The Government of Karnataka has, through an Official Gazette dated 14th August 2020, introduced a New Industrial Policy for the period 2020-25 which focuses to build on the strengths of Karnataka’s industry and to enable it to fulfill its role as the engine of growth and to shoulder responsibility of adding more hi-tech value and employment.
• To attract investments worth INR 5 Lakh crore
• To create employment opportunities for 20 Lakh people
• To reach 3rd position in merchandise exports in the next five years
• To maintain an industrial growth rate of 10 per cent per annum
• To provide an enabling ecosystem for technology adoption and innovation
2. Focus Sectors
Based on the competitive strengths and potential for growth this Policy has identified certain focus sectors viz. Automobiles & Auto Components; Pharmaceuticals & Medical Devices; Engineering & Machine Tools; Knowledge Based Industries; Cement; Steel; Sugar; Logistics; Renewable Energy; Aerospace & Defence; lectric Vehicles; Healthcare & Wellness, Higher Education and Bio-Fuels to drive economic development and create jobs across the State particularly in rural and remote areas.
3. Special Investment Regions
The Special Investment Region (SIR) Act will be enacted to create, operate and regulate investment regions. Each SIR will be categorized as an industrial township and have an area of 100 sq. km.
4. MSMEs to get Subsidies
Micro, Small, and Medium-Sized Enterprises (MSMEs) will be given production turnover-based subsidies to encourage innovation. The subsidy will be based on 10 percent of their turnover each year for five years and will be limited to 20 – 30% of the value of their fixed assets (VFA) based on the zone. The other concessions or incentives include exemption from stamp duty and concessional registration charges, reimbursement of land conversion fee, exemption from tax on electricity tariff for MSMEs, power subsidy for Micro & Small Enterprises, support to artisans, interest subsidy on MSME technology up-gradation loans.
5. Creation of Direct Employment
The new policy encourages local hiring and as much direct employment as possible. At least 70% of the workforce should ideally comprise of locals. In the case of Group-F employees, i.e. non-technical staff, drivers, housekeeping staff, etc. 100% of the employees should be hired locally.
Source: Government of Karnataka