FKCCI seeks land reservations and separate MSME policy in Karnataka Budget

Bengaluru: Investment revival, infrastructure development, and a separate policy for micro, small and medium enterprises (MSMEs) were prominent points in the pre-state budget memorandum 2025-26 by the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), submitted on Friday.

On the need for a separate MSME policy, they highlighted, “Micro units, which make up nearly 99 per cent of MSMEs, have a turnover of less than Rs 5 crore. This significant difference sets them apart from medium enterprises, which have a turnover up to Rs 250 crore and thus, they should not be categorised together.”

They further asked for a state-specific procurement policy for sourcing products and services from MSME enterprises located in Karnataka by state government departments, similar to the Central Government’s policy.

Coming to industrial infrastructure, the demand was for allotment of land for plastic parks with recycling units, which was accepted by the Karnataka Industrial Areas Development Board (KIADB) earlier. Plastic recycling industries on the whole require a boost, as per FKCCI.

Continuing on the challenges in land acquisition, the group asked for reforms in KIADB and the Karnataka State Small Industries Development Corporation (KSSIDC). They said, “The price of land in KIADB Industrial Areas is beyond the reach of SME entrepreneurs and it is difficult to procure loans from banks.”

The body added, "KIADB should reserve 30 per cent of the land allotment for micro and small industries and 80 per cent for large industrial units in the allotment of industrial areas."

Further interest subsidies were also sought, along with an exemption of 9 per cent electricity tax for industrial consumers, particularly MSMEs.

There were also asks for further lowering the Agricultural Produce Market Committee (APMC) cess from the existing 0.6 per cent, as well as modernising APMC Yard with improved infrastructure.

The body highlighted the high number of compliances burdening industrialists. As per their statement, “Many of these compliances to be met periodically are out of date and redundant. The present need requires changes by removing the redundant compliances and simplifying them to suit the present industrial reality.”