India News | K'taka's New Industrial Policy Sets Investment Target of Rs 5 Lakh Cr

Bengaluru, July 23 (PTI) Pitching for priority in jobs for Kannadidgas, the new industrial policy cleared by the Karnataka cabinet on Thursday aims to attract investments worth Rs 5 lakh crore and employment opportunities for 20 lakh people in five years by offering a slew of incentives and concessions.

"All new industrial projects shall create maximum possible direct employment opportunities with a minimum employment of 70 per cent to Kannadigas on an overall basis and 100 per cent in case of Group D employees," it said.

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According to the industries department, under the new industrial policy (2020-25) for the first time in India, Karnataka has adopted a production turnover based incentive system instead of tax based one to encourage production based performance.

Also, industrially backward districts will get more incentives to draw investments so as to ensure balanced industrial development of the state, it said.

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"The new industrial policy is with a vision to emerge as a global leader in advanced manufacturing, research and development, innovation, and to create an ecosystem for an inclusive, balanced and sustainable development of the state," Industries Minister Jagadish Shettar said.

Speaking to reporters after the cabinet meeting here, he said, "We want to be in the third position in merchandise exports from the current fourth, want to maintain the industrial growth rate of 10 per cent per annum, and provide an enabling ecosystem for technology adoption and innovation."

On production turnover based incentive systems, Shettar said for the first time in the country this is being done and it will encourage investment.

Investment promotion subsidy, based on turnover in the form of grant for medium, large and mega enterprises ranges from 1.75 to 2.50 per cent on turnover in each year for a period of 5 to 10 years and limited to 35-60 per cent of VFA (Value of fixed asset).

For Micro and Small Enterprises it will be 10 per cent on turnover in each year for a period of 5 years and limited to 20-30 percent of VFA.

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.

Also, incentives for export oriented units, investment subsidy for anchor industries (minimum investment Rs 100 crores) in taluks lacking any major industries, incentives and concessions for development of private industrial parks, and support to research & development and Industry 4.0.

Noting that industries are now concentrated mostly in and around Bengaluru, Shettar said the new policy also envisages to take industries to tier two and tier three cities.

The policy has grouped districts of the state into three zones with a view to incentivise investments in industrially backward districts, classified as zone 1 and 2, while Bengaluru urban and rural districts are classified in zone 3, he said.

"There will be subcommittee headed by CM to decide on subsidy and concessions," he added.

Based on competitive strengths and potential for growth, the policy has identified certain focus sectors that include automobiles and auto components, pharmaceutical and medical devices.

Industry 4.0, Research and Development, Intellectual Property Rights (IPR), Technology Adoption and Innovation, Cluster Development Initiatives and Sustainable Industrialization, have been identified as thrust areas under the policy.

Among other things, the policy also encourages establishment of private industrial parks like integrated industrial parks, sector specific parks, logistics parks and flatted factories by private developers.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)