New industrial policy eyes Rs 5 lakh crore investments

The Cabinet on Thursday approved the state’s new industrial policy that aims to generate Rs 5 lakh crore investment over the next five years and create 20 lakh jobs by offering a slew of incentives.

All new investment projects, as per the policy, shall create direct employment opportunities “with a minimum employment of 70% to Kannadigas on an overall basis and 100% in case of Group D employees”.

Special Investment Regions (SIR) were also announced, with Dharwad SIR — encompassing Gadag, Haveri and Belagavi districts — being the first.

“Probably for the first time in India, we have decided to offer investment promotion subsidy to medium, mega and large enterprises ranging from 1.75% to 2.5% on turnover in each year for a period of 5-10 years,” Industries Minister Jagadish Shettar said.

The subsidy will be in the form of a grant and will be based on the company turnover.

The subsidy will be limited to 35-60% of the Value of Fixed Assets (VFA) of an enterprise. MSMEs, too, will be eligible for an investment promotion subsidy of 10% of their annual turnover for a period of five years and limited to 20-30% of VFA.

Shettar said that SIRs will be notified as areas with more than 100 sqkm and deemed industrial townships. While the first will be at Dharwad, another will be notified for Shivamogga, which will also cover Davanagere, Chitradurga and Chikmagalur districts.

The policy will allow development of private industrial parks in the state, he said, noting that such parks were functional in Tamil Nadu district.

Apart from amending labour laws to facilitate industries, restrictions on the purchase of agricultural land has been lifted by amending the Land Reforms Act.

“This will facilitate industrialists to purchase land and start industries,” he said.

The Karnataka Industries Facilitation Act is also amended to ensure ‘ease of business’, and will allow investors to start work on their projects as soon as district-level committees clear them, he said. The policy has identified automobiles and auto components, pharmaceuticals and medical devices, engineering and machine tools, knowledge-based industries, renewable energy, electric vehicles, and aerospace and defence as focus sectors. Industry 4.0, research and development, intellectual property rights and others will be thrust areas of the policy.