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Karnataka Industrial

Policy 2014-19
(Final Draft)

Industrial Policy 2014-19 Final Draft

Contents
1.

Introduction ................................................................................................... 4

2.

Vision ........................................................................................................... 10

3.

Mission ......................................................................................................... 10

4.

Strategies ..................................................................................................... 10

5.

Policy Measures............................................................................................. 11
5.1.

Comprehrensive Infrastructure Development ........................................................................................ 11

5.2.

Human Resource Development........................................................................................................... 16

5.3.

Investors Facilitation..20

5.4.

MSME Development......................................................................................................................... 22

5.5.

Sustainable Industrial Growth Technology Transfer and Upgradation Support ............................................ 25

5.6.

Regional Balanced Growth ................................................................................................................ 27

5.7.

Special focus on promotion of manufacturing industries.......................................................................... 28

5.8.

Special thrust for encouraging SC/ST, Women, Minority, PH and Ex-Servicemen entrepreneurs ..................... 34

5.9.

Support for promotion of Khadi, Artisan and Coir sector .......................................................................... 34

5.10.

Special Thrust for encouraging Industrial Development in Hyderabad- Karnataka Area..................................35

5.11.

Attractive Standard & Specail package of incentives and concessions........................................................ 35

5.12.

Smooth exit, revival and relocation policy............................................................................................. 35

6. Milestones / Review / Monitoring ..................................................................... 36


7.

Budgetary provision ....................................................................................... 38

8. Expected benefits to the State ........................................................................ 42


9. Implementation mechanism .......................................................................... 43
10. Annexure 1 Classification of Taluks................................................................ 44
11. Annexure 2 ...................................................................................................49
11.1.

Attractive Standard & Specail package of incentives and concessions....................................................... .49

12. Annexure 3 .................................................................................................. .58


12.1.

List of Service Enterprises eligible for package of Incentives and Concession ............................................... 58

13. Annexure 4 ................................................................................................... 59


13.1.

List of Industrial Activities / Enterprises not eligible for Incentives and Concessions ...................................... 59

14. Annexure 5 ................................................................................................... 61


14.1.

Definitions and Terms &Conditions ..................................................................................................... 61

15. Annexure 6 ...................................................................................................66


15.1.

Important contacts .......................................................................................................................... 66

Industrial Policy 2014-19 Final Draft

Introduction
India Economic outlook
The Planning Commission has set an average GDP growth target of 8% for the 12th Plan. The sector-wise
average GDP growth targets for Agriculture, Industry and Services are 4%, 7.6% and 9% respectively. To register
significant economic growth, revival of investment in industry and key infrastructure sectors is very important.The
growth in Gross Domestic Product (GDP) at factor cost at constant (2004-05 prices) is estimated (provisional
estimate) at 5.0% in 2012-13 with agriculture, industry and services registering growth rates of 1.9%, 2.1% and
7.1% respectively. Also, it is crucial to accelerate the output of core sectors and speed up implementation of crucial
big ticket projects, while laying emphasis on research and development and adequate availability of skilled
manpower to improve India's competitiveness in the manufacturing sector.

Foreign Direct Investment (FDI) Scenario


India witnessed cumulative FDI inflows of INR 19,266 billion (USD 3,09,012 million) from April 2000 to October
2013 as per Department of Industrial Policy and Promotion (DIPP) data. FDI inflows received during financial year
2013-14 (from April, 2013 to October, 2013) were INR 1,177.74 billion (USD 18, 934 million). During 2012-13, India
attracted FDI worth INR 1394.64 billion (USD 22.42 billion) with hotels, tourism, pharmaceuticals, services,
chemicals and construction receiving higher investment. The major contributors to the Indian FDI are made by US,
Japan, UK, UAE and Germany.
From 2007 to 2012, India received a total of 4981 FDI projects with a total investment of INR 20278.88 billion (USD
$326 billion) and generated 1.4 million jobs making India the fourth largest recipient of FDI in the world and
second largest in the developing countries. The government opened gates to foreign investors in 13 sectors
including petrol and natural gas, insurance, tea plantation, courier, credit information firms, defence production
industries etc. It liberalized FDI regime allowing 100% FDI in Telecom sector, Power and 51% FDI in multi brand
retail sector and 100% in retail single brand. This liberalized FDI policy which is termed as second wave in
economic reforms could lead to continuous upsurge in FDI and bring in much needed foreign investments to the
country.

Imports and Exports


The opening up of the Indian economy has greatly increased the role of trade. In the Eleventh Plan, the total share
of merchandise exports and imports as a proportion of GDP rose from 36.4 per cent to 45.6 per cent.

Important Legislations and programmes of Government of India


o

National Competitiveness Programme was announced in 2005 with an objective to support the
Small and Medium Enterprises (SMEs) in their endeavor to become competitive and adjust to
the competitive pressure caused by liberalization and moderation of tariff rates. Some of the
schemes introduced as a part of the programme include:

Industrial Policy 2014-19 Final Draft

Marketing Support/Assistance to MSMEs(Bar Code)

Support for Entrepreneurial and Managerial Development of SMEs through Incubators

Enabling Manufacturing Sector to be competitive through Quality Management Standard &


Quality Tech. Tools (QMS/QTT)

Building Awareness on Intellectual Property Rights (IPR) for MSME

Lean Manufacturing Competitiveness Scheme for MSMEs

Design Clinic Scheme for design expertise to MSMEs Manufacturing sector (DESIGN)

Marketing Assistance & Technology Up-gradation Scheme in MSMEs.

