Have a successful business? Buy our land, says Karnataka govt

Karnataka Industries Minister Murugesh Nirani said Saturday that a new policy will allow state-owned land to be sold to industrial units that run well for two years, a move the government hopes will increase the flow of investments.

The government is working on a 10-year lease-cum-sale system for Karnataka Industrial Areas Development Board (KIADB) land allotted to industries.

“If any industrial unit successfully runs for two years soon after the land allotment, it will qualify to get the clear sale deed title from the KIADB without waiting for ten long years,” Nirani said in a statement, adding that balance sheets over 24 months will be verified to see if the unit’s business was good.

“Rules are being framed for the new scheme and a government order is expected to be issued in a couple of weeks,” he said.

At present, only land measuring over two acres is given to industries on a 99-year lease. “There is no provision for sale of the allotted land,” Nirani said, adding that several major private companies are reluctant to set up industries because of this clause.

“This clause is posing difficulties for the industries to obtain loan and capital inflow from banks and financial institutions, and mortgage the leased land. This hampered the flow of investments into the state,” he explained.

Going forward, KIADB will allot lands to private industries or institutions on a 10-year lease-cum-sale basis, he said. This will require amendments to the Karnataka Industrial Areas Development Act, which Nirani said the Cabinet has cleared.

“According to KIADB rules, MSMEs have to set up and start production within three years from the date of allotment of land. For large and medium industries, the time frame is five years,” Nirani pointed out. “The amendment will encourage industries to expand further as the allotted land will be theirs if they run operations successfully,” he said.

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