighboring States
to these taluks.
5.7.5 Market development and promotion will be supported through setting up
virtual and physical exhibition centres at State & district levels.
Common branding and promotion of MSME products are also
encouraged.
5.7.6 Cluster development approach will be encouraged for development of
enterprises in order to harness natural resources and skills concentrated
in the respective cluster. A thorough analysis of the industries that have
competitive advantage and resource availability in the surrounding
regions will be made. This will lead to identification of clusters and
14
their pillar industries at the taluk / district / region level. An action plan
for each cluster / region will be made once they are identified and
pro-active measures through policies, concessions and promotions will
be made to selectively promote them. KCTU will be made a Nodal
Agency to promote clusters in the State.
5.7.7 Realising the need for encouraging Khadi & village industries, the State
will come out with a special programme for promotion of this sector.
5.7.8 Thrust will be given to increase the labour productivity as that is the
key to improved returns and greater output especially in MSMEs.
Simplification of laws and procedures will also be attempted to reduce
the transaction cost.
5.7.9 While developing new industrial areas by KIADB, atleast 20% of the
developed land will be reserved for MSME sector. Further, preference
will be given to the local entrepreneurs/underprivileged sections of the
society while allotting the land earmarked for MSME sector. Relocation
of industries from city centres to out skirts will also be supported
suitably.
5.7.10 Relevant schemes like ASIDE, Credit Guarantee Fund Trust Scheme,
Cluster Development Programme for MSMEs, Credit Linked Capital
Subsidy Scheme, Technology Upgradation Scheme being operated by
Government of India and various Promotional Schemes of different
Ministries of Govt. of India will be suitably dovetailed for the benefit of
MSM Enterprises. The State will also suitably complement these
schemes enabling the entrepreneurs to avail maximum advantage of
these schemes. A separate cell to co-ordinate and monitor
implementation of these schemes will be set up in the Department
of I & C.
15
16
5.9
Promotion of Exports
5.9.1 The State has initiated several measures to promote exports of both
primary and manufactured products as also services. The State has all
strengths to increase its exports manifold and it is targeted to double the
exports of State from the current level by the end of policy period.
5.9.2 VITC, the Export Promotion Centre for Karnataka will provide initial
services in market intelligence, export documentation, finance and other
critical areas to the Enterprises. Incentives will also be provided for
technology upgradation / sourcing of technology to meet the
specifications of international buyers.
5.9.3 Special incentives will be offered for Export Oriented Enterprises for
obtaining compulsory certifications like Conformity Europeenne (CE),
China Compulsory Certificate (CCC), etc., for enhanced export
competitiveness.
5.9.4 Industries will be encouraged to participate in International exhibitions
and trade fairs. Visits of trade delegations will also be supported
financially by dovetailing the schemes of Govt. of India.
5.10 Conservation of scarce resources
5.10.1 Industries will be encouraged to adopt and implement appropriate
measures for rational use of scarce resources. Thrust will be laid on
conservation of water by adopting appropriate technologies.
5.10.2 Industrial water supply schemes will be expedited. Feasibility of
desalination plants and supply of recycled and treated waste water to
industries will be explored to enable better cost recovery and project
feasibility. Government would facilitate implementation of mega water
17
18
19
5.13 Facilitation
5.13.1 Karnataka Udyog Mitra will be strengthened to provide better single
point contact services for investors. KUM will continue to provide
post-approval support to investors in order to ensure high conversion
rates.
5.13.2 Information kiosks will be set up in major district centres for easy
access of information from entrepreneurs and investors. Karnataka
Diaspora Cell will be made more effective to attract foreign investors to
the State.
5.13.3 Single Window Clearance mechanism will be made more effective so
that most of clearances / approvals are accorded at the time of approval
by SHLCC / SLSWCC / DLSWCC. Relevant provisions of Karnataka
Industries (Facilitation) Act 2002 will be used more effectively to reduce
the transaction cost and to do the business with ease. Efforts will be
made to accord all the required approvals within a specified time of 45
days.
5.13.4 Proposals of all micro, small and medium enterprises will be cleared by
the District Level Single Window Clearance Committee (DLSWCC).
Necessary amendments will be brought to the Karnataka Industries
(Facilitation) Act in this regard.
5.13.5 Investors guide / Information booklets will be made available for
information of investors. All relevant information will also made
available to the investors in website / on-line.
5.13.6 (1) Investors meets and road shows will be organized regularly at State
/ National / International level to attract large scale investment to the
State.
20
21
Creation of additional
employment
(lakh Nos.)
Generation of
additional investment
(Rs.crores)
2009-10
1.00
30,000
2010-11
3.00
90,000
2011-12
5.00
1,65,000
2012013
7.50
2,40,000
2013-14
10.00
3,00,000
22
Policy. The committee will also bring out annual reports indicating the
progress in implementation of the Policy.