Technology and Quality Upgradation Support to MSMEs

MSMED Act 2006, was introduced to provide for facilitating promotion, development and enhancing
competitiveness of micro, small and medium enterprises.

Automotive Mission Plan 2006-16 was introduced with a vision to increase the output of the sector to INR
9019.75 billion (USD 145 billion) and create additional employment for 25 million persons by 2016.

In 2011, the Government of India announced a National Manufacturing Policy with the objective of
enhancing the share of manufacturing in GDP to 25% within a decade and creating 100 million jobs.

The Ministry of Food Processing Industries launched a Centrally Sponsored Scheme - National Mission on
Food Processing (NMFP) during 12th Plan. The NMFP contemplates establishment of National Mission as
well as corresponding Missions in the state and District level to promote food processing sector across
India.

Indias National Action Plan on Climate Change, launched in 2008, establishes eight National Missions.
Among these are the National Solar Mission with the aim of generating 20 gigawatts of solar power by
2022; the National Mission for Enhanced Energy Efficiency; and the National Water Mission, which aims
to increase water use efficiency by 20 percent, among other goals.

Companies Bill, 2011: It aims to enhance transparency in company operations, improve corporate
governance and strengthen regulation for corporates and auditing firms. It also makes it mandatory for
profit- making companies to spend two percent of their profit for community welfare as per CSR.

Land acquisition Act 2013 has been approved and will replace the Land acquisition Act of 1894.

Science, Technology and Innovation Policy (STI), 2013 emphasises on innovation and setting up research
facility with an aspiration to place India among the top five scientific powers in the world by 2020. The
Policy targets increase in gross expenditure in R&D to 2 per cent of Gross Domestic Product from the
current 1 per cent in this decade by supporting increased private sector participation.

Industrial Policy 2014-19 Final Draft

Karnataka
Today, Karnataka is home to
6.11 crore people (2011 Census)

20

and accounts for 5.05% (5.14%

17.1

15

12.2

in 2012) of India's population.


The

State's

population

10

has

9.7
8.4

10.8
9.2

9.7
5.1

grown by 15.7% during the last

9.2
8.3
3.5

4.4
2.4

decade, while its population

2.4
2.1

-1.5
0

density has risen from 276

2005-06

persons per sq. km in 2001 to 319

2006-07

2007-08

-5

2008-09

Karnataka

2009-10

2010-11

2011-12

2012-13

India

in 2011, indicating an increase of


about

15.6%

during

the Figure 1: Karnataka's Growth Rate of GSDP/GPD in Industry Sector

corresponding period.

(Source: Economic Survey of Karnataka, Planning Commission)

Karnatakas industrial growth between FY 2005-06 and FY 2011-12 was 7.39% as against Indias 7.93%.
Karnataka GSDP has grown at 5.9% to reach INR 3, 03,444 crore in 2012-13 (constant price) against Indias 5%.
Bangalore has been at the fore front of attracting both domestic and foreign investments. The state has been able
to attract considerable amount of FDI across various sectors. Between April 2000 and October 2013, Karnataka
received FDI to the tune of INR 54,508 crores. From 2009-10 to 2013-14, the State High Level Clearance
Committee (SHLCC) cleared 484 projects worth INR 671460.21 crores with employment potential for 22, 72,064
persons. In the same period, State Level Single Window Clearance Committee cleared 2041 projects worth INR
31794.25 crores with employment potential for 466640 persons. Karnatakas export of INR 2, 58,368.53 crore
during the period 2012-13 constitutes 12.69% of all India exports. Karnatakas share in national exports for
electronics and software constitute about 38% and for product exports constitute 6.3%. Share of electronics and
software in state exports stands at 60% for the period 2012-13.
In the 11th Five Year plan, the economy could not grow at the pace as planned due to global slowdown witnessed
since the beginning of 2008, uncertain and challenging macroeconomic situation globally and nationally, and the
widespread drought situation in the State. However, the Government of Karnataka is determined and poised to
accelerate the process of its economic growth so as to achieve its vision of an inclusively developed State. It
undertook several initiatives to maintain the growth of the state economy and came out with numerous policies to
support sector and industrial growth. Some of the policies released by the state include:

Industrial Policy 2014-19 Final Draft

SN

1.

2.

3.

4.

5.

