‘NIP 2021-25 Speeds up the Journey towards a Prosperous Karnataka’

Posted By : Editor

Through the New Industrial Policy, Karnataka provides a unique and complete package to meet all requirements of Large, Medium, and Ultra & Super-Mega Enterprises. It helps the state to continue to be the preferred destination for OEMs looking for high-quality intermediate products equipped with the latest technology. Jagadish Shettar, Minister for Large and Medium Scale Industries, said that concerted efforts were made in the policy to ensure Karnataka remains the most attractive destination for investment and the policy will develop Karnataka's industrial landscape in a holistic manner and ensure well-balanced, sustainable, and inclusive industrial development throughout the state. “The new policy focuses to utilize Karnataka's industrial infrastructure, create an investment enabling environment, and provide equitable opportunities for the people of the State. The vision of the industrial policy is to make sure Karnataka emerges as a global industry leader in priority sectors such as Advanced Manufacturing, Research & Development, and Innovation, there by flagging off the journey towards a prosperous Karnataka,” he said.

Banking on the immense opportunities for growth and innovation in the industrial sector of Karnataka, the state government has launched the New Industrial Policy 2020-25 to give a big boost to the ongoing industrial development in the state. Jagadish Shettar, Minister for Large and Medium Scale Industries, said that the policy continues to keep the investor-centric approach, to build a prosperous Karnataka and create large-scale employment opportunities. Committed to bringing ease to regulatory compliance for businesses, the government has started an ambitious program for reforms in partnership with departments and various stakeholders to make it easier, simpler and quicker for businesses to start and operate in the state. And he said that policy has set the balls rolling towards a prosperous Karnataka.

The minister said that the policy has recognized thrust areas to create an ecosystem for an inclusive and sustainable development trajectory in the state and aims to boost large and medium scale industries by introducing various incentives across sectors. “We aim to provide infrastructure & credit access, skill development training, and necessary technical support for industries all over the State. For the first time in India, Karnataka has adopted a turnover based incentive system to ensure balanced industrial development of the State. The objective is to attract investments worth Rs. 5 lakh crore and to create employment opportunities for 20 Lakh people in the next five years,” he said.

He said that Karnataka government comes out with industrial policies at regular intervals of five years to ensure a well-balanced inclusive and sustainable industrial development. Ever since the last industrial policy was brought out in 2014, many changes have happened and new opportunities and focus have emerged, especially in manufacturing industry. The new policy will focus on the development of key sectors such as Automobiles & Auto components, Pharmaceutical & Medical Devices, Engineering and Machine Tools Knowledge-based industries, Logistics, Renewable Energy, Aerospace & Defence, and Electric Vehicles.

“The focus of the new policy is to exploit Karnataka's industrial potential and create and enable an environment develop infrastructure for the entrepreneurs especially in industrially backward districts, tier-2and tier-3 cities, thereby ensuring an inclusive development of investment. By provide an enabling ecosystem for technology adoption and innovation, we aim to the holistic development of the state and look beyond Bengaluru to tier 2 and 3 cities and as engines of economic growth. The vision of the policy is to help the state emerge as a global leader in advanced manufacturing research and development and innovation and create an ecosystem for inclusive, balanced and sustainable development of the state. The objective is to maintain an industrial growth rate of 10% per annum,” he said.

Sector-Specific Growth Boosters

Based on the competitive skills and growth potential of various sectors in the state, the policy has identified specific focus sectors - automobiles, auto components, pharmaceuticals and medical devices, engineering and machine tools, knowledge-based industries, logistics, renewable energy, aerospace and defence and electric vehicles. The aim is to emerge as globally competitive market that leverage hi-tech growth in these sectors by putting immense thrust on each of them. The policy also gives a major fillip to research and development, intellectual property rights, technology adoption and innovation, cluster development initiatives and sustainable industrialization.

“Under the new policy the government will support training and skill-building programs to bridge the gap between traditional manufacturing and innovative technologies in addition to modernizing those sectors that are eligible for subsidy in the state. Main focus is on key sectors such as automotive and spare parts, pharmaceuticals, logistical renewable energy, aerospace and defence and medical equipment. The key aspect of the policy is to secure a remarkable position for Karnataka in global manufacturing sector,” he added.

Shettar said that the policy will provide incentives for the establishment and exponential diversification of new industries. Ultra, Super and Mega industries will be offered special packages. Discounts, will be given to investment, direct and indirect job creation industries will be encouraged to adopt and use new technologies for local needs. There will be economic incentives for manufacturing industry for water harvesting in the premises of the companies and encourage companies to improve pollution mitigation and waste management in manufacturing sector.

“The state has taken several steps to revive the economy braving the challenges posed by the Covid-19 pandemic and that is the main reason for Karnataka to continue as the most favourable destination for investors. After the central government announced relaxations following the lifting of lockdown, Karnataka was the first state to resume the activities in industrial sectors. Besides large industries, MSME too got back to the path of growth immediately,” he said.

Investments Thrive despite Pandemic Effect

Due to the various industrial-friendly activities by the state government, Karnataka received a lot of investment proposals as recognition of the growth prospects here. Investment proposals worth Rs. 1.57 lakh crores were registered in Karnataka while the total investment proposals received in India was worth Rs 3.76 lakh crores. It is almost 45% contributed by the state. Between August 2019 and December 2020, the State High Level Committee and State High Level Single Window Clearance Committee have approved 410 new projects worth an investment of Rs.77490 crores.

“The policy has also grouped districts into three zones to incentivize investments in the industrially backward districts. The industrially backward districts are classified in Zone-1 & 2, and Bengaluru Urban and Rural districts are classified in Zone-3. All new industrial investment projects shall create maximum possible direct employment opportunities with a minimum employment of 70% to Kannadigas on an overall basis and 100% in case of Group C and D employees,” he said.

Tumkur Set to Become Industrial Hub

In order to make Karnataka a strong player in the global value chain in the South India, the central government has cleared Rs.1701 crore worth Tumkur Industrial Corridor project with an estimate employment generation of 88500, out of which 17,700 persons will be from service industries such as retail, offices and other commercial opportunities in the initial development phase. Laws have been amended simplified for land purchase and the option to convert agricultural land for non-agricultural purposes can be chosen through online windows now for receiving approval within 30 days.

The Greenfield industrial city will be self-sustained with world-class infrastructure, road and rail connectivity for freight movement to and from ports and logistic hubs along with reliable power and quality social infrastructure. Tumkur will soon be a major industrial hub in South India.

“The government will support the creation of clusters for the rapid growth of industries. Karnataka was the first state to create sector-specific clusters to attract capital investment and the examples are toy, textile and wellness clusters,” he said.