$ $ $
23
Annexe - 1
Sl.
No.
Districts
Total
No.of
Taluks
Zone - 1
(Most
Backward
Taluks)
Zone - 2
(More
Backward
Taluks)
Zone - 3
(Backward
Taluk)
Zone - 4
(Industrially
Developed
Taluks)
Blore (U)
Blore (R)
Ramanagara
Chitradurga
Davanagere
Chikkaballapura
Kolar
Kanakapura
Magadi
Hosadurga
Channagiri
Harapana
halli
Bagepalli
Anekal
Blore
(North)
Blore(South)
Blore(East)
Devanahalli
D B Pur
Hoskote
Nelamangala
Ramanagaram
Channapatna
Hiriyur
Molakalmur
Hololkere
Challakere
Honnali
Chitradurga
Davangere
Jagalur
Harihar
Gudibande
Chikkaballapura
Gowribidanur Siddlaghatta
Mulbagal
Chintamani
Kolar
Bangarpet
Srinivasapura
Malur
24
Zone - 1
(Most
Backward
Taluks)
Shimoga
Zone - 2
(More
Backward
Taluks)
Soraba
Tumkur
10
10
Chamarajanagar
Chikka magalore
4
7
Kunigal
Madugiri
Gubbi Sira
Pavagada
Chamarajanagar
-
Turuvekere
Koratagere
Chikkanayakaanahalli
Gundlupet
Kollegal
Kadur
12
D Kannada
13
Hassan
14
Kodagu
Sl.
No.
11
Districts
Total
No.of
Taluks
Arakalgud
Zone - 3
(Backward
Taluk)
Zone - 4
(Industrially
Developed
Taluks)
Shimoga
Bhadravathi
Sagar
Shikaripura
Hosanagara
Thirthahalli
Tumkur
Tiptur
Yelandur
Chikka magalore
Tarikere
Shringeri
Mudigere
Koppa
N R Pura
Bantwal
Mangalore
(excl.
Corpn.limits)
Puttur
Sulya
Belthangadi
Hassan
Arasikere
C R Patna
H N Pura
Belur
Alur
Sakleshpura
Madikeri
Somwarpet
Virajpet
Mangalore
(only
Corporation
limits)
25
Sl.
No.
Districts
Total
No.of
Taluks
Zone - 1
(Most
Backward
Taluks)
-
15
Mandya
16
Mysore
17
Udupi
18
19
Bidar
20
Gulbarga
10
21
Koppal
22
Raichur
H D Kote
Bhalki
Humnabad
B Kalyana
Aurad
Sedam
Shourapur
Yadgir
Chitapur
Afzalpur
Shahapur
Aland
Chincholi
Jewargi
Kushtagi
Yelburga
Sindanorr
Manvi
Lingasugur
Devadurga
Zone - 2
(More
Backward
Taluks)
Malavalli
Nagamangala
K R Pet
Hunsur
T N Pura
Nanjangud
-
Siraguppa
H B Halli
Hadagalli
-
Koppal
Raichur
Zone - 3
(Backward
Taluk)
Zone - 4
(Industrially
Developed
Taluks)
Mandya
Maddur
Srirangapatna
Pandavapura
Periapatna
Mysore (excl.
Corpn. limits)
K R Nagara
Udupi
Kundapura
Karkala
Mysore (only
Corporation
limits )
Bellary
Hospet
Bidar
Gulbarga
Gangavathi
26
Sl.
No.
Districts
Total
No.of
Taluks
23
Bagalkote
Zone - 1
(Most
Backward
Taluks)
Bilagi
24
Belgaum
10
25
Bijapur
26
Dharwad
Muddebihal
B Bagewadi
Indi
Sindgi
-
Kalghatagi
27
Gadag
Mundargi
28
Haveri
Savanur
Shiggaon
Hirekerur
29
U Kannada
11
Supa
Bhatkal
TOTAL
176
39
Zone - 2
(More
Backward
Taluks)
Hunagund
Badami
Athani
Gokak
Soundatti
40
Zone - 3
(Backward
Taluk)
Zone - 4
(Industrially
Developed
Taluks)
Bagalkote
Mudhol
Jamkhandi
Belgaum
Khnanapur
Hukkeri
Ramdurga
Bailhongal
Chikkodi
Raibag
Bijapur
Dharawad
Hubli
Kundaggol
Navalgund
Gadag
Nargund
Ron
Shirahatti
Haveri
Ranebennur
Byadagi
Hanagal
Karwar
Haliyal
Sirsi
Mundagod
Yellapura
Honnavar
Ankola
Siddapura
Kumta
85
12
27
Annexe 2
Package of Incentives and Concessions offered for Investments
1
28
Notes :
(i)
(ii)
(iii)
The unit shall avail the sanctioned subsidy within the period of five
years.