Policy

Department

Karnataka Tourism policy

Department

, 2009- 14

Government of Karnataka

policyeng.pdf

Renewable energy policy-

Department

http://www.gokenergy.gov.in/govt_on.htm

2009-14

Government of Karnataka

Solar policy, 2011- 16

Department

http://www.gokenergy.gov.in/documents/S

Tourism,

of

of

Energy,

Energy,

http://karnatakatourism.org/policy/tourism

olar%20Policy%20English.pdf

Karnataka State policy

Department of Industries and

http://karnatakaindustry.gov.in/documents

for

Commerce,

/StatePolicyforSpecialEconomicZones2009

special

economic

Government

of

zones 2009

Karnataka

withAmendments.pdf

Karnataka and aerospace

Department of Industries and

http://www.karnatakaindustry.gov.in/Old-

policy 2012

Commerce,

document/AerospacePolicy%20_CII_%201

policy

2010

Government of

Karnataka

_6.pdf

Department of IT /BT and

http://kumappsonline.com/newsletter/imag

Science

es/jan2013/downloads/semiconductor%20

&

Technology,

Government of Karnataka

brochure.pdf

Department of IT /BT and

http://www.bangaloreitbt.in/docs/2012/09/

Communication

Science

Informanton&CommunicationsTechnology

technology policy 2011

Government of Karnataka

Policy.pdf

Millennium biotech policy

Department of IT /BT and

http://www.bangaloreitbt.in/docs/2012/09/

Science

Biotech_Policy_II.pdf

Information
7.

of

Government of Karnataka

Semiconductor
6.

Source/Link

and

8.

&

&

Technology,

Technology,

Government of Karnataka
Karnataka
9.

10.

animation,

Department of IT /BT and

http://www.bangaloreitbt.in/docs/2012/09/

visual effects, gaming

Science

KAVG%20Policy.pdf

and comics policy 2012

Government of Karnataka

I4 ( IT, ITES, Innovation,

Department of Information

http://www.bangaloreite.biz/IT_2013/pdf/K

Incentives ) policy

Technology,

arnataka-i4-Policy.pdf

&

Technology,

Biotechnology

and Science & Technology,


Government of Karnataka

Industrial Policy 2014-19 Final Draft

SN

11.

Policy

Department

Integrated Agri- business

Department

development policy 2011

Government of Karnataka

ntegrated-AgriBusiness2-RN-8pm.pdf

Karnataka

Health and Family Welfare

http://www.advantagekarnataka.com/ima

Department, Government of

ges/sector-

Karnataka

profiles/Biotechnology&Pharmaceutical.pd

Pharmaceutical

12.

policy

2012

Source/Link
of

Agriculture,

http://www.karnataka.gov.in/Documents/I

13.

New textiles policy 2013-

Department

of

Handlooms

http://www.karnatakaindustry.gov.in/docu

18

and Textiles, Government of

ments/SUVARNA%20VASTRA%20NEETHI

Karnataka

-2008-13.pdf

Impact of 2009-14 Industrial Policy

As against the targeted Investment of INR 3.00 lakhs Crores and employment generation for 10.00 lakh
people, around 1200 large enterprise proposals were approved during the policy period , with an investment of
INR6,95,000 crores and employment generation for 25,86,000 people. Out of which few have already
implemented and many of them are under various stages of implementation. Besides, 101366 MSMEs have
been established with an investment of INR8400 crores and employment generation for 6,40,000 people.

Land bank concept has been established and through which Government has initiated action for
acquisition of 1,15,000 acres and out of which 31,000 acres of land is finally notified for development.

Action has been has initiated for supply of tertiary treated water to augment the water scarcity and to
adopt water conservation measures.

Action has been initiated for establishment of Sector specific parks namely, Pharma, Aerospace, Spice,
Jewelry, IT/BT, ITIR, Hardware Park, Food, Textile, Apparel, etc.

For effective maintenance of the industrial area, a separate industrial township is constituted for
Electronic City in Bangalore District, as a pilot project.

Industries facilitation act 2002 is amended to facilitate Single Window Mechanism to work more
effectively with more powers, particularly at District levels.

Online application filing system is introduced to facilitate the new investors to file their applications for
project clearance, across the World

KaigarikaAdalats at Divisional and District level have been conducted to sort out the various issues of
Industries.

Global Investors Meet 2010 & 2012 have been conducted successfully to showcase the investment
opportunities existing in the state to domestic and international investors and mobilize investments .

Industrial Policy 2014-19 Final Draft

In order to provide required trained man power to the industries various Skill Development Training
Programmes were conducted

More than 4000 MSMEs are extended with various incentives and concessions to an extent of more than
INR 250 Crores.

State Govt. has established 13 Skill Development Training Centres in association with Private Institutions
under PPP Module.

6 services are considered under SAKALA Act for timely disposal.

Now, the state intends to consolidate the strategies and achievements made so far by intensifying governance
reforms, ensuring effective targeting of subsidies and better monitoring, and instituting a process of informed
decision making through independent evaluation.
One such key initiative is the formulation of a new Industrial Policy 2014-19 that will encourage investors and
entrepreneurs to develop market, bring in technology and provide employment opportunities and spread
industrialization and development to the most backward areas of the state. In this policy, the government has
envisioned undertaking a holistic approach towards promotion of industrial development in the State through
development of human & natural resources, creation of new employment opportunities, increasing share of
industry in the State GDP, development of MSME sector and promotion of skill development and
entrepreneurship.
Apart from the providing special incentives to the industry, Government of Karnataka is also committed to
providing right infrastructure and business environment. Ensuring availability of quality Land, Water, Power and
Labour is the top priority of the state.

Industrial Policy 2014-19 Final Draft

2. Vision
To make Karnataka the most preferred investment destination through inclusive, sustainable and balanced
growth.

