Vision

To emerge as a global leader in Advanced Manufacturing, Research & Development, and Innovation and to create an ecosystem for an inclusive, balanced and sustainable development of the State.

Mission

To retain Karnataka’s position as a global manufacturing hub and to achieve higher and sustainable industrial growth through capital infusion, technology transfer, world class industrial infrastructure, skill up-gradation and benchmarking of policies and practices to best global standards.

Objectives

• • To attract investments worth INR 5 Lakh crore
• • To create employment opportunities for 20 Lakh people
• • To reach 3rd position in merchandise exports in the next five years
• • To maintain an industrial growth rate of 10 per cent per annum
• • To provide an enabling ecosystem for technology adoption and innovation

Strategies

Karnataka’s current strength in international competition is largely based on the strength of its industry. As a pioneer in industrial development, Government of Karnataka aims to raise mid-to-long term growth potential through a commitment to innovative growth. This encompasses strategies in support of industrial infrastructure, innovation, the new industrial revolution and the digital economy.

• • Promote sustainable, balanced and inclusive industrial growth.
• • Enable employment generation and increase labour market flexibility Through regulatory labour reforms.
• • Create strategic tie-ups for the emergence of Karnataka as the Knowledge and R&D Hub.
• • Focus on development and promotion of the MSME Sector
• • Facilitate availability of industrial land.
• • Promote Tier II/III cities of the State as engines of economic growth.
• • Place Karnataka in the forefront of India's international trade.
• • Showcase Karnataka as the “Factory of the future”- Industry 4.0
• • Engage with various stakeholders to develop sector specific skill development strategy.
• • Attract private investment in development of integrated/multi/sectoral industrial parks and flatted factories.
• • Create an environment to enhance ease of doing business in the State.
• • Support for R&D & Technology Upgradation.

Policy Period and Applicability

This policy shall be valid for a period of five years from the date of issue of Government Order or till a new Policy is announced.

Incentives and concessions under this policy shall primarily be available only for Manufacturing Enterprises / Industries and specified categories of service enterprises as listed in Annexure 3.

Focus sectors

• • Automobiles and Auto Components
• • Pharmaceuticals & Medical Devices
• • Engineering & Machine Tools
• • Knowledge Based Industries
• • Core Sectors- Cement & Steel
• • Aerospace and Defence
• • Sugar
• • Logistics
• • Renewable Energy
• • Electric Vehicles
• • Healthcare and Wellness
• • Higher Education
• • Bio Fuels

Promotion 0f Thrust Areas

To emerge as globally competitive with skill and scale that leverage high technology for growth, following thrust areas have been recognized.

• • Industry 4.0
• • Research & Development
• • Intellectual Property Rights (IPR)
• • Technology Adoption & Innovation
• • Cluster Development Initiatives
• • High Tech Clusters
• • District Industrial Cluster Development Program

Sr. No	District	Product / Cluster
01	Kalaburagi	Solar Panels, inverters, capacitors, laminators etc.
02	Chitradurga	All kinds of LED lights
03	Hassan	Tiles, Sanitary wares & Bathroom fittings
04	Koppal	Toys & Mechanized toys
05	Mysuru	Integrated Circuit Boards (ICB)
06	Ballari	Textiles
07	Chikkaballapura	Mobile phone components
08	Tumakuru	Sports & fitness goods
09	Bidar	Agricultural implements
10	Dharwad	Home and Personal Care Consumer Goods – FMCG
11	Bidar	Health & Wellness

• • MSME Cluster Development
• • Sustainability and Responsible Industrialization

Promotion of Micro, Small and Medium Enterprises (MSMEs)

Worldwide, the MSMEs have been accepted as engines of economic growth for promoting equitable development. MSMEs form an important and growing segment of Karnataka’s industrial sector and occupy a place of prominence in the economy of Karnataka. Karnataka has the 5th largest MSME base in the country with over 7.16 million registered units employing nearly 4.94 million people. In view of its massive potential for employment, growth and exports and to ensure MSMEs remain globally competitive, the policy will focus on developing an ecosystem for the MSMEs to enable them to thrive, grow and succeed.