1.1
29
:
:
:
:
100%
100%
75%
Nil
Note :(i).
: 100%
: 100%
: 75%
: Ni.
30
31
(ii)
32
Investment
range on fixed
assets
(Rs. cr.)
10 (value of
plant &
machinery)
50
51 250
251 - 1000
1001-3000
More than
3000
Zone 4 : Nil
33
10
11
District
Bagalkot
Bijapur
Koppal
Chamarajanagar
Gulbarga
Raichur
HDI*
(2001)
0.591
0.589
0.582
0.576
0.564
0.547
34
12
Interest Subsidy
Micro manufacturing enterprises:
Interest subsidy @ 5% on term loans. The interest subsidy is payable
only on the interest actually paid to financial institutions and not
defaulted in payment of principle or interest installments. The amount of
interest subsidy will be effective rate of interest (after deducting interest
subsidy) receivable by any institutions / under any Govt. of India scheme
or 5% per annum whichever is less). The period of interest subsidy is
5 years, 4 years and 3 years in Zone -1, Zone 2 and Zone 3 respectively.
13
14
Technology Upgradation,
Registration
Quality
Certification
and
Patent
(ii)
(iii)
BIS Certification:
50% of fees payable to BIS. (max. Rs.20,000) and 25% of cost
(max.Rs.50,000) for purchase of testing equipments as approved
by BIS.
35
(iv)
Patent registration :
75% of cost of fees payable to Patent Office (max. Rs.1.25 lakhs)
and 50% of cost (max. Rs.75,000) towards attorney fees, patent
search etc.
(v)
Technology Adoption :
25% of cost (max. Rs.50,000) for adopting technology from
recognized national laboratories.
(vi)
15
16
(i)
(ii)
(iii)
Energy Conservation
Small & Medium mfg. enterprises in all zones.
Practicing Energy Conservation measures resulting in reduction of
Energy Consumption of atleast 10% of earlier consumption: 10% of
capital cost (max Rs.5 lakh).
Use of non-conventional energy sources: 10% of capital cost
(max. Rs.5 lakh).
36
17
18
19
37
Annexe- 3
List of Service Enterprises eligible for package of
Incentives and Concession
R & D Centres
Packaging services
Tailoring
Flour mills
10
Printing
11
12
Weigh bridges and health care facility set up within the KIADB /
KSSIDC industrial areas
38
Annexe 4
List of Industrial Activities / Enterprises not eligible for
Incentives and Concessions
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
39
Annexe 5
Definitions and Terms &Conditions for sanction of
Incentives and Concessions
1
Definitions
a)
b)
c)
d)
Mega Project:
Projects with an investment of Rs.250 crores and above
40
e)
f)
II)
Fixed Asset: Fixed assets shall mean the total investment made on
land, building and plant and machinery and such other productive
assets like tools, jigs, and fixtures, dies, utilities like boilers,
compressors, diesel generating sets, cranes, material handling
equipments and such other equipments directly related to
production purposes.
41
c)
d)
e)
42
f)
g)
h)
i)
j)
The incentives and concessions under this policy will come into
force from 1st April 2009. With the announcement of this policy,
all other Industrial Policies announced earlier stands withdrawn.
However, industrial Enterprises which have already been
sanctioned incentives and concessions under the earlier package/
Government Order shall continue to enjoy those benefits as per
the sanction order already issued.
43
k)
44
45
m)
n)
o)
46
p)
47
Contents
1
2
3
4
5
5.1
Introduction
Vision
Mission
Strategies
Policy Measures
Streamlining of land acquisition through Inclusive
Development:
5.2 Management of industrial areas / estates
5.3 Quality Infrastructure
5.4 Development of Special Economic Zones
5.5 Skill Development
5.6 Entrepreneurship Development
5.7 Focus on MSME Sector
5.8 Boost to the Manufacturing Sector
5.9 Promotion of Exports
5.10 Conservation of scarce resources
5.11 Award for best practices
5.12 Other Policy initiatives of the State for Encouraging
Potential Sectors
5.13 Facilitation
5.14 Incentives and Concessions
5.15 Miles Stones and review of Implementation
Annexes:
1
Classification of taluks into Zones for the purpose of
administering graded scale of incentives and concessions.
2
Package of incentives and concessions offered for
investments
3
Illustrative list of service enterprises eligible for incentives
4
List of industrial activities / Enterprises not eligible for
incentives and concessions respectively.
5
Definitions, terms and conditions for sanction of
incentives
1
3
3
3
5
7
7
11
11
12
13
15
16
16
17
18
19
20
21
23
27
37
38
39