3. Mission

To establish Brand Karnataka in the global market

To take Karnataka among the top 3 investment destinations in the country

To enhance the contribution of manufacturing sector to the State GDP to 20% by end of policy period.

To attract minimum investment of INR 5 Lakh crores

To create additional employment for 15 lakhs persons by 2019

4. Strategies
4.1.

Comprehensive Infrastructure Development programmes

4.2.

Thrust for Human Resource Development

4.3.

Better Investors Facilitation mechanism

4.4.

Priority for MSMEs Development

4.5.

Importance for export promotion

4.6.

Quality improvement

4.7.

Sustainable Industrial Growth, Technology Transfer and Upgradation Support

4.8.

Thrust for Regional Balanced growth

4.9.

Special focus on promotion of manufacturing sectors

4.10.

Special thrust for encouraging SC/ST, PH, Ex-Servicemen, and Women entrepreneurs

4.11.

Support for promotion of Khadi& Village industry, Artisan and Coir Sector

4.12.

Attractive package of incentives and concessions

Industrial Policy 2014-19 Final Draft

10

5. Policy Measures
Infrastructure Development with special focus on promotion of

5.1.

private industrial estates


5.1.1.

Development of Integrated infrastructure for industrial development


a. To promote new state industrial corridors and industrial areas in and around National
Investment and Manufacturing Zones (NIMZ)and proposed Industrial Corridors
Government of Indias (GoIs) National Manufacturing Policy (NMP) 2011 proposes development of
NMIZs across the country, where in NIMZs would be large areas of developed land, with the requisite
eco-system for promoting world class manufacturing activity. They would be different from SEZs in
terms of size, level of infrastructure planning, and governance structures related to regulatory
procedures and exit policies.
To enable the NIMZ to function as a self-governing and autonomous body, it will be developed as an
integrated industrial townships with state-of-the art infrastructure and land use plan on the basis of
zoning, clean and energy efficient technology, necessary social infrastructure and skill development
facilities, etc.
NIMZs would be managed by Special Purpose Vehicles (SPVs) which would ensure master planning of
the Zone; pre-clearances for setting up the industrial units to be located within the zone and
undertake such other functions as specified in the various sections of the NMP.
The State Government of Karnataka has proposed to establish National Investment and
Manufacturing Zones (NIMZ) in the state at Tumkur, Bidar, Gulbarga andKolar.
b. Establishment of Knowledge City Corridor
Development of a knowledge city corridor between Bangalore and Mysore to promote knowledge
based and knowledge intensive industries will be proposed.
c.

State Government has proposed to establish two industrial corridors in the state with the support of
Government of India, viz. Chennai Bangalore Chitradurga Industrial corridor and Bangalore
Mumbai Economic corridor. The corridors will have separate industrial nodes for industrial
investments.
State will also explore option for setting up of State industrial corridors along:
i.

Bangalore Hassan Mangalore Udupi Karwar

ii.

Bangalore Mandya Mysore Chamarajnagar

Industrial Policy 2014-19 Final Draft

11

iii.

Bellary - Hubli - Goa

iv.

Chitradurga Koppal Raichur Gulbarga Bidar

Efforts will be made to encourage development and alignment of new industrial areas/ estates along
the NMIZs and industrial corridors and manufacturing units.
d. To create full-fledged sector specific industrial zones where investors can set up industries on
plug and play basis
A new policy for industrial area/ estate development will be explored where the State would look at
creating Special Investment Zones for focus sectors. Efforts will be made to establish these
investment zones in all districts and will be managed by a single SPV. All regulatory and statutory
approvals for the development of the investment zone and for establishment of industry in these
investment zones would be taken by the SPV.
It is proposed to set up one such sector specific industrial zone in each revenue division, during the
policy period.

5.1.2.
a)

Promotion of Private Industrial Estates/Parks


To create quality and sustainable industrial infrastructure across the State through private
participation to build a vibrant Karnataka
The State Government has taken several initiatives to create quality infrastructure for industries
across the State. Specialised agencies like Karnataka Industrial Areas Development Board (KIADB)
and Karnataka State Small Industries Development Corporation (KSSIDC) have been playing key
roles in creating industrial infrastructure. Due to growth in industrialization, the demand for
industrial infrastructure has been increasing steadily in the recent years.
KIADB & KSSIDC are putting substantial efforts to meet the demand from new and existing investors
by way of developing new industrial areas and estates. In spite of this, the gap between demand and
supply still exists, creating setback for investors in establishing their projects in the State.
State Government has identified industrial infrastructure development as a priority and it is
envisaged to encourage private players in developing industrial infrastructure in the State to augment
the activities being carried out currently by KIADB and KSSIDC towards easing availability of land
required for industries.
.

b)

Land for Private Industrial Layouts / Parks


Land would be made available to the proponents for development of Private Industrial Layouts /
Parks by one of the following procedures:

Industrial Policy 2014-19 Final Draft

12

Permission to purchase lands from land owners for development of private industrial Estates / Parks
subject compliance with land use pattern in the approved Master Plan.
To utilize proponents own land for development of private industrial Estates/ Parks subject
compliance with land use pattern in the approved Master Plan.
Allotment of bulk land in areas acquired by KIADB / Government bodies to the Private investors /
developers for Industrial Layouts / Parks. Suitable sub-leasing arrangements along with flexible terms
& conditions would be specified.
Acquisition of private lands by the State Government on demand for development of Private
Industrial Layouts / Parks, where atleast 80% consent has been obtained by the proponent, through
Single Window Mechanism/ Empowered Committee. Such lands would be transferred / leased to the
Developer/ Co-developer on easy terms. The private Industrial Estates will be setup with the
minimum of 50 to 75 acres of land in the most potential talukas to expediate the development of
Small and Micro Sector

c)

Guidelines for land acquisition


Guidelines for land acquisition to be adopted as per The Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
Minimum Rehabilitation and Resettlement (R&R) entitlements and benefits to be evolved in
conjunction with KIADB Act and The Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013.

d)

Creation of comprehensive infrastructure


In order to create world-class infrastructural facilities, the Developer or Co-developer shall be insisted
to develop, construct and install all basic support infrastructure like road, bridge, power generation,
transmission and distribution, water supply, UGD system in the industrial estates / parks.
Private players need to create support services like gas distribution network, communication and data
network transmission, waste water treatment and solid waste management, warehouse etc., in the
industrial estates / parks.
Private Player will also be the operating agency for operating, managing and maintaining all the
infrastructure facilities, amenities and support services on pay and use basis.

e)

Focus on orderly development of infrastructure


Developer of a private industrial area shall focus on development of industrial estates / parks in an
orderly manner as per prevailing national / international best practices. Setting up of sector specific or

Industrial Policy 2014-19 Final Draft

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cluster specific industrial estates/ parks at potential locations will be encouraged. Also segregation of
plots will be mandatory to reflect separate earmarked area for highly polluting industries.
Note : Incentives and Concessions offered for formation of private industrial areas / estates are
as per Annexure -2 & 5 respectively.

5.1.3.

Up gradation and maintenance of existing industrial infrastructure


a. Introduction of Industrial townships.
State government shall take immediate steps to notify large industrial areas viz. Peenya, Mysore,
Bommasandra, Belgaum, Hubli, etc as Industrial townships under the Township Act.
A minimum of 5 townships is proposed to be establish with Necessary budgetary support after
notification
b. Upgradation of existing industrial areas :
A holistic scheme for enhancement of existing industrial areas wherever such industrial area is not
covered under the Township Act will be introduced. The scheme will propose to create a healthy
system of continuous grading, upgradation and marketing assistance with appropriate cost recovery
mechanism will be introduced. New industrial areas/ estates will also be graded as per the provisions
of proposed scheme.
The standard benchmarks for the grading of industrial areas and estates will be developed separately
and all industrial areas/ estates will be subject to third party audits for grading.
It is proposed to upgrade minimum 30 Industrial Areas per annum with a budgetary provision of INR
100 Crores per annum, for upgradation of pre-defined minimum critical infrastructure in existing
industrial areas/ estates based on category grades for upgrading to a higher category grade.
Government of India schemes for upgradation of existing industrial infrastructure such as Modified
Industrial Infrastructure UpgradationScheme(MIIUS), etc. will be explored and benefits will be
leveraged wherever applicable.
c.

Maintenance of industrial areas on PPP mode

KIADB may expand its scope of services to include effluent treatment plants, provision of power,
water and quality access roads for a select number of large industrial areas, on its own or in PPP
mode.
d. To develop world class support infrastructure for industries
KIADB will create an action plan to develop multi-floor industrial buildings in for industrialisation in
and around Bangalore, Mysore, Belgaum, Hubli-Dharwad, Bellary, Mangalore, and Udupi where land
is scarce and the cost of acquisition / development is very high.

Industrial Policy 2014-19 Final Draft

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e.

WATER:

To encourage supply of Secondary / Tertiary treated water to existing / proposed notified


industrial areas

Programme already proposed are as under :


o

60 MLD of water proposed for Devanahalli&Doddaballapura Industrial Areas.

50 MLD of water proposed for Kolar, Narasapura, Vemgal, Hoskote, Malur and
Mastenahalli Industrial Areas.

Programmes to be proposed during policy period are as under :


o

f.

Mysore, Mangalore, Dharwad, Tumkur, Belgaum, Gulbarga, etc.

POWER:

State Government has initiated various measures to augment the power shortage and expected to
attend self sufficient by 2017. Besides in order to encourage energy conservation measures and also
to generate and consume power through non-conventional energy sources, various incentives and
concessions are offered and listed in Annexure-2
Further, in order to make available the required land to private entrepreneurs for setting up power
generating units the procedure for purchase of Agricultural land or conversion for non-agricultural
purpose will be made easier.

