Ease of doing business: Karnataka simplifies procedure for new businesses in state

Industrialists wanting to set up their ventures in Karnataka can henceforth do it at the click of a button. For, the state government has decided to allow industries to commence operations as soon as they get the basic approval from the concerned committee either at the district or the state-level, without having to wait for multiple clearances.

A decision to this effect was taken in the state cabinet meeting on Thursday.

According to Minister for Large and Medium Scale Industries Jagadish Shettar, the state government will pave way for the same by amending the Karnataka Industrial Facilitation Act (2002).

“This is a historic decision. We wanted to ensure ease of doing business and hence, the amendment. Karnataka will be the third state after Gujarat and Rajasthan to set up this model for the clearance of applications. Even in these states, it is applicable only to small and medium scale industries. Our amendment will be applicable to all industries,” the minister said. The government will amend the Act through an ordinance, he added.

How will the new procedure work? An entrepreneur will simply apply online on the ebiz Karnataka portal, by filing an investor memorandum. From there, the application will undergo scrutiny through the land audit committee after which it will be scrutinised by either the district or the state-level committee. For investment below Rs 15 crore, the permission will be given by the district-level committee concerned.

For project between Rs 15 crores and Rs 500 crores, the State-level Single Window Clearance Committee (SSWCC) chaired by the minister concerned, will process the application. For those above Rs 500 crores, the State High-Level Clearance Committee (SHLCC) chaired by the Chief Minister himself, will look into the application.

With the amendment to the legislation, once an investor gets the acknowledgment of approval from any of these committees, they can start the operations without waiting for clearance from other departments, for instance, the Karnataka State Pollution Control Board, officials in the industries department explained.

However, the clearances from all other departments will still be mandatory. “Within three years, the industrial establishment had to show productivity after getting other clearances. Failing this, the approval will cease to be valid,” emphasised Law Minister JC Madhuswamy.