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Karnataka Industrial Policy 2014-19

(Final Draft)

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Industrial Policy 2014-19 –Final Draft 2



Contents

1. 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 Growth 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



Introduction

India – Economic outlook

The Planning Commission has set an average GDP growth target of 8% for the 12th Plan. The sector-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:



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 across

India.

• India’s 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 firms. 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.



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.

Karnataka’s 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 crore in 2012-13 (constant price) against India’s 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. Karnataka’s 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

9.712.2

9.7

4.4

9.2 9.2

3.52.1

-5

0

5

10

15

20

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Karnataka India



SN Policy Department Source/Link

1. Karnataka Tourism policy

, 2009- 14

Department of Tourism,

Government of Karnataka

http://karnatakatourism.org/policy/tourism

policyeng.pdf

2. Renewable energy policy-

2009-14

Department of Energy,


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

l

3. Solar policy, 2011- 16 Department of Energy,


http://www.gokenergy.gov.in/documents/S

olar%20Policy%20English.pdf

4.

Karnataka State policy

for special economic

zones 2009

Department of Industries and

Commerce, Government of

Karnataka

http://karnatakaindustry.gov.in/documents

/StatePolicyforSpecialEconomicZones2009

withAmendments.pdf

5.

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

6.

Semiconductor policy

2010

Department of IT /BT and

Science & Technology,


http://kumappsonline.com/newsletter/imag

es/jan2013/downloads/semiconductor%20

brochure.pdf

7.

Information and

Communication

technology policy 2011




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

Informanton&CommunicationsTechnology

Policy.pdf

8.

Millennium biotech policy Department of IT /BT and




Biotech_Policy_II.pdf

9.

Karnataka animation,

visual effects, gaming

and comics policy 2012





KAVG%20Policy.pdf

10.

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://karnatakatourism.org/policy/tourismpolicyeng.pdf

http://karnatakatourism.org/policy/tourismpolicyeng.pdf

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

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

http://www.gokenergy.gov.in/documents/Solar Policy English.pdf

http://www.gokenergy.gov.in/documents/Solar Policy English.pdf

http://karnatakaindustry.gov.in/documents/StatePolicyforSpecialEconomicZones2009withAmendments.pdf



http://www.karnatakaindustry.gov.in/Old-document/AerospacePolicy _CII_ 1_6.pdf



http://kumappsonline.com/newsletter/images/jan2013/downloads/semiconductor brochure.pdf



http://www.bangaloreitbt.in/docs/2012/09/Informanton&CommunicationsTechnologyPolicy.pdf



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

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

http://www.bangaloreitbt.in/docs/2012/09/KAVG Policy.pdf

http://www.bangaloreitbt.in/docs/2012/09/KAVG Policy.pdf

http://www.bangaloreite.biz/IT_2013/pdf/Karnataka-i4-Policy.pdf

http://www.bangaloreite.biz/IT_2013/pdf/Karnataka-i4-Policy.pdf


SN Policy Department Source/Link

11. Integrated Agri- business

development policy 2011

Department of Agriculture,


http://www.karnataka.gov.in/Documents/I

ntegrated-AgriBusiness2-RN-8pm.pdf

12.

Karnataka

Pharmaceutical policy

2012

Health and Family Welfare

Department, Government of

Karnataka

http://www.advantagekarnataka.com/ima

ges/sector-

profiles/Biotechnology&Pharmaceutical.pd

f

13.

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 for

acquisition 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.karnataka.gov.in/Documents/Integrated-AgriBusiness2-RN-8pm.pdf

http://www.karnataka.gov.in/Documents/Integrated-AgriBusiness2-RN-8pm.pdf

http://www.advantagekarnataka.com/images/sector-profiles/Biotechnology&Pharmaceutical.pdf




http://www.karnatakaindustry.gov.in/documents/SUVARNA VASTRA NEETHI-2008-13.pdf




• 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 spread

industrialization 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.



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 MSME’s 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



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 India’s (GoI’s) 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



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:



Permission to purchase lands from land owners for development of private industrial Estates / Parks

subject compliance with land use pattern in the approved Master Plan.

To utilize proponent’s 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 use’ basis.

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



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.



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.



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(ATI’s),

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.



b) Focus on trainers training programme

A trainer’s 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 ATI’s 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.



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



and facilitate participation of women 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



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.



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.



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.

Investors’ meets 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.



• 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 Karnataka” brand 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.



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 district

level 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 for quality certifications would be eligible for one time subsidy through reimbursement of



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.



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 environmentally 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 Scheme” for 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



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



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, Chennai–Bangalore–Chitradurga Industrial

Corridor and Bangalore–Mumbai 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



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 size 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



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 in

setting 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



viii. Pharmaceutical companies, which take steps for reducing waste generation at source or

recycling of wastes will be supported by providing subsidy upto 50% of the cost subject to a

maximum of INR50 lakhs

ix. Purchase of refrigerated vans by industry for captive use will be considered as part of capital

investment of the unit

x. Appointment of more Quality Enforcement Officers and Drug Testing Laboratories with

adequate state of the art testing equipment

5.7.4. Steel Sector

Iron and steel manufacturing has attracted huge investments over the last decade with estimated

employment generation of more than 8, 00,000 direct and indirect. The sector has also been critical in

providing backward linkages to a large number of manufacturing industries. Lately the steel sector in

the State has been facing considerable challenges due to bottlenecks in land acquisition, hurdles in

iron ore mining and transportation costs, which have led to declining investments in the Steel sector.

Efforts will be made to remove hurdles in mining of iron ore specifically for captive consumption to

produce Steel is going to be a priority for the State.

Specific clusters for steel along the iron ore producing areas such as Bellary-Hospet, Tumkur,

Chitradurga, Chikmagalur and along industrial corridors with necessary high speed connectivity will

be created.

It will be made mandatory for the steel and cement industries to develop specific skilling centres to

upgrade existing skill sets and boost productivity per employee. This should be done in conjunction

with NSDC sector skill councils.

Mineral assets will be proposed to be allocated first to existing value addition industry. And, in order

to make the industry accountable for development of mineral assets, it will be allocated only after

completion of 100% of ordering and completion of 50% of the project activity.

As India is still importing value added steel like Cold rolled steel, Galvanised steel, electric steel, Tin

Plates, etc. Existing industry or new industry intends to invest for production of value added steel

products and which becomes substitute for imports, such investments will be considered for special

package of incentives and concessions(details as in Annexure -2).

Setup the Research Centre to undertake research on better mining practices and promote use of latest technology in mining.

5.7.5. Cement Sector

The spurt in infrastructure projects such as the dedicated freight corridors, upgradation and creation

of new airports and ports have increased the demand for cement. The growth of the housing sector

and road construction projects has also provided significant opportunities. The demand for cement is



likely to be sensitive to the growth in these sectors and will also impact policy initiatives. To help the

cement industry grow further, the state will take initiatives to resolve issues relating to Logistics

(Railways, Roads, Inland Waterways, Port connectivity); Raw Materials; Fuel (Coal, Pet coke,

Alternative fuels); Fly Ash and Land Acquisition.

Efforts will be made to remove hurdles in mining specifically for captive consumption to produce

Cement (Value Addition).

Specific clusters for Cement manufacturing will be created around Gulbarga, Bagalkot, Chitradurga,

and Belgaum district.

5.7.6. Agro, Food Processing and Sugar Sector

Karnataka has rich biodiversity and ten agro-climatic zones suited for majority of the agricultural &

horticultural crops and a long coastline that encourages fisheries. The state contributes around 7% of

the agricultural production and 15% of the horticultural production in the country.

Karnataka has abundant availability of raw material to consistently tap into the growing demand for

processed foods both from domestic and export standpoint. However, the State faces severe

constraint in terms of limited processing facilities and inadequate quality control and testing methods

as per international standards. Given the high potential for employment generation in the sector and

the anticipated output, it is imperative to provide an enabling environment for the sector.

With a vision “To position Karnataka in a sustained growth path in the field of agricultural and allied

sectors through global technologies and innovative tools, by creating enabling frameworks and state

of art infrastructure facilities, thereby generating higher returns to farming communities”, GoK

launched Integrated Agri Business Policy in 2011.Going forward agriculture department also plans to

introduce Agri& Food processing policy to promote the sector in the state.

The State will focus on mapping the skill gaps and identifying priority areas for human resource

development for increasing the productivity of workers/units in the sector. The State will also seek to

inspire innovation and technology development to boost this sector. Requests for technology &

quality upgradation subsidy by agro and food processing industries will be given priority over others.

