With the aim to emerge as a global leader in manufacturing, innovation, research, and development, the State Cabinet on Thursday approved the New Industrial Policy 2020-25, offering a series of incentives to industries to invest in Karnataka, including turnover-based incentives for the first time in the country.
It also proposes to attract investments outside Bengaluru by declaring backward regions as “Special Industrial Regions” (SIRs). Among those proposed include encouragement to establish private industrial parks and declaration of industrial townships.
While the policy seeks to maintain the 10% industrial growth year on year, it has set an ambitious target of ₹5 lakh-crore investments to create employment opportunity for 20 lakh people. It aims to make the State the third largest exporter of merchandise from the current fourth place. The focus of industrial policy will be on automobile and auto component, defence, electric vehicles, pharmaceuticals and medical devices, engineering and machine tools, knowledge-based industries, logistics, and renewable energy, Industries Minister Jagadish Shettar told presspersons in the post-cabinet briefing.
“For the first time in the country, Karnataka will adopt a production turnover-based incentive instead of tax-based incentives to encourage production-based performance,” he added.
The last industrial policy had been unveiled in 2014.
Beyond Bengaluru
While the bulk of industrialisation has happened in and around Bengaluru that has been classified as Zone 3, the policy has classified backward taluks and districts as Zone 1 and Zone 2. Subsidies and facilities have been extended to industries investing in Tier 2 and Tier 3 regions of the State. A sub-committee under the chairmanship of the Chief Minister that looks into taxes and concessions to the industries has been tasked to identify industrially-backward taluks and bring them in Zone 1 category.
The first proposed SIR will be declared in Dharwad and the region around it, Mr. Shettar said, adding that similar SIRs will be declared in Shivamogga and Kalaburagi.
On the lines of Bengaluru-Chennai and Bengaluru-Mumbai industrial corridor, the State will develop Bidar-Mysuru as an industrial corridor. “It was felt that though the Bidar-Mysuru corridor exists, there is no railway connectivity. The State will seek the Centre’s help for this,” Mr. Shettar said, adding that the State would adopt technology and innovation.
He said that several measures, including Karnataka Industries Facilitation Act and removal of restrictions on land purchases, have already been put in place.
