Karnataka: New industrial policy sets investment target of Rs 5 lakh crore

BENGALURU: The Karnataka government is all set to roll out a new industrial policy (2020-2025) with an ambitious plan to attract Rs 5 lakh crore investments over the next five years and maintain 10% yearon-year growth. It also aims to generate employment opportunities for 20 lakh people.
The state cabinet met on Thursday and approved the policy that proposes to ensure jobs for locals with a minimum employment of 70 per cent to Kannadigas on an overall basis and 100 per cent in the case of Group D employees.

It hopes to take Karnataka to third position (now fourth) in merchandise exports in five years with a focus on automobiles, auto components, pharma and medical devices, engineering and machine tools, knowledge-based industries, aerospace and logistics sectors.
Tax incentives for backward zones
Industrial development in tier-2 and 3 cities and ensuring equitable growth in backward taluks will be a priority. The districts are classified as three zones and industrially backward ones will get tax incentives and subsidies. “There’s a need to look beyond Bengaluru, and it is also the government’s intention which is reflected in the policy,” industries minister Jagadish Shettar said.
The policy seeks to reserve 30 per cent of plots in KIADB industrial layouts for MSMEs. An online technology platform will be created for raw material suppliers, market access and enhance access to credit.
To encourage production, it suggests adoption of a turnover-based incentive system. For example, if an MSME clocks a production turnover of Rs 100 crore, it will get 10% of it as incentive. For medium and large industries, the incentive ranges from 1.7% to 2.5% of their turnover. “Karnataka will be the first state to have this system,” Shettar said. Currently, incentives are given on GST paid by industries.