Regulatory and statutory approvals for setting up of food parks in the state will be expedited and

prioritised. Mega food parks will be set up in Gulbarga, Tumkur, Chikmanglur, Hassan, Mysore and

Mandya as recommended by the MTF.

Implementation of the projects and schemes under National Mission for Food Processing (NMFP) will

be expedited.



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 India‘s 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.



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 reservation and

facilitation in key government programmes and initiatives

State to introduce Entrepreneurship Development Programmes exclusively for prospective first

generation women entrepreneurs where interest free start up loan with flexible payback schemes and

continuous guidance will be provided upon successful completion of State Entrepreneurship

Development courses.

State will provide reservation for such entrepreneurs including priority for allotment of land in

KIADB/KSSIDC Industrial area and proposed NIMZs for setting up of industrial units.

Special package of incentives over and above what is offered has standard package will be provided

to SC/ ST/ Women/Minority/PH and Ex-Servicemen entrepreneurs as given in Annexure -2.

State will provide additional export and market development assistance upto INR 2 Lakhs to

entrepreneurs availing incentives under Government of India programme for Trade Related

Entrepreneurship Assistance and Development Scheme for Women (TREAD) and marketing

assistance.

State will provide space reservation in government funded incubation centres and skill development

centres for first time SC/ ST/ PH, Ex-Servicemen/ Women MSME entrepreneurs.

5.9. Support for promotion of Khadi, Artisan and Coir sector

The government will make all efforts to encourage growth and development of the Khadi, Artisan and

Coir sector through institutional support.

State will focus on optimal utilisation of benefits out of centrally sponsored schemes such as Prime

Minister’s Employment Generation Programme, Rural Industry Service Centre, Export Incentive

Scheme, Interest Subsidy Scheme, etc. for the Khadi, Artisan and Coir sector.

It is proposed to create a separate cell for Khadi, Artisan and Coir sector to coordinate for benefit

realization under Central and State Schemes

To promote the coir industry the state will

• Provide continuous power by implementing NirantharaJyothiYojana

• Power subsidy at INR2/- per unit



• A scheme for providing funding for difference of wages between Minimum Wages and the

wages earned per day will be introduced on similar lines to Khadi worker

• Additional 3% interest subsidy on term and working capital loan for coir industry over and

above what is already prescribed in the policy and applicable to the rest of the units.

5.10. Special Thrust for encouraging Industrial Development in Hyderabad- Karnataka Area : Leverage on the Article 371 status for Hyderabad Karnataka Area to create a strong industrial base there. The State Government will petition the Central Government to offer tax incentives like Excise Duty Exemption, Income Tax Exemption to boost manufacturing.

All Talukas of Hyderabad Karnataka Area are exclusively covered under Zone I of the policy to provide the required boost to industry.

Mega, Ultra mega & Super Mega projects coming up in Hyderabad Karnataka region will provided with special incentives of land and concessional rates upto 20% of the land price based on the merits and advantages of such projects for the state.

5.11. Attractive Standard and Special package of incentives and concessions

The details of standard package of incentives and concessions offered for establishment of Industry

under MSME, Large, Mega, Ultra Mega, Super Mega category of enterprises along with special

package incentives and concessions for Mega, Ultra Mega and Super Mega category are indicated in

the Annexure – 2.

5.12. Smooth exit, revival and relocation policy

The sick unit revival policy for small, medium and large scale units which was issued during 2002 is

still in force with few modifications. In view of changes in the unit’s classifications, financing

procedures, changes in policies, it needs to be replaced with comprehensive policy.

Efforts will be made to adopt exit mechanism for non-viable businesses which has lead to locking of funds and capital assets, while giving full protection to the interest of employees.

Further, in view of rapid growth of cities like Bangalore, Mysore, Dharwad, Belgaum, etc. are facing

shortage of infrastructural facilities along with traffic congestion. Therefore there is an urgent need

for introduction of relocation policy for labour intensive industries.

In view of facts explained above, it is proposed to bring in a comprehensive policy for smooth exit,

revival and relocation of industries.



6. Milestones / Review / Monitoring

In order to achieve the targets spelt out in the policy within the stipulated time frame, following milestones are set for ensuring periodical progress:

Estimation of Land, Water & Power requirement for above Targets under Industrial Policy 2014-19

Sector No. of

units

Investment

INR in Crores

Employment Land

requirement in

Acres

Power in MW Water in

Million liter

per day

Remarks

Micro 15oooo 25000 600000 5000 100 15 Around 40,000 units will be

requiring either sheds or small plots

from govtand the rest will be will be

either in rented premises and own

Small 15000 50000 250000 2500 300 10 Around 5000 units will be requiring

either sheds or plots from govtand

the rest will manage themselves

with rented building or their own

lands.

Medium 3000 50000 175000 3000 300 15 Around1500 units will be requiring

land from govt,and the rest will

manage on their own land or leased

property.



Large 1500 75000 150000 5000 150 30 Land will be acquired as suc/ or

under section 109

Mega 300 100000 125000 3000 400 20 Land will be acquired as suc/ or

under section 109

Ultra Mega 150 100000 125000 7500 750 50 Land will be acquired as suc/ or

under section 109

Super Mega 75 100000 75000 14000 1000 100 Land will be acquired as suc/ or

under section 109

TOTAL 170025 500000 1500000 40000 3000 240

A high level Inter Departmental Review Committee will be constituted to regularly monitor implementation of all provisions of the policy. This committee will

also ensure issue of necessary Govt. orders by various departments in relation to the policy without loss of any time for mid-course corrections, if required for

smooth implementation of the Policy. The committee will also bring out annual reports indicating the progress in implementation of the Policy.



7. Budgetary provision

The requirement of funds for implementation of various components of the policy during the policy period yearwiseshall be as follows:

SN Schemes

2014-15 2015-16 2016-17 2017-18 2018-19 Total

No. of

units

Amount

No. of

units

Amount No. of

units

Amount No. of

units

Amount No. of

units

Amount No. of

units

Amount

Provision for Infrastructure Development

1 Sector specific industrial zones 4 50.00 ---- 50.00 ---- 50.00 ---- 50.00 ---- 50.00 4 250

2 Knowledge City Corridor between Mysore

and Mangalore

1 10.00 ---- 10.00 ---- 10.00 ---- 10.00 ---- 10.00 1 50

3 Industrial Townships 1 0.25 1 0.25 1 0.25 1 0.25 1 0.25 5 1.25

4 Upgradation of Industrial Areas / Estates 30 100.00 30 100.00 30 100.00 30 100.00 30 100.00 150 500

5 Supply of Tertiary treated water ---- 100.00 ---- 100.00 ---- 100.00 ---- 100.00 ---- 100.00 0 500

6 Private Industrial Estates / Areas 10 50.00 10 50.00 10 50.00 10 50.00 10 50.00 50 250

7 Greening of Industrial Area / Estates 15.00 15.00 15.00 15.00 15.00 0 75

8 Subsidised plots to MSMEs 3000 60.00 3000 60.00 3000 60.00 3000 60.00 3000 60.00 15000 300



9 Development of New / Existing Clusters 20.00 20.00 20.00 20.00 20.00 0 100

10 R&D centers 2 5.00 2 5.00 2 5.00 2 5.00 2 5.00 10 25

11 Provision for Human Resource Development

a) Trainers Training programme 100 0.25 100 0.25 100 0.25 100 0.25 100 0.25 500 1.25

b) Revival of ATIs 3 0.25 3 0.25 3 0.25 3 0.25 3 0.25 15 1.25

c) On job training 10000 25.00 10000 25.00 10000 25.00 10000 25.00 10000 25.00 50000 125

d) Adoption of Information and

Communication technology

0.20 0.20 0.20 0.20 0.20 0 1

e) Auditing of Training Institutes 0.25 0.25 0.25 0.25 0.25 0 1.25

f) Labour market information system 0.50 0.50 0.50 0.50 0.50 0 2.5

g) Institutional Support and

Infrastructure Development

20.00 20.00 20.00 20.00 20.00 0 100

h) Skill Development for Social groups 1.00 1.00 1.00 1.00 1.00 0 5

i) Entrepreneurship Development 3000 1.00 3000 1.00 3000 1.00 3000 1.00 3000 1.00 15000 5

j) Enterpreneurship Development fund --- 50.00 --- 50.00 --- 50.00 --- 50.00 --- 50.00 0 250



k) Enterpreneurship Incubation Centres 1.00 1.00 1.00 1.00 1.00 0 5

l) Enterpreneurship awards 0.20 0.20 0.20 0.20 0.20 0 1

Standard Package of incentives and concession to MSMEs , Large , Mega , Ultra Mega and Super Mega Enterprises

