Industrial Policy Final 2014 19

8/9/2019 Industrial Policy Final 2014 19

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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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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,


http://www.gokenergy.gov.in/govt_on.htm

l

.Solar policy, 2011- 16 Department of Energy,


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,


http://kumappsonline.com/newsletter/imag

es/jan2013/downloads/semiconductor%20

brochure.pdf

.

Information and

Communication

technology policy 2011




http://www.bangaloreitbt.in/docs/2012/09/

Informanton&CommunicationsTechnology

Policy.pdf

.

Millennium biotech policy Department of IT /BT and




Biotech_Policy_II.pdf

.

Karnataka animation,

visual effects, gaming

and comics policy 2012





KAVG%20Policy.pdf

0.

I4 ( IT, ITES, Innovation,

Incentives ) policy

Department of Information

Technology, Biotechnology

and Science & Technology,


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,


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

Industrial Policy Final 2014 19

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Transcript of Industrial Policy Final 2014 19