5.1.4. Regulatory Reforms


a. Acquisition of land, creation of land bank for industrial development
It is proposed to create more land banks in the state for the development of manufacturing
sector and develop these lands on PPP module
Guidelines for land acquisition to be adopted as per The Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
Minimum Rehabilitation and Resettlement (R&R) entitlements and benefits to be evolved in
conjunction with KIADB Act and The Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013.
Efforts will be made to promote usage of waste, barren, karab, dry and single crop land for acquisition
of land for industrial purposes. This could be achieved by way of identifying minimum 500-1000 acres
of such land in each talukas under the Comprehensive Development Plan (CDP) of the talukas
Inventory of surplus and unused land available with PSUs, State Government, and suitable private
land will be made to create a ready to use GIS mapped Land Bank for industrial development. This
will enable the State to offer ready to use land to investors.
Industrial Policy 2014-19 Final Draft

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Suitable mechanism shall be adopted for effective utilisation of the land.by imposing penalties
and forfeitures for inaction by Promoters and delays in implementing the projects after land
allotment for more than 2 years.

FAR, will be increased from the present average levels of 1.0 to 3.0, specifically for plots in industrial
parks and average ground coverage will be increased from 45-50% to 70%. This will be applicable
both to existing and proposed projects. This measure would release significant amount of land in
existing industries and reduce the need to procure or provide more land for industry.
Necessary amendments will be proposed for Karnataka Land Reforms Act, to reduce the time taken in
according approval for purchase of land under Section 109 and also for converting agriculture land for
industrial purposes.
Karnataka Industrial Area Development Board (KIADB) and Karnataka State Town Planning Board
maintain different standard requirements for Floor Area Ratio (FAR) for industries. Floor Area Ratio
for industry projects will be standardised between the two departments to provide better facilitation
for investors.
Lands allotted for industrial purposes will not be allowed to be used for any other purpose other than
industrial purposes.

Facilitate purchase of land upto 25 to 30 acres without extensive regulatory procedures and
permit deemed conversion for such land within stiputated time. Necessary Amendments to
the Karnataka Land Reforms Act will be proposed.

5.2.

Human Resource Development

5.2.1.

Skill Development

a)

Focus on provision of skill development and upgradation


It is proposed to constitute a skill development and upgradationcommittee with members from
industry, academia and government. The sole responsibility of the committee will be to assist the
government in its efforts to align the curriculum of Industrial Training Institutes (ITIs), Polytechnics,
Government Tool Room & Training Centre (GT&TC), District Industrial Skill Training Centres(ATIs),
and other allied institutes with the requirements of Industries so as to create job ready employable
workforce.
Quality management programmes, soft skills training and entrepreneurship skills to be made an
integral part of skill development curriculum.

Industrial Policy 2014-19 Final Draft

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b)

Focus on trainers training programme


A trainers training programme will be designed in collaboration with industries and with assistance of
National Skill Development Corporation (NSDC) and other Skill Development Training Institutes
.These learning programmes will be funded by the state with assistance from Government of India
schemes to help trainers in skill development institutes to update themselves on latest technology
and industry standards.

c)

Revival and upgradation of Training Centres


State will also focus on revival of redundant and obsolete training institutes and strengthening of
existing apprenticeship programme. Artisan Training Institutes (ATI) in Karnataka, will be given due
support for upgradation through private participation by converting them into Skill Development
Training Centres, thereby training can be imparted in highly skilled and advance courses
A minimum budgetary support of INR50 lakhs for upgradation of infrastructure facilities for each
centre and 25 lakhs per annum as training cost per centre. It is proposed to revive atleast 3 ATIs per
annum.

d)

Utilisation of Private Infrastructural facilities for imparting training programmes


Provision will be made to allow private industries to collaborate with GT&TC and other allied
institutes to conduct training programmes for students andtrainers using their facility and
infrastructure, periodically, on new technologies in the market. Subsequently, industries conducting
such programmes may also be allowed to issue certificate equivalent to that issued by skill
development centres with prior approval of Department of Technical Education and Department of
Commerce and Industries and under pre-defined guidelines.
Such industries may be subsidised for the cost of training, certification and usage of private
infrastructure subject to provision of employment for 85% of trained students.

e)

On job training programme


Training for 10000 unemployed youths with a suitable provision of stipend per candidate as
Government contribution with equal matching contribution from employer will be provided.

f)

Promotion of Information and Communication Technology (ICT) :


Extensive use of Information & Communication Technology (ICT) will be promoted for learning in skill
development centres through upgradation of existing ICT infrastructure where available and provision
of new infrastructure in institutes where there is requirement.

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g)

Labour Market Information System (LMIS)


One of the priorities of the department in this policy term period will be to create a dedicated Labour
Market Information System (LMIS) to enable realistic assessment of economic trends and labour
market needs. This information system will be set up at both state and district levels to help in
planning for skill demand, supply and remuneration and other requirements.

h)

Provision of manpower requirement (with skill category and number) by industries at the time of
filing of application for single window approval and or for incentives under state policies will be
made mandatory.
Council for Vocational Education and Research/ or any other nodal agency will be appointed as nodal
agency for regional mapping of demand & supply of available and projected skilled labour. The nodal
agency will be responsible for aligning supply of skilled candidates from training institutes to skill
requirements of area specific industry and services clusters. Skill development centres will act as
support bodies of the nodal agency for conducting the regional mapping.

i)

Focus on institutional support and infrastructure development


An infrastructure gap assessment of skill development centres in the State will be conducted and a
task force will be created for development of new physical infrastructure for skill development and
upgradation , and existing institutes will be upgraded and expanded according to skill requirement of
specific sectors/ industries.
It will be mandatory for existing and new Industrial Areas in the state with more than 100 acres of
land to have a dedicated facility for skill development and training centres.
GT&TC will be set up in every district and the current GT&TC infrastructure and training programmes
to be strengthened through central government assistance and State government funding.
State will explore new avenues of partnership with private agencies for establishing skill development
and vocational training centres under PPP especially in rural and remote areas.
State shall explore options for utilization of existing education infrastructures in ITIs/ Colleges/
Schools for corporate sponsored skill upgradation trainings will be encouraged and optimum use of
existing physical infrastructure will be ensured in multiple shifts.

j)

Focus on equal access to skill development for all social groups.