12 Investment Promotion Subsidy for MSME 1000 100.00 1100 110.00 900 90.00 950 95.00 850 85 4800 480

13 Refund of Land Conversion Fine 100 1.00 115 1.15 90 0.90 95 0.95 90 0.90 490 4.9

14 Refund of Certification Chares to MSME 30 0.30 35 0.35 35 0.35 30 0.30 25 0.25 155 1.55

15 ETP subsidy for MSME,Large, Mega,

Ultra Mega & Super Mega

50 50.00 50 50.00 50 50.00 50 50.00 50 50.00 250 250

16 Interest Free Loan on VAT for Large,

Mega, Ultra Mega & Super Mega

30 100 35 150 40 150 50 200 55 200 210 800

17 VAT Grant for MSME’s 50 30 65 40 70 40 80 45 85 50 350 205

18 Anchor unit subsidy 10 10 8 12 10 15 10 15 10 15 48 67

19 Interest Subsidy for Micro and Small

Enterprises

100 1.00 125 1.25 125 1.25 150 1.50 150 1.50 650 6.5

20 Power Tariff Subsidy to Micro Industries 1000 2.00 1000 2.00 1000 2.00 1000 2.00 1000 2.00 5000 10



21 Technology Upgradation , Quality

Certification and Patent Registration for

Micro and Small Enterprises

50 0.30 60 0.40 50 0.50 50 0.50 65 0.65 275 2.35

22 Water harvesting/ Conversation Measures

for Small and Medium

10 0.10 15 0.15 20 0.25 20 0.25 25 0.30 90 1.05

23 Energy Conservation for Small and

Medium Enterprises

10 0.08 15 0.10 17 0.15 18 0.16 20 0.20 80 0.69

24 Addl. Incentives to the enterprises

following Reservation policy of the State

5 0.50 7 0.70 10 1.00 12 1.20 15 1.50 49 4.9

25 Special Package of Incentives to Large,

Mega ,Ultra Mega etc.,

50 10.00 100 25.00 150 50.00 200 75.00 250 100.00 750 260

Total 18646 815.18 18876 903 18713 911.3 18861

996.7

6 18836 1017.2 93932 4643.44

Note: The above provisions are made only wherever the funds are not available from the GOI Schemes.



8. Expected benefits to the State

In addition to employment creation for 15 lakh people, the State will also have the following benefits:

• Per Capita income will go up and leads to additional tax generation

• Leads to scope for development of Educational Institutions, Transportation, Hotels,Tourism,

etc.

• Expected to generate additional direct sales tax revenue approximately INR500 crores every

year and by the end of the policy period the additional sales tax revenue to the State

exchequer would be around INR2500 crores.

9. Implementation mechanism

In order to implement the policy more effectively and meaningfully there is a need to reorganize the

department by way of strengthening the gross root level offices particularly at Taluk and District

levels. To this effect, the department will initiate action to submit the proposals to Government for

approval with proper justifications.



10. Annexure 1 – Classification of Taluks

Classification of Taluks in Karnataka into Zones for the purpose of administering Incentives & Concessions

Sl. No. Districts Total No.ofTaluks

Hyderabad Karnataka region (Zone 1) Special Zone

Most Backward Zone

(Zone – 2)

More Backward Zone

(Zone – 3)

Backward Zone

(Zone – 4)

Industrially Developed Zone

(Zone – 5)

South Karnataka Region

1 B’lore (U)

4

--- --- --- Other than notified Industrial Areas in AnekalTq.

Notified Industrial Areas in AnekalTq.

--- --- --- --- B’lore (North)

--- --- --- --- B’lore(South)

--- --- --- --- B’lore(East)

2 B’lore (R) 4

--- --- --- Other than notified Industrial Areas in DevanahalliTq.

Notified Industrial Areas in

DevanahalliTq.

--- --- --- Other than notified Industrial Areas in DoddaballapuraTq.


DoddaballapuraTq.

--- --- --- Other than notified Industrial Areas in HoskoteTq.


HoskoteTq.

--- --- --- --- Nelamangala

3 Ramanagara 4

--- Kanakapura --- Other than notified Industrial Areas in RamanagaraTq.


RamanagaraTq.

--- Magadi --- Other than notified Industrial Areas in ChannapatnaTq.


ChannapatnaTq.

4 Chitradurga 6 --- Hosadurga Hiriyur Chitradurga ---



--- --- Molakalmur --- ---

--- --- Hololkere --- ---

--- --- Challakere --- ---

5 Davanagere 6 --- Channagiri Honnali Davangere ---

--- Harapanahalli Jagalur Harihar ---

6 Chikkaballapura 6

--- Bagepalli Gudibande Chikka- ballapura ---

--- --- Gowribidanur Siddlaghatta ---

--- --- --- Chintamani ---

7 Kolar 5

--- --- Mulbagal Kolar ---

--- --- --- Bangarpet ---

--- --- --- Srinivasapura ---

--- --- --- Malur ---

8 Shimoga 7

--- --- Soraba Shimoga

--- --- --- Bhadravathi ---

--- --- --- Sagar ---

--- --- --- Shikaripura ---

--- --- --- Hosanagara ---

--- --- --- Thirthahalli ---

9 Tumkur 10

--- Kunigal Turuvekere Tumkur ---

--- Madhugiri Koratagere Tiptur ---

--- Gubbi, Chikkanaya-kanahalli --- ---

--- Sira --- --- ---

--- Pavagada --- --- ---

10 Chamaraja-nagar 4 --- Chamaraja-nagar Gundlupet Yelandur ---

--- Kollegal ---

11 Chicka - magalore 7 --- --- Kadur Chikka - magalore



--- --- --- Tarikere

--- --- --- Shringeri

--- --- --- Mudigere

--- --- --- Koppa

--- --- --- N R Pura

12 D Kannada 5

--- --- --- Mangalore

(excl. Corpn.limits) Mangalore (only Corporation limits)

--- --- --- Bantwal

--- --- --- Puttur

--- --- --- Sulya

--- --- --- Belthangadi

13 Hassan 8

--- --- Arakalgud Hassan

--- --- --- Arasikere

--- --- --- C R Patna

--- --- --- H N Pura

--- --- --- Belur

--- --- --- Alur

--- --- --- Sakleshpura

14

Kodagu

3

--- --- --- Madikeri

--- --- --- Somwarpet

--- --- --- Virajpet

15

Mandya

7

--- --- Malavalli Mandya

--- --- Nagamangala Maddur

--- --- K R Pet Srirangapatna

--- --- --- Pandavapura

16 Mysore 7 --- H D Kote Hunsur Mysore (excl. Mysore (only Corporation



Corpn. limits) limits )