Following interventions are proposed for MSME promotion:

• • SARTHAK - Centre of Excellence for MSMEs
• • Infrastructure Support
• • Technology Up-gradation & Technical Support
• • Enhanced Credit for MSMEs
• • Vendor Development and Facilitation
• • Marketing Support in Public Procurement
• • Skill Development & Entrepreneurship Development Program (EDP)
• • Support Services to Entrepreneurship and Livelihood Missions
• • Zilla Panchayat Schemes
• • Supports to Artisans
• • Dovetailing Government of India Schemes
• • Ongoing supportive schemes / programs for development of MSMEs.
• • MSME Manufacturing Excellence Awards
• • Equity Funding
• • Promotion of Design Clinics and Market-Driven Interventions for Khadi and Handicrafts Sector
• • Special Support to SC /ST Entrepreneurs
• • Incentives and Concessions

Export Promotion Measures

• • Creating Export Infrastructure and Logistics
• • Participation in International Trade Fairs
• • Awareness for Export Promotion
• • Global Market Intelligence
• • Town of Export Excellence
• • Export Awards
• • Strategic Implementation Unit

Promotion of Large, Mega, Ultra & Super-Mega Enterprises

• • Annual Action Plans for Investment Generation
• • Support to existing State PSUs
• • Infrastructure Support
• • International Investment Facilitation Desk
• • Investors Meet
• • Incentives and Concessions

Making Land and Labour easily available for Manufacturing

The emergence of Karnataka as a global industrial hub is dependent on its ability to provide easy access to land, labour and finance. Therefore, this policy puts special emphasis on simplification of regulatory framework and ease of doing business with respect to land and labour.

Land

As Karnataka continues to industrialise and move towards a more industry-based economy, industrial land demand continues to grow. The Government will take steps to make lands available to industry by initiating land regulatory reforms and ensuring development of new industrial areas / estates. The following reforms are identified for action

a.Regulatory Reforms

The Karnataka Land Reforms Act, 1961 (KLR Act, 1961) enacts law relating to land reforms in the State of Karnataka. Necessary amendments has been made in Karnataka Land Reforms Act,1961 to simplify procurement of land and for speedy conversion of agriculture land for industrial purposes within stipulated timelines.

b.Development of Industrial Land

Concerted efforts have been made to develop and strengthen State of the art infrastructure in various industrial areas and estates spread across the State. Government will focus more on making available allottable industrial lands / sheds with comprehensive infrastructure facilities to the project proponents across the State.

Promotion of Industrial Areas and Estates

Karnataka Industrial Area Development Board (KIADB)

In the past 5 years, Karnataka has received investment proposals through SHLCC and SLSWCC worth INR 3.73 Lakh crore for establishing MSMEs, large and mega industrial units which require more than 43,000 acres of industrial land which includes KIADB land, purchased under Section 109 of KLR Act, 1961, own land, leased land / rented building etc.

To cater to this demand for industrial land, during the past 5 years KIADB has approved 43 industrial layouts and notified 14,585 acres for the development of industrial areas and single unit complexes of which 95 percent of land has already been acquired.

Karnataka State Small Industries Development Corporation (KSSIDC)

In all new industrial estates & wherever mandated, KSSIDC shall set up Common Effluent Treatment Plants (CETP) or encourage private investor to set up and manage such CETPs.

KPTCL will designate all the industrial feeders of 33KV / 66KV / 110KV / 220KV as express feeders with 24/7 power supply.

Existing industrial estates older than ten years, the effort would be made to handover these industrial estates to respective Industrial Associations for future maintenance.

Private Industrial Parks

Government proposes to encourage establishment of industrial areas and estates in the State either by private investors or through PPP mode. These would be approved by SHLCC / SLSWCC

Sr. No	District	Product / Cluster
01	Knowledge Based Industries / Flatted Factories	5
02	Logistics	50
03	Multi / Sector Specific Industrial Parks	75
04	Integrated Industrial Parks	250

c. Leveraging local resources and Special Projects

• District Level Perspective Plan

Government plans to conduct detailed studies in districts to assess their present status and performance. It will be an integrated plan in a district taking into account the resources (natural, human and financial) available and covering the sectoral activities and schemes assigned to district level.

The studies will aim at gauging the current economic and socio-economic scenario along with a comprehensive industry assessment capturing the demands and needs of the industry.