Reservation in skill development centres will be provided for Scheduled Castes, Scheduled Tribes,
Persons with Disabilities, Ex-Servicemen and women to encourage participation.
Dedicated vocational training institutes will be created through public private participation, atleast
one in each revenue division, for women while adopting proactive measures that overcome barriers

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and facilitate participation of women for skill development and creation of employment ready women
workforce. Facilities such as hostel for women, scholarships, transport, training materials and loans,
will be made available for the students of the institute.

5.2.2.
a)

Entrepreneurship Development
Focus on fostering entrepreneurship through education
Centre for Entrepreneurship Development of Karnataka (CEDOK) to develop zone-wise sector-wise
modules for Entrepreneurship Development Programmes inclusive of industry visit and interaction to
enable entrepreneurs to focus on regional opportunities
Centre for Entrepreneurship Development of Karnataka (CEDOK) to introduce Entrepreneurship
Development Programmes for entrepreneurs and conduct them on a regular basis across districts.
Programmes for existing entrepreneurs could be in the area of Technology Up gradation, Product
Diversification, Quality Marks, National and International Strategies against W.T.O., International
Market and Export procedures.

b)

Linkage with GOI Schemes


Benefits and incentives under the Trade Related Entrepreneurship Assistance and Development
Scheme for Women (TREAD), Technology based and Skill based Entrepreneurship Development
Programmes sponsored by Ministry of Science and Technology, Government of India and Skill-cumEntrepreneurship Development Programme (ESDP) sponsored by Ministry of MSME, Government of
India will be dovetailed with state initiatives in entrepreneurship development by CEDOK. The
participants of these schemes will be provided with hands-on training in indigenous technologies
developed by R&D institutions that are available for commercial exploitation.

c)

Focus on setting up Entrepreneurship Incubation Centres


It is proposed to set up an Entrepreneurship Incubation Centre for manufacturing based industries and
for Research & Development with common facilities such as centralized reception, front office,
photocopying and printingfacilities, inters office and external communication facilities in all four
regions of the state. These four incubation centres will be developed by CEDOK/ TECSOK
independently, or in PPP and admission to occupy such facility will be based on merit and predefined
guidelines as outlined by the Department of Commerce & Industries from time to time.

d)

Focus on fostering entrepreneurship through information


Efforts will be made through guidance cells in each district to create entrepreneurship awareness
programme for the students of ITIs, Polytechnic, Engineering, Pharmaceuticals, Ayurvedic, Science,
Arts, Commerce Colleges, Management institutes in respective districts

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Entrepreneur Information handbooks containing guidelines on all the procedures and formalities of
setting up and operating a business in Karnataka will be prepared and distributed through guidance
cells
e)

Other areas of support for entrepreneurship development


State will set up a dedicated Entrepreneurship Development Fund of INR 50 Crores every year to
improve access to finance for first time entrepreneurs who show potential and have proven their
merit.
State will create district level Entrepreneurship Ambassadors from amongst industry captains to
promote entrepreneurship amongst youth though regular interaction and education.

f)

Encouraging Entrepreneurship Ambassadors and Awards


State and district level entrepreneurship awards and rewards will be created to encourage
entrepreneurship. Winners will be given an opportunity to get on the job training from government
recognised entrepreneurship ambassadors and will be eligible to grant from the state.

5.3. Investor Facilitation


5.3.1.

To provide online and transparent facilitation mechanism for all investments proposals
A one stop online information centre will be established for Industrial Areas/ estates to enable
i.

Application system for land in industrial areas/ estates

ii.

Profile and detailed information system for all industrial estates/ areas

iii.

Grievance Redressal Mechanism

iv.

A common website indicating district-wise details of industrial areas with particulars of


industries and products manufactured, exports, and infrastructure details such as land,
power, water, common support infrastructure availability, etc. will be introduced at
Directorate of Industries &Commerce/ KIADB/ KSSIDC. This will allow new investors to plan
their investments and support existing industry through marking opportunities.

5.3.2.

To provide online and transparent facilitation mechanism for all investments proposals
As appointed by the Karnataka Industries Facilitation Act 2002, Karnataka UdyogMitra (KUM) will
continue to act as the nodal agency at the State level to undertake investment promotional activities
and to render necessary guidance and assistance to entrepreneurs to setup industrial undertaking in
the State. KUM will act as the central facilitation cell for all investors in the state and will be the first
point for receiving of all investment applications/ proposals.