--- --- T N Pura Periapatna

---

--- --- Nanjangud K R Nagara ---

17

Udupi

3

--- --- --- Udupi ---

--- --- --- Kundapura ---

--- --- --- Karkala ---

North Karnataka Region

18 Bellary 7

Bellary --- --- --- ---

Hospet --- --- --- ---

Siraguppa --- --- --- ---

H B Halli --- --- --- ---

Hadagalli --- --- --- ---

Sandur --- --- --- ---

Kudligi --- --- --- ---

19

Bidar

5

Bidar --- --- --- ---

Bhalki --- --- --- ---

Humnabad --- --- --- ---

B Kalyana --- --- --- ---

Aurad --- --- --- ---

20

Gulbarga

7

Gulbarga --- --- --- ---

Sedam --- --- --- ---

Chitapur --- --- --- ---

Afzalpur --- --- --- ---

Aland --- --- --- ---

Chincholi --- --- --- ---



Jewargi --- --- --- ---

21 Yadgir 3

Yadgir --- --- --- ---

Shahapur --- --- --- ---

Shourapur --- --- --- ---

22 Koppal 4

Koppal --- --- --- ---

Gangavathi --- --- --- ---

Kushtagi --- --- --- ---

Yelburga --- --- --- ---

23 Raichur 5

Raichur --- --- --- ---

Sindanorr --- --- --- ---

Manvi --- --- --- ---

Lingasugur --- --- --- ---

Devadurga --- --- --- ---

24 Bagalkote

6

--- Bilagi Hunagund Bagalkote ---

--- --- Badami Mudhol ---

--- --- --- Jamkhandi ---

25

Belgaum

10

--- --- Athani Belgaum ---

--- --- Gokak Khanapur ---

--- --- Soundatti Hukkeri ---

--- --- --- Ramdurga ---

--- --- --- Bailhongal ---

--- --- --- Chikkodi ---

--- --- --- Raibag ---

26

Bijapur

5

--- --- --- Bijapur ---

--- Muddebihal --- --- ---

--- B Bagewadi --- --- ---



--- Indi --- --- ---

--- Sindgi --- --- ---

27

Dharwad

5

--- --- Kalghatagi Dharawad ---

--- --- --- Hubli ---

--- --- --- Kundagol ---

--- --- --- Navalgund ---

28

Gadag

5

--- --- Mundargi Gadag ---

--- --- --- Nargund ---

--- --- --- Ron ---

--- --- --- Shirahatti ---

29

Haveri

7

--- --- Savanur Haveri ---

--- --- Shiggaon Ranebennur ---

--- --- Hirekerur Byadagi ---

--- --- --- Hanagal ---

30

U Kannada

11

--- --- Supa Karwar ---

--- --- Bhatkal Haliyal ---

--- --- --- Sirsi ---

--- --- --- Mundagod ---

--- --- --- Yellapura ---

--- --- --- Honnavar ---

--- --- --- Ankola ---

--- --- --- Siddapura ---

--- --- --- Kumta ---

TOTAL 176 31 18 35 88 4

Note:Notified Industrial Areas means final notification issued by the Govt. for acquisitions of land as on effective date of this policy.



11. Annexure 2

11.1. Attractive Standard & Special Package of Incentives and

Concessions

11.1.1. Investment Promotion Subsidy

a) Micro Manufacturing Enterprises

Zone – 1(Special Zone): 30% Value of Fixed Assets (VFA) (max. INR17.5 lakh)

Zone – 2: 25% Value of Fixed Assets (VFA) (max.INR 15 lakh)

Zone – 3: 20% Value of Fixed Assets (VFA) (max.INR12.5 lakh)

Zone – 4: 15% Value of Fixed Assets (VFA) (max.INR 10 lakh)

Zone – 5: Nil

b) Small Manufacturing Enterprises

Zone – 1(Special Zone) a) For investment in Fixed Assets upto 150.00 lakh - 25% VFA (max. INR 37.50 lakh) b) For investment in Fixed Assets between 151.00-250.00 lakh - 25% VFA (max. INR 62.50 lakh c) For investment in Fixed Assets between 251.00 -500.00 lakh - 25% VFA (max. INR 85.00 lakh) d) For investment in Fixed Assets above 500.00 lakh - 25% VFA (max. INR 100.00 lakh) Zone – 2: a) For investment in Fixed Assets upto 150.00 lakh - 20% VFA (max. INR 30.00 lakh) b) For investment in Fixed Assets between 151.00-250.00 lakh - 20% VFA (max. INR 50.00 lakh) c) For investment in Fixed Assets between 251.00 -500.00 lakh - 25% VFA (max. INR 65.00 lakh) d) For investment in Fixed Assets above 500.00 lakh - 25% VFA (max. INR 80.00 lakh) Zone – 3: a) For investment in Fixed Assets upto 150.00 lakh - 15% VFA (max. INR 22.50 lakh) b) For investment in Fixed Assets between 151.00-250.00 lakhs - 15% VFA (max. INR 37.50 lakhs) c) For investment in Fixed Assets between 251.00 -500.00 lakh - 25% VFA (max. INR 50.00 lakh) d) For investment in Fixed Assets above 500.00 lakh - 25% VFA (max. INR 65.00 lakh) Zone – 4: a) For investment in Fixed Assets upto 150.00 lakhs - 10% VFA (max. INR 15.00 lakhs) b) For investment in Fixed Assets between 151.00-250.00 lakhs - 10% VFA (max. INR 25.00 lakhs) c) For investment in Fixed Assets between 251.00 -500.00 lakh - 25% VFA (max. INR 40.00 lakh) d) For investment in Fixed Assets above 500.00 lakh - 25% VFA (max. INR 50.00 lakh) Zone – 5: Nil



c) Medium Manufacturing Enterprises (those who employs minimum 25 workers)

Zone – 1(Special Zone): INR 1.25 Crore

Zone – 2: INR 1.00 Crore

Zone – 3: INR 75 lakhs

Zone – 4: Nil

Zone – 5: Nil

d) Additional subsidy to Women, Minority , Physical challenged and Ex-Servicemen Entrepreneurs as under: Additional subsidy of 5% subject to maximum of INR 2.00 lakhs, 5.00 lakhs and INR 7.5 lakhs for Micro, Small and Medium manufacturing enterprises respectively. Note:

(i) Subsidy sanctioned amount will be released in 2 to 4 instalments depending upon the funds allotted by the Govt.

(ii) This incentive is available to enterprises availing term loan for acquisition of Fixed Assets, where the term loan amount shall not be less than 50% of approved assets by the Financial Institutions.

(iii) The Enterprise shall apply for sanction of subsidy within one year of the commercial production

(iv) The unit shall avail the sanctioned subsidy within the period of five years.

11.1.2. Investment Promotion Subsidy for SC / ST entrepreneurs.

a) Micro Manufacturing Enterprises

Zone – 1(Special Zone): 40% Value of Fixed Assets (VFA) (max. INR 25 lakhs)

Zone – 2: 30% Value of Fixed Assets (VFA) (max.INR 20 lakhs)

Zone – 3: 25% Value of Fixed Assets (VFA) (max. INR17.5 lakhs)



b) Small Manufacturing Enterprises Zone – 1(Special Zone): a) For investment in Fixed Assets upto 150.00 lakh - 30% VFA (max. INR 45.00 lakh) b) For investment in Fixed Assets between 151.00-250.00 lakh - 30% VFA (max. INR 70.00.00 lakh c) For investment in Fixed Assets between 251.00 -500.00 lakh - 30% VFA (max. INR 95.00 lakh) d) For investment in Fixed Assets above 500.00 lakh - 30% VFA (max. INR 110.00 lakh)

Zone – 2: a) For investment in Fixed Assets upto 150.00 lakh - 25% VFA (max. INR 37.50 lakh) b) For investment in Fixed Assets between 151.00-250.00 lakh - 25% VFA (max. INR 60.00 lakh) c) For investment in Fixed Assets between 251.00 -500.00 lakh - 25% VFA (max. INR 75.00 lakh) d) For investment in Fixed Assets above 500.00 lakh - 25% VFA (max. INR 90.00 lakh)

Zone – 3: a) For investment in Fixed Assets upto 150.00 lakh - 20% VFA (max. INR 30.00 lakh) b) For investment in Fixed Assets between 151.00-250.00 lakhs -



20% VFA (max. INR 45.00 lakhs) c) For investment in Fixed Assets between 251.00 -500.00 lakh - 20% VFA (max. INR 60.00 lakh) d) For investment in Fixed Assets above 500.00 lakh - 20% VFA (max. INR 75.00 lakh)

Zone – 4: a) For investment in Fixed Assets upto 150.00 lakhs - 15% VFA (max. INR 22.50 lakhs) b) For investment in Fixed Assets between 151.00-250.00 lakhs - 15% VFA (max. INR 35.00 lakhs) c) For investment in Fixed Assets between 251.00 -500.00 lakh - 15% VFA (max. INR 50.00 lakh) d) For investment in Fixed Assets above 500.00 lakh - 15% VFA (max. INR 60.00 lakh) Zone – 5: 10% Value of Fixed Assets (VFA) (max.INR 15 lakhs)

Medium Manufacturing Enterprises (those who employs minimum 25 workers)

Zone – 1(Special Zone): INR 1.5 Crore



Zone – 4 :INR 75.00 Lakhs

Zone – 5 :INR 50.00 Lakhs

Notes:

(v) Subsidy sanctioned amount will be released in 2 to 4 instalments depending upon the funds allotted

by the Govt.

(vi) This incentive is available to enterprises availing term loan only, where the term loan amount shall

not be less than 50% of approved fixed assets only.

(vii) The Enterprise shall apply for sanction of subsidy within one year of the commercial production

(viii) The unit shall avail the sanctioned subsidy within the period of five years.

11.1.3. Exemption from Stamp Duty

MSME, Large, Mega, Ultra Mega, Super Mega Enterprises

Stamp duty to be paid in respect of (i) loan agreements, credit deeds, mortgage and hypothecation deeds

executed for availing loans from State Govt. including VAT loan from Department and / or State Financial

Corporation, Industrial Investment Development Corporation, National Level Financial Institutions, Commercial

Banks, RRBs, Co-operative Banks, KVIB / KVIC, Karnataka State SC/ST Development Corporation, Karnataka

State Minority Development Corporation and other institutions which may be notified by the Government from

time to time for the initial period of five years only and (ii) for lease deeds, lease-cum-sale and absolute sale

deeds executed by industrial Enterprises in respect of industrial plots, sheds, industrial tenements, by KIADB,

KSSIDC, KEONICS, KSIIDC, Industrial Co-operatives and approved private industrial estates (iii) for lease deeds,



lease cum sale and absolute sale deed executed by developer in respect of lands purchased for development of

private industrial estates / park shall be exempted as below:

Zone – 1(Special Zone): 100%

Zone – 2: 100%

Zone – 3: 100%

Zone – 4: 75% for general category and 100% for SC/ST entrepreneurs

Zone – 5: Nil for general category and 75% for SC/ST entrepreneurs in the notified industrial areas only.

11.1.4. Concessional Registration Charges


For all loan documents and sale deeds as specified in 2 above, the registration charges shall be at a concessional

rate of Re.1 per INR 1000.

Note:

(i) The exemption of stamp duty and concessional registration charges are also applicable to lands

purchased under Section 109 of the KLR Act nd also for direct purchase of industrially converted lands

for the projects approved by SHLCC / SLSWCC / DLSWCC. This incentive will also be applicable for the

land transferred by KIADB to land owners as compensation for the acquired land.

(ii) The exemption of stamp duty and concessional registration charges are also available for registration

of final sale deed in respect of lands, sheds, plots, industrial tenements after the expiry of lease period

at the rate as specified in the Industrial Policy which was in vogue at the time of execution of lease-

cum-sale deed.

11.1.5. Refund of Land Conversion Fine


The payment of land conversion fee for converting the land from agriculture use to industrial use including for

development of industrial areas by private investors will be refunded as detailed below:

Zone – 1(Special Zone): 100%

Zone – 2: 100%

Zone – 3: 100%

Zone – 4: 75% for general category and 100% for SC/ST entrepreneurs

Zone – 5: Nil



11.1.6. Exemption from Entry Tax


In Zone – 1(Special Zone), 2, 3 & 4 for all category and Zone 5 for SC / ST only in notified industrial areas and also

all 100% EOUs and EOUs with 25% export obligation in the entire area of Zone – 5. 100% exemption from

payment of ET on ‘Plant & Machinery and Capital Goods’ for an initial period of 3 years from the date of

commencement of project implementation. For this purpose, the term Plant & Machinery and Capital Goods’

also includes Plant & Machinery, equipment etc. including machineries for captive generation of Electricity.

On raw materials, inputs, component parts & consumables (excluding petroleum products) [wherever applicable]

for a period of 5 years from the date of commencement of commercial production.

In respect of Mega, Ultra Mega and Super Mega Enterprises, Additional One, Two and Three years will be

allowed respectively for operational period. Besides, Mega, Ultra Mega and Super Mega Enterprises projects

implemented in phases, with the approval of the Government, each phase will be treated as new units for

exemption of entry tax.

11.1.7. Anchor unit Subsidy

Anchor unit subsidy of 2% - Zone -1(Special Zone); 1.5%- Zone-2&3, and 1% in Zone-4 of fixed investment shall

be offered for the first two manufacturing Enterprises with minimum investment of INR100 crore and minimum

employment of 100 persons in each of the taluks with a cap of Rs.3 Crore in Zone -1(Special Zone), Rs. 2 Crore

in Zone – 2 & Zone – 3 and Rs.1 Crore in Zone 4.

Anchor Unit subsidy will be applicable only in Taluks where no industrial enterprises of the above size exist at present.

11.1.8. Subsidy for setting up ETPs

MSME, Large, Mega, Ultra Mega, Super Mega Enterprises and Private Industrial Area Layouts:

One time capital subsidy upto 50% of the cost of Effluent Treatment Plants (ETPs) in respect of Zone – 1(Special

Zone), 2, 3 & 4, subject to a ceiling of INR100 lakhs per in respect of MSME, Large and INR2.00, INR3.00

&INR4.00 Crores in respect of Mega, Ultra Mega and Super Mega manufacturing enterprise respectively.

11.1.9. Reimbursement of partial net VAT as Interest Free Loan / Grant

MSME, Large, Mega, Ultra Mega & Super Mega Enterprises:

All MSME, Large, Mega, Ultra Mega & Super Mega Enterprises established in Zone – 1(Special Zone), 2, 3 & 4

shall be refunded with partial net VAT as either Interest free loan or grant according to choice / option of the

industry :



Investment range on

fixed assets

(INR cr.)

Min. Direct Emp. (Nos.) Quantum of interest free loan

Quantum of grant

MSME ---- 50% of assessed net VAT for initial 4

yrs. subject to the max. of 100% of

total value of fixed assets.

Repayment of the loan shall be in 3

annual installments after

moratorium of 4 yrs for each

installments of the loan.

25% of the net VAT paid will be

refunded as grant for a period of

4 years subject to maximum of

50% of the total fixed assets

value.

Large Enterprises:

(i.e investment on

fixed assets up to

INR250 Crores)

Minimum 50 employment

for project up to INR50.00

crores and additional 25

employment for every INR

50 cr. investment.

50% of assessed net VAT for initial 5

yrs. subject to the max. of 100% of



annual installments after 5 yrs.





value.

Mega Enterprises :

(i.e investment on

fixed assets above

INR250 Crores up to

INR500 Crores)


for investment up to

INR300 crores and

additional 25 employment

for every INR 50 cr.

investment.

50% of assessed gross VAT for initial

6 yrs. subject to the max. of 75% of



annual installments after 6 yrs.





value.

Ultra Mega

Enterprises :

(i.e investment on

fixed assets above

INR500 Crores up to

INR100 Crores)


up to investment of

INR600 Crs and additional

25 employment for every

INR100 Crs additional

investment





annual instalments after 7 yrs.





value.

Super Mega

Enterprises :

(i.e investment on


up to Rs 1100 Crs and

additional 25 employment









Investment range on

fixed assets

(INR cr.)

Min. Direct Emp. (Nos.) Quantum of interest free loan

Quantum of grant

fixed assets above

INR1000 Crores)

for every INR 100 Crs

additional investment

Repayment of the loan shall be in

4 annual installments after 10 yrs.


value.

11.1.10. Interest Subsidy

Micro and Small manufacturing enterprises:

Interest subsidy @ 5% & 3% on term loans to Micro and Small respectively. 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 6 years, 5 years and 4 and 3 years in Zone -1(Special Zone), Zone 2, Zone 3 & Zone 4,

respectively.

11.1.11. Exemption from Tax on Electricity Tariff

Micro, Small & Medium Mfg. Enterprises

100% exemption of tax on electricity tariff for the initial period of Six years, five years, four years and three years

in Zone -1(Special Zone), Zone-2, Zone-3 and Zone – 4, respectively.

11.1.12. Power Tariff concessions

Micro enterprises in Zone -1(Special Zone) and 2 with power connection up to 10 HP will be extended with refund

facility of power tariff to an extent of INR1.00 per unit, for a period of 3 years.

11.1.13. Technology Upgradation, Quality Certification and Patent Registration

Micro, Small & Medium Mfg. Enterprises

(i) Interest Subsidy on TU Loan:

Zone -1(Special Zone), 2 &3 : 5 % on loans availed from KSFC, KSIIDC & Scheduled commercial banks, which

are not covered under CLCSS of GOI.

(ii) ISO series certification:

Zone -1(Special Zone), 2, 3 & 4: 75% of cost (max.INR75,000).

(iii) BIS Certification:

50% of fees payable to BIS (max. INR20,000) and 25% of cost (max.INR50,000) for purchase of testing

equipment’s as approved by BIS.



(iv) Patentregistration:

75% of cost of fees payable to Patent Office (max. INR1.25 lakhs) and 50% of cost (max.INR75,000) towards

attorney fees, patent search etc.

(v) Technology Adoption:

25% of cost (max.INR50,000) for adopting technology from recognized national laboratories.

(vi) Technology Business Incubation Centre: 25% of the project cost (Max:INR50 lakhs).

11.1.14. Water harvesting / Conservation Measures

Small & Medium Mfg. enterprises in all Zones.

(i) Rain water harvesting : 50% of cost (max. INR 1 lakh)

(ii) Waste water recycling : 50% of cost (max. INR 5 lakh)

(iii) Zero discharge process: 50% of cost (max. INR 5 lakh).

11.1.15. Energy Conservation

Micro, 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 INR5 lakh).

Use of non-conventional energy sources: 10% of capital cost (max. INR5 lakh).

Subsidy of Rs.0.50 per unit of Captive Power Generated and consumed through Solar & Wind Energy sources only.

11.1.16. Support to Sugar Sector

New Sugar units / Existing Sugar factories taking up expansion set up with cogeneration plants will be provided

interest free loan to the extent of purchase tax to be paid on the sugarcane during first 5 years of the operations.

In respect of expansion the interest free loan will be provided to extent of the purchase tax paid on the sugarcane

crushed over and above the pre-expansion crushing capacity.

11.1.17. Additional Package of Incentives & Concessions to focused manufacturing sectors

A. Aerospace sector :

As per Aerospace Policy

B. Automotive / Steel / Cement / Agro based / Tool room sector to Mega, Ultra Mega and Super Mega

projects.

(i) Electricity duty exemption is available to Large, Mega, Ultra Mega and Super Mega projects for a period of

(06) six years, (07) seven years, (08) Eight years & (09) Nine years, respectively.



(ii) CST paid will be refunded to an extent of 60% for a period of 7, 8, 9 and 10 years in respect of Large, Mega,

Ultra Mega and Super Mega Industries respectively.

(iii) Entry tax exemption during operational period (excluding petroleum products) will be extended with

additional one year over and above the standard package of incentives and concessions.

(iv) In respect of Mega Industries Interest free loan to the extent of 40% of the Gross Vat generated by the unit

for 08 (eight) years to be repaid in (08) eight equal annual instalments starting from 09th year. (This is in lieu

of provisions in 2009-14 policy.)

11.1.18 Special Package of Incentives & Concessions

Special package of Incentives over and above the standard package will be offered for Mega, Ultra Mega and Super Mega projects based on the recommendations of SHLCC depending upon merits and advantages of such projects for the State.

11.1.19. Package of Incentives and Concessions for Private Industrial Areas / Estates

To encourage private sector participation in development of industrial estates/ parks following

incentives and concessions shall be offered:

(i) Equity participation

The State Government will share upto 20% of infrastructure cost to a maximum of INR10 crore

per project as its equity in capital investment.

(ii) Deferred Payment

Bulk land acquired by Government / KIADB will be leased out to the proponent on the basis

deferred payment, to ease the initial burden of the proponent

(iii) Incentives for adopting best practices

Costs incurred for energy efficient initiative and other best practices adopted in the industrial

estates / parks shall be reimbursed as follows:

Energy efficient initiative : 25% of the cost subject to a ceiling of INR5 crore per project.

Solar power projects : 25 % of the cost subject to a ceiling of INR5 crore per project.

Waste to energy concept : 25 % of the cost subject to a ceiling of INR10 crore per project.

Recycling of Water &re-use of treated

water

: 25 % of the cost subject to a ceiling of INR10 crore per project.

Desalination plants : 25 % of the cost subject to a ceiling of INR10 crore per project in

coastal areas



12. Annexure 3

12.1. List of Service Enterprises eligible for package of Incentives and

Concession

1. Logistics facilities supporting to industries only

1.1. Container Freight Station Operators,

1.2. Warehouses,

1.3. Cold Storages and cold chain for logistic support to Food Processing Industry

1.4. Material handling equipment (except transport vehicles and good carriers) )

2. Material Testing Centre

3. R & D Centres

4. Technical testing and analysis servicing

5. Maintenance and repair of equipment

6. Packaging services

7. Refuse disposal services

8. Tailoring

9. Flour mills

10. Printing

11. General engineering, fabrication, motor winding, automobile servicing and repairs, electro plating, industrial

paintings, etc., engaged in job work

12. Weigh bridges and health care facility set up within the KIADB / KSSIDC industrial areas

13. State Level Co-ordination Committee is empowered to add / delete service activities listed in this Annexure.



13. Annexure 4

13.1. List of Industrial Activities / Enterprises not eligible for Incentives

and Concessions

1 Breweries & Distilleries of all types excluding winery

2 Enterprises utilizing molasses / rectified spirit / denatured spirit as main raw material for

manufacture of potable alcohol

3 Khandasari and Jaggary making enterprises

4 Photo Studios & Color Processing Enterprises

5 Photo Copying & Xerox Machines

6 Fertilizer Mixing

7 Re-packing of Drugs / Medicines / Chemicals, without any processing or value addition

8 All types of Saw Mills

9 Beedies / Cigarettes / Cigars / Gutka & Tobacco based products

10 Azoic / Reactive Dyes

11 Fire Crackers

12 Industries manufacturing and or utilizing Ozone depleting substances

13 Power Laundries

14 Brick making Enterprises Excluding Cement Hallow Blocks, wire cut & fly ash bricks and Refractory

bricks

15 Poultry excluding hatcheries

16 Popcorn, Ice Cream, Kulfi& Ice candy making Enterprises

17 Coffee Roasting and Grinding

18 Clock and Watch Repair shops

19 Cassette recording [Audio & video]

20 Cyanide

21 Mining

22 Lime kiln / burnt lime



23 Hotels and motels

24 X-ray clinics and clinical / pathological laboratories and scanning, M.R.I. tests

25 All industries of mobile nature like rigs, concrete mixing plants, hot mix plants including site oriented

industries.

26 Manufacture of Chrysolite Asbestos (White crystal)



14. Annexure 5

14.1. Definitions and Terms &Conditions

1. Definitions

a) As per the MSMED Act, 2006,ManufacturingEnterprises have been defined based on of investment in

plant and machinery and classified into:

- Micro Enterprises - Investment uptoINR25 lakhs

- Small Enterprises - Investment above INR25 lakh and uptoINR500 lakhs.

- Medium Enterprises - Investment above INR500 lakhs and uptoINR1,000 lakhs.

b) As per the MSMED Act, 2006, Service Enterprises have been defined based on investment equipment

and classified into:

- Micro Enterprises - Investment uptoINR10 lakh

- Small Enterprises - Investment above INR10 lakh and uptoINR200 lakhs.

- Medium Enterprises - Investment above INR200 lakhs and uptoINR500 lakhs.

c) Large Scale Industry:

An Industrial Unit which is not classified as Micro, Small and Medium Enterprise and with investments

uptoINR 250 cr. shall be classified as large scale industry.

d) Mega Project:

Projects with an investment on fixed assets above INR250 crores and up to INR500 crores

e) Ultra Mega Project:

Projects with an investment on fixed assets above INR500 crores and up to INR1000 crores.

f) Super Mega Project:

Projects with an investment on fixed assets above INR1000 crores

g) 100% Export Oriented Enterprises [Export Oriented Enterprises]

A 100% Export Oriented Enterprises is one which undertakes to export its entire production of goods

subject to relaxation as permitted by Govt. of India from time to time. Such Enterprises may be set up

either under the Export Oriented Enterprises or under EPIP [Export Promotion Industrial Park] Scheme

or under the EHTP [Electronic Hardware Technology Park] Scheme or Software Technology Park

Scheme or Special Economic Zone.



h) 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.

2. Sanction of Incentives & Concessions as per this Government Order is Subject

to the following terms and Conditions:

a) All new industrial investments shall create maximum possible additional employment opportunities

and provide a minimum 80% of employment to the local people on an overall basis [100%

employment to local people in case of Group C & D categories will be insisted] and this will be

monitored during disbursement of incentives and concessions.

The above requirements regarding employment to local people will be monitored by the DIC for a

period of 5 years. Failure of the industries to provide employment to local people as stipulated above

will be reported to the concerned DLSWCC/ SLSWCC/ SHLCC, which will recommend for recovery of

incentives and concessions sanctioned to the unit, for which purpose a suitable under-taking will have

to be furnished by the unit concerned before sanctioning incentives and concessions.

b) These incentives and concessions shall not be available for the Enterprises listed in Annexure 4

irrespective of the location.

c) The incentives and concessions as per this Government Order shall be applicable only to all new and

additional investments made on or after 01.04.2014.

d) The incentives and concessions under this policy will be available to all new investments both for

establishment of new Enterprises or for expansion, diversification and modernization of existing

industries. To be eligible for considering as expansion / diversification / modernization, enterprises

shall make an additional investment of at least 50% of the original investment of the existing unit

(Original investment mean, the investment prior to first sale Invoice raised for the initial investment).

However, while calculating the investment promotion subsidy for expansion / diversification /

modernization enterprises, the subsidy sanctioned for the original investment need not be taken

for calculating the eligible subsidy.

e) The quantum of investment subsidy shall be computed on the value of fixed assets as approved by the

financial institutions or commercial banks.

f) The definition of Micro, Small, Medium Enterprises and Large Scale Industry as indicated above shall

automatically stand revised as and when Government of India makes any changes in such definition

and benefits under this package shall be available to the Micro, Small, MediumEnterprises and Large

Scale Industry as per the new definition from the respective dates.



g) The validity of incentives and concessions as per this order shall be for a period of five years from

1st

April 2014 [i.e., upto31st

March 2019].

h) Wherever industrial Enterprises avail subsidy / interest subsidy under any of other policies of the of

Govt. of Karnataka / Govt. of India, they will continue to avail the benefit in that policy only and they

are not eligible benefit under this policy.

i) Incentives and concessions under this policy shall be available only for manufacturing Enterprises.

However, specified categories of industry related service enterprises as listed in Annexure – 3 shall also

be eligible for incentives and concessions as per this order.

j) The incentives and concessions under this policy will come into force from 1st April 2014. 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.

k) Industrial Enterprises which are in the process of being established at the time of announcement of this

Industrial Policy 2014-19, shall have an option of availing incentives and concessions under the 2009-

14 policy provided; loan is sanctioned by the financial institution prior to 01.04.2014 and subject to

fulfillment of all the following conditions.

1) Sanction of Term Loan should be before 01.04.2014 and first release of term loan

shall be 30.6.2014.

2) 50% of the investment on fixed assets should have completed before 30.9.2014.

3) Such Enterprises shall commence commercial production on or before 31.12.2014

The above option should be exercised prior to 31.12.2014 and should be registered with Commissioner

for Industrial Development and Director of Industries and Commerce, Bangalore or in Office of the

concerned District Industries Centres with necessary documentary evidence. Options once exercised

cannot be withdrawn and shall be binding. Enterprises which do not exercise such option prior to

31.12.2014shall automatically be governed by the provisions of this order. However the total

investment shall be taken into consideration irrespective of period of investment i.e., before or after 0

1-04-2014 under one eligible policy only. However theStamp Duty Exemption and Entry Tax

Exemptions granted during 2009-14 policy at the time of implementation of the project will continue

and for other incentives, the industrial policy as applicable in terms of above procedures, holds good.

All eligible Enterprises under 2014-19 policy shall submit application for sanction of incentives before

the concerned District Industries Centres within a period from one year from the date of

commencement of commercial production. Enterprises who fail to comply this deadline will not be

eligible for investment subsidy.



l) Incentives and concessions for investments in the IT / BT / Tourism / Wine Sector / Neera processing

sector / Infrastructure Development sector / Textiles / Renewable Energy / Aero Space / Pharma etc.

will however continue to be governed by the respective policies of the Government.

m) Unit shall avail incentives and concessions under one Industrial Policy only unless otherwise specified.

However industries which were in the process of implementation at the time of announcement of this

policy and availed benefits like Stamp duty exemption on land allotment and Entry tax exemption for

implementation period in the earlier policy, are eligible to avail the other benefits under the current

policy subject to fulfilling the condition as explained at (J) above.

n) The Stamp duty exemptions, Entry tax exemptions and Exemption on tax on electricity tariff as per

this policy are applicable to eligible enterprises only after the issual of notifications from the Revenue,

Finance and Energy Departments, respectively.

o) Separate guidelines for administration of these incentives and concessions will be issued for the

guidance of the concerned agencies and officers with the approval of the State Level Coordination

Committee under the Chairmanship of the Principal Secretary to Government, C&I Department.

Interpretation of Government Orders (including of previous policies) and the decision thereon of this

State Level Coordination Committee shall be final.

Terms & Conditions for Private Industrial Areas / Estates

1. Private Industrial areas / estates shall be developed : a. By Private individuals, Companies, Co-operative Societies and Associations

b. By Public Private Partnership

2. Proposals for development of private industrial areas / estates will be treated as industrial infrastructure and

approval in accordance with Karnataka Industries Facilitation Act will be accorded by SLSWCC or SHLCC

depending on size of investment.

3. The Policy is not applicable in Zone – 5.

4. The minimum area / extent of land shall be 200 acres.

5. The development of industrial area / estate shall be in consistence with the zoning regulations of local LPA or

as per KTCP Act and others in practice.

a. The master plan / layout plan of private industrial area / estates shall be approved by a committee

constituted under the Chairmanship of Deputy Commissioner comprising of JD, DIC, Environmental

Officer, KSPCB, Assistant Director, Factories and Boilers, Rep. of KIADB and KSSIDC, with District

Town Planning Officer as Member Secretary.

b. The building plans in individual plots shall be approved by concerned local authorities.



6. Size of the plots in a private industrial area shall be invariably 1/4 acre, 1/2 acre, 1 acre, 1.5 acres & 2 acres

and above.

7. Preference of up to 20% shall be given to MSME sector in the allotment of land / sheds in private industrial

area / estate with first right of refusal.

8. The developers shall adopt a scientific method for fixation of price to make available the infrastructure at

reasonable rates.

9. The developers of private industrial areas shall comply with siting guidelines of MOEF.

10. Private Industrial Areas / Estates developed on PPP basis shall reserve 22.5% of plots / sheds for SC / ST

entrepreneurs with first right of refusal.

11. The proponent of private industrial layouts need to:

a. Prepare HRD plan to train the land losers / local persons and organise training programmes for such

people and also provide employment to those persons.

b. Provide atleast 80% of job to local people on overall basis.

c. Prepare a vendor development plan and facilitate setting up service / manufacturing vendor

enterprises.

d. Prepare a plan for adequate social infrastructure and public amenities for the project affected

persons.

12. Proponent is liable to pay back all the fiscal benefits availed under this Policy to the Government in case the

project is not implemented as per Schedule.

13. The Government land allotted for private industrial areas / estates will be resumed upon non implementation.



15. Annexure 6

15.1. Important contacts

Contact Address Contact Address

Principal Secretary to Government

Commerce and Industries Department,

Room No.1 06, 1" floor, VikasaSoudha,

Dr. AmbedkarVeedhi, Bangalore 560001.

Phone: 22252443

Fax: 22259870

E-mail: [email protected]

. website: www.karnatakaindustry.gov.in

Commissioner for Textile Development

and

Director of Handlooms & Textiles

No. 14/3A, 3'" floor, RashtrothanaParishat

Building,

N.P. Road, Bangalore.

Ph: 080 22271628 Fax: 080 22226082


Website:

www.textiles.kar.nic.in

Principal Secretary to Government

Department of IT & BT and Science and

Technology,

Government of Karnataka, VI floor, 5th Stage,

M. S. Building, Dr. B.R. AmbedkarVeedhi,

Bangalore 560001.

Ph: 080-2228 0562, 22032434

Fax: 080 22288340, 22262450

E-mail: itsec@bangaloreitbtin

Website:www.bangaloreitbitin

Commissioner

Bangalore Development Authority

T. Chowdaiah Road, Kumarapark

west,

Bangalore 560020.

Ph: 080 2336 0843 Fax: 080 2334 5799

E-mail: [email protected] website:

www.bdabangalore.org

Secretary, Water Resources Department,

VikasaSoudha, Dr. B.R. Ambedkar Road,

Bangalore 560 001.

Ph: 080 2225 5524, 2225 5306

Fax: 080 2254 2753


http://waterresources.kar.nic.in

Commissioner

Bangalore Metropolitan Region

Development

Authority (BMRDA)

#1, Ali Askar Road, Bangalore 560 052.


Website: www.bmrda.kar.nic.in

The Secretary to Government

(Environment to Ecology)

Department of Forest Environment & Ecology

Room NO.708, Gate 2, Multi Storie Building,

Managing Director

Karnataka State Industrial Investment

&

Development Corporation Limited,


mailto:[email protected]


http://www.karnatakaindustry.gov.in/

http://www.textiles.kar.nic.in/


http://www.bdabangalore.org/

http://www.bangaloreitbitin/


http://waterresources.kar.nic.in/

http://www.bmrda.kar.nic.in/



Dr. AmbedkarVeedhi, Bangalore 560 001.

Ph: 080 22254377,22092445 Fax: 080

22254377


Website: www.parisara.kar.nic.in

4th floor, East Entrance, KhanijaBhavan,

Bangalore

560001.

Ph: 080 22255911 Fax: 080 22255740


Website: www.ksiidc.com

Commissioner for Industrial Development and

Director of Industries and Commerce

2"" floor, Khanijabhavan, Race Course Road,

Bangalore 560001.

Ph: 080 2223 8679 Fax: 080 22389909

E-mail:

[email protected]

Website: www.karnatakaindustry.gov.in

The Chief Executive Officer and Executive

Member

Karnataka Industrial Areas Development Board,

II floor, RashtrothanaParishatBhavan,

14/3A Nrupathunga Road, Bangalore

560001.

Ph: 080 2221 1066 Fax: 080 2221 7702


Website: www.kiadb.in

Director, Department of Mines and Geology,

No. 49, KhanijaBhavan, Race Course Road,

Bangalore 560 001.

Ph: 080 22269632,22269633 Fax: 080

22269632


Website. www.mines.kar.nic.in

Managing Director

Karnataka State Small Industries

Development

Corporation Limited

Industrial Estate, Rajajinagar,

Bangalore 560010.

Ph: 080 23303037,2221 7702 (Board)


Website: www.kssidc.kar.nic.in

Commissioner for Labour

"KarmikaBhavan", Bannerghatta Road,

Bangalore 560029.

Ph: 080 26531252 Fax: 080 26531254


Website: http://labour.kar.nic.in

Chairman

Karnataka State Pollution Control

Board

No.49, ParisaraBhavan,Church Street,

Bangalore 560 001.

Ph: 080 25588151,25589111,112,113

Fax: 080 2558 6321


website: www.kspcb.kar.nic.in



http://www.parisara.kar.nic.in/




http://www.karnatakaindustry.gov.in/

http://www.kiadb.in/



http://www.mines.kar.nic.in/

http://www.kssidc.kar.nic.in/


http://labour.kar.nic.in/


http://www.kspcb.kar.nic.in/



The Managing Director

Visvesvaraya Trade Promotion Centre

III Floor, VTPC Building, Kasturba Road,

Bangalore 560 001.

Phone: 22864281/22860853 Fax: 91-80-

22864281

Grams: VITRO


Website: www.vitcblr.org

Managing Director

Hubli Electricity Supply Company

Navanagar, P.B. Road, Hubli 580 029.

Ph: 0836-2324811 Fax: 0836-2324813


website: www.hescom.co.in

Managing Director

Karnataka UdyogMitra

3'" floor, South Block, KhanijaBhavan, Race

Course

Road, Bangalore 560 001.

Ph: 080 2228 2392 / 5659 / 6632

Fax: 080 22266063


Website: www.kumbangalore.com

Managing Director

Gulbarga Electricity Supply Company Limited

GESCOM)

Corporate Office, Railway Station Main road,

Gulbarga 585 102

Ph: 08472-256581 Fax: 08472-456842


website: www.gesco.in

Managing Director

Karnataka Power Transmission Corporation

Ltd.

Cauvery Bhavan, K.G. Road, Bangalore 560

009.

Ph: 080 2221 4342, 2224 3926

Fax: 080 2211 0134


website: www.kptcl.com

Managing Director

Mangalore Electricity Supply

Company Limited(MESCOM)

Corporate Office, Paradiym Plaza,

5"floor,

AB Shetty Circle, Mangalore 57500.

Ph: 0824-2444300 Fax: 0824-

2444360


website: www.mesco.in

Managing Director

Bangalore Electricity Supply Company

(BESCOM)

Corporate Office, K.R. Circle, Bangalore 560

001.

Ph: 080 22354929 Fax: 080 22354925


website: www.bescom.org

Managing Director

Chamundeshwari Electricity Supply Corporation

(CESCOM)

No. 927, LJ Avenue, Saraswathipuram,

Mysore 570 009.

Ph: 0821-2417101 Fax: 0821-2417107




http://www.hescom.co.in/

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Contact details of Joint Directors of District Industries Centres, Department of Industries

and Commerce, Government of Karnataka

District Contact Details

Bagalakote

The Joint Director, District Industries Centre,

Room No.135, Administrative Building,

Navanagar, Bagalakote 587 101.

Off Ph : 08354- 235294/235245, Fax: 235294


Bangalore (R)


Rajajinagar Industrial Estate, West of Chord Road,

Bangalore 560 044.

Off Ph: 080 - 23145216/23142151/23142152, Fax :23145216


Bangalore (U)


1st floor, Rajajinagar Industrial Estate, West of Chord Road,

Bangalore 560 044.

Off Ph : 080 - 23501481, Fax: 080 – 23501478


Belgaum

The Joint Director, District Industries Centre

Udyambagh Belgaum - 590 008.

Off Ph : 2440430/2440852 Fax: 2441209


Bellary


Hospet Road, Bellary-583 103.

Off Ph : 08392 242370/242643/242369, Fax: 242370


Bidar


Beside BUDA office, Naubad, Bidar - 585 401

08482/232769/233129 (temporary)

[email protected]

Bijapur

The Joint Director, District Industries

Centre Industrial Estate, Station Back Road,

ShikharaKhana, Bijapur - 586 101.

Off Ph: 08352-250976/257125 Fax: 250607












Chamarajanagar


Room No.323, 3rd Floor, District Office Complex,

B.Rachaiah Double Road,

Chamarajanagar 571 313

Off Ph: 08226-224916/224915, Fax: 224916


Chickmagalur


Near ZillaPanchayat, Kadur Road, Chickmagalur 577 102

Off Ph : 08262-220921/220726 Fax: 220476


Chickballapur


B BRoad, ATI Building, Chickballapur 562101

Off Ph : 08156-273303/270571, Fax :273302


Chitradurga

The Joint Director, District Industries

Centre Jogimatt Road, Chitradurga - 577 501.

Ph Off: 08194-235994/235817/235783, Fax :235994


Mangalore


Yayyadi, Mangalore 575 008.

Off Ph: 0824-2212494/2214021, Fax: 2212494


Davangere


Opp. Church, 10th Main, P.J.Extension, Davangere - 5770 002.

Off Ph : 08192-232052/232053/232051 Fax: 232053


Dharwad


Rayapura, Dharwad - 580 009.

Off Ph : 0836-2322986/2322627 Fax: 2322627

e-mail: [email protected]

Gadag


District Administrative Building, 2nd Floor,

Room No. 221, Hubli Road, Gadag - 582103

Off Ph: 08372-230771/23139 Fax: 230429













Gulbarga


M.S.K.Mili Road, Jewarigi Road Cross

Gulbarga - 585 102.

Off Ph : 08472-223988 Fax: 232404


Hassan


Industrial Estate, B.M. Road, Hassan - 573 201.

Off Ph:08172-240606/240289, Fax:240289


Haveri


Room No.24, B Block, District Administrative

Building, Devagiri, Haveri - 581 110.

Off Ph : 08375-249028/249029 Fax: 249028


Madikeri


Kohinur Road, Industrial Estate, Madikeri - 571 121.

Off Ph: 08272-228746/228748/228431 Fax: 228746


Kolar


DC Office Compound, Kolar- 563101.

Off Ph: 08152-222402/222403 Fax: 224920


Koppal


Opposite Mayur Hotel, Hospet Road, Koppal 583231.

Off Ph: 08539-231101 Fax: 231548


Mandya


Near KSFC, Subhasnagar, Mandya - 571 401.

Off Ph: 08232-224098/221358 Fax: 226964


Mysore


CTI Building Sayyaji Rao Road, Mysore - 570 001.

Off Ph: 0821-2446885/2449810 Fax: 2446885


Raichur


Hyderabad Road, Raichur - 584 101.

Off Ph: 08532-235646 Fax: 235811













Ramnagar


Industrial Estate, Ramnagar - 571 511.

Ph: 080-7273008, Fax :7273007


Shimoga


Nehru Road Shimoga - 577 201.

Off Ph: 08182-278302/222802 Fax: 277522


Tumkur


Industrial Estate, B.H.Road, Tumkur – 572102

Off Ph :0816-2280741/2281485 Fax: 2281562


Udupi


VST Road, Jayalakshmi Building, Kalsanka, Udupi 576 101.

Off Ph: 0820-2534338/2522605/2531915 Fax:2534338,


Karwar


ShirawadaKarwar - 581 306.

Off Ph : 08382-282302/282367 Fax :282302

E-mail:[email protected]

Yadagir


Yadagir District, Yadagir-

Off Ph: 08472-223988

E-mail:[email protected]






mailto:E-mail:[email protected]