• Leveraging Special Projects

Department will promote setting up of industrial nodes / clusters along the special projects declared by Central / State Government such as Chennai Bengaluru Industrial Corridor (CBIC), Bengaluru Mumbai Economic Corridor etc. KIADB will be the nodal agency for development of industrial nodes along with the special projects of Central / State Government.

• Economic Corridors

Government of India is developing the Peninsular Region Industrial Development (PRIDE) Corridor as a development strategy to accelerate regional economic integration and development, including giving impetus to manufacturing. The proposed two corridors in the State viz. Chennai-Bengaluru Industrial Corridor and Bengaluru-Mumbai Economic Corridor of the PRIDE Corridor are very important link in the Golden Quadrilateral.

These two corridors with a strategic focus on inclusive development will provide an impetus to industrialization and planned urbanization. They aim to facilitate the development of a well-planned and efficient industrial base by providing smooth access to the industrial production units, decreased transportation logistics costs along with an improved delivery time and reduction in inventory cost and ensure increased private investments in manufacturing and industrial activities. In each of these corridors, manufacturing will be a key economic driver and these projects are critical in raising the share of manufacturing in India's Gross Domestic Product (GDP) from the current levels of 16 % to 25 % by 2025.

Chennai Bengaluru Industrial Corridor (CBIC)

Bengaluru Mumbai Economic Corridor (BMEC)

• Dharwad Special Investment Region (SIR)

It is proposed to establish, develop, operate and regulate the Special Investment Regions (SIRs) in the State with an area of more than 100 sq. Kms or Industrial Area with an area of 50-100 sq. Kms to set up world class global hubs of economic activities & services supported by world class infrastructure, premium civic amenities, centres of excellence and proactive policy framework.

"Economic Activities and Services” in these SIRs including but not limited to industrial, manufacturing, commercial, financial, processing, packaging, logistics, transport, tourism, hospitality, health, housing, entertainment, research and development, education and training, information and communication, management and consultancy, corporate offices and the activities and services connected therewith or incidental thereto and other economic activities.

d. KIADB Reforms

Karnataka Industrial Area Development Board (KIADB) established under the Karnataka Industrial Areas Development Act, 1966 is the principal agency which acquires the land for industrial use. It promotes and assists in the rapid and orderly establishment, growth and development of industries in the State.

e. KSSIDC Reforms

In view of making the land available in time for industrial use at a reasonable and competitive price without any hassle in the developed or under developed area of KSSIDC, final price fixation will be as follows:

• KSSIDC will fix the final price for the plot / shed within two years from the date of execution of lease cum sale deed / lease deed. The final price shall not exceed 20% of the tentative allotment price indicated at the time of allotment.
• KSSIDC will develop infrastructure facilities & allot industrial plots/shed year wise and the final price for such plots shall be fixed for the first year allottees in the third year, second year allottees in the fourth year and so on. Such final prices shall be based on the infrastructure facilities provided during the period and the final price for the area shall be based on overall infrastructure costs.
• KSSIDC may make provisions for increase of allotment price year on year basis based on the costs incurred. The allotment rate may vary based on the year of allotment. However, the final price shall not exceed 20% of the tentative allotment price indicated at the time of allotment.
• The land prices will also be displayed on the website, along with other information. The land / shed price will have validity for a specified time-period, and will get revised periodically.
• Further, KSSIDC will work towards developing a system where in the final pricing will be given at the time of land / shed allotment.

Labour

Robust economic growth and quality job creation are intertwined goals that can only be achieved through coherent and mutually-reinforcing strategies that improve employment opportunities and outcomes for the working-age population. Skill development and enhancement will be other focus areas for meeting the dynamic requirements of the industry.

a. Regulatory Reforms

With an ambition to transform Karnataka into a more competitive, high-growth, high productivity industrial State, Government will introduce comprehensive labour reforms that will work on the principle of providing for a single registration, single license and single return for an establishment. Some of the implemented and proposed reforms include:

• Multiple Shifts for Women
• Liberal Working Hours
• Fixed Term Employment (FTE) / Contract Employment
• Minimum Wages Stabilization
• Exemption to Special Economic Zones (SEZs)
• Proposed Procedural Reforms

b. Skill Development

Skills and knowledge are the driving forces of economic growth and social development for any economy. With 55 per cent of the population in the working age group of 20 to 59 years, Karnataka has an opportunity of achieving faster economic growth through favourable demographic dividend by promoting skill development of the working population.