Bengaluru: Barely a year after granting ‘Industrial Township’ status to the Peenya Industrial Area by declaring it a special investment region, the govt has withdrawn the decision, dealing a blow to plans for a separate governance model for the industrial hub.
In a notification issued on Tuesday, the urban development department said the proposal announced earlier by the commerce and industries department to notify Peenya as a special investment region and transfer its administration to the Karnataka Industrial Areas Development Board (KIADB) cannot be implemented.
The govt stated that the Peenya Industrial Area already falls within the jurisdiction of corporation limits. Hence, the area cannot be brought under KIADB or any other authority by taking it out of the civic administration framework.
The rollback is seen as a setback to efforts aimed at creating a dedicated industrial township for one of Asia’s largest industrial clusters, which continues to face major civic infrastructure issues, including poor roads, drainage and waste management problems.
The notification stated apart from Peenya, 17 other special investment regions announced by the industries department will continue to be governed under the Greater Bengaluru Governance Act-2024, the Karnataka Municipal Corporations Act-1976, and the Karnataka Municipalities Act-1964. The respective local bodies and municipal corporations will continue to exercise administrative powers in these areas, including levy and collection of property taxes and other civic responsibilities.
In June 2025, the govt issued a notification declaring Peenya’s 1st, 2nd, 3rd and 4th phase industrial areas, spread across 1,461.5 acres, as a special investment region. The notification had also appointed KIADB as the nodal agency to administer the region and collect taxes.
Under the proposed model, 70% of the revenue generated through taxes was to be utilised for improving civic infrastructure within the industrial area, while the remaining 30% was to be shared with the city corporation under whose jurisdiction Peenya falls.
Peenya Industrial Area houses more than 13,500 industrial units, provides employment to over 14 lakh people and these units contribute over Rs 8,500 crore in taxes to the govt annually.
Shiva Kumar R, former president of the Peenya Industries Association, said the govt’s decision to declare Peenya as a special investment region had brought no change on the ground for industries in the area. “The govt had promised formation of a 15-member committee, but industries were given representation only through two members while the majority were govt officials. Even that committee was never formed,” he said.
He alleged that though KIADB has been collecting taxes, there is no clarity on how the funds are being utilised or any concrete plan for infrastructure improvement.
Kumar pointed out that property records continue to remain a major issue in the industrial area. “Khatas were originally issued by the erstwhile BBMP. Over the years, several original plot owners have sold portions of their properties and multiple industrial units are now functioning within a single plot. KIADB has failed to address issues related to property identification numbers and ownership records,” he said.
Criticising the poor condition of roads in the industrial hub, he said infrastructure remains neglected despite its economic importance. “Peenya industries are located close to the national highway, but even village roads are in better condition than roads here,” he claimed.
There was hope for an industrial township authority on the lines of the Electronics City Industrial Township Authority (ELCITA), but that model never materialised. On the latest proposal to bring Peenya under the Greater Bengaluru Authority framework, Shiva Kumar said industry representatives are yet to receive clarity from the govt.
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eid 2026 Suchith Kidiyoor is an Assistant Editor with The Times of India, ...
Read MoreSuchith Kidiyoor is an Assistant Editor with The Times of India, Bengaluru, bringing over 15 years of journalistic experience. A keen observer of the city’s evolving landscape, he specializes in covering urban mobility, infrastructure, traffic management, urban planning, and public policy. Known for his in-depth reporting, he also closely follows developments within the Karnataka government, including affairs at the state secretariat and sessions of the legislature.
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