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The state has made continuous endeavours to decrease cost and increase accessibility and
transparency of the investment application system in the state. It has recently introduced an online
facilitation portal for investors and departments to apply, approve, track and monitor the proposals in
an effective manner. This online application system will be extended to include submission of an
online Combined Application Form for investment proposals. This extended system will facilitate the
investors in submitting, tracking and getting the approvals online without visiting multiple
departments.
Government will make efforts to introduce an online system for tracking MSME investments at the
district level through DICs and district level facilitation cells. It will also set up an online dedicated
Grievance Redressal Mechanism for investors.

5.3.3.

To strengthen single window mechanism to facilitate the investors to avail all clearances
through one nodal agency
Projects approved and authorised for implementation by the State High level Clearance Committee
(SHLCC), and or State Level Single Window Clearance Committee (SLSWCC) and or District Level
Single Window Clearance Committee (DLSWCC) appointed by the Karnataka Industries Facilitation
Act 2002, will be valid and binding on all line departments.
Opinion is to be sought from relevant line departments for projects where application is filed with
KUM (Information and fees provided by investor is complete in all formats) and placed before
approval committee for approval. The timeframe for receiving such opinions from line departments
has been defined as 90 days by the State and can be revised by the state from time to time. Investors
having clear possession of land will be given all clearances/ approvals after filing of application with
KUM provided line departments do not submit any objection when their opinion is sought. Investors
not having clear possession of land will only be given in-principal approval and final approval will be
given after clear possession of land.
All the regulatory approvals (except land) required under the SHLCC and SLSWCC for s will be
provided within 90 days of the receipt of the application in Karnataka UdyogMitra

5.3.4.

To streamline and simplify procedures for industrial investments


A comprehensive study for regulatory simplification will be undertaken by government to reduce time
& cost of compliance to government procedures for industrial investments. All regulatory and
statutory approvals required for project clearances will be covered in the study and necessary actions
will be taken against recommendations of the study for regulatory simplification across all
departments.

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State shall explore the possibility of removing the Trade license system or simplifying the trade license
for manufacturing industries.
All application processes and procedures for new investments in the state will be made available in
one place in the KUM website and respective departmental processes and procedures will be made
available on their respective websites.

5.3.5.

To provide better investor facilitation through improvement in information accessibility, and


awareness
Government will establish dedicated trade offices in countries that attract maximum foreign direct
investment and have strategic advantage to Karnataka. These offices will help build strategic
relationship through active dialogue with governments and industry of the local country, enhance
social & cultural ties through promotion of exchange programmes, and attract investment through
active engagement with local industry. These offices will also facilitate bilateral trade through
education, research, trade promotion, networking and other information support.
Government will make available provision of dedicated liaison officer to facilitate easy clearance for
critical and strategically advantageous projects.
Investors meets and road shows will be organized regularly at State / National/International level to
attract large scale investment to the State.
Industrial Adalats will be organized regularly at District / State level with a view to understand the
problem of industries and to settle pending cases.
Investor Information Handbook and Industrial Statistical Handbook will be prepared on an annual
basis to help investors with necessary information on various industrial areas, incentives, procedures,
doing business guidelines and industry statistics
Going forward more approvals for investors facilitation will be brought under SAKALA

5.4.

MSME Development

5.4.1.

To provide thrust on development of MSME sector through attractive package of incentives,


concessions and benefits
In order to extent technical support to M S ME Sector it

is proposed to establish the Technology

Development Centre at NIMZ Tumkurwitbudgetory support of Rs150-200 crores funded by Ministry of


MSME, GOI for which State Govt. will made available 15 acres of land free of cost.

MSME sector investing in the state will be eligible for an attractive package of incentives, concessions
and benefits as per Annexure 2.

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Government to earmark minimum 20 30%extent of allotable land in KIADB industrial areas for
MSMEs wherein further reservation of 20%, 30% and 50% of allotable land would be made available
for micro, small and medium enterprises respectively.

Department of Industries will conduct an annual vendor development event at the State levelto bring
together MSMEs and large manufacturers/Public Sectors. Similar events at the District level also will
be conducted.An online system will be created for tracking of collaboration/vendor opportunities for
MSMEs.

Government may examine the possibility of exempting all MSME projects falling under the green
category and not included in the list of polluting industries from obtaining CFE/ CFO from Karnataka
State Pollution Control Board (KSPCB).

State will evolve a mechanism to reduce uncoordinated and irregular inspections conducted by various
line departments to ease burden on MSMEs.

Government will plan for awarding MSMEs for achieving excellence through growth in production and
profit, quality and environment improvement measure.

Selected recipients from each district would get priority for sponsored participation in national and
international trade fairs.

5.4.2.

To promote Made in Karnataka brand through market development initiatives


Goods and products manufactured locally in the state will be given preference over those
manufactured outside the state in case of all purchases made by government departments and
government undertakings except where there is limited option available locally and or the
department has specific or urgent requirements.
Preferential pricing of 15% will be allowed for the goods manufactured by MSMEs in the state in case
of purchases by the government departments and government undertakings.

5.4.3.
a)

To promote sector specific MSME cluster development and business incubation centres
Development of Rural Industrial Areas for MSME
Development of separate rural small industrial areas for Micro, Small and Medium Industry with
enabling infrastructure, viz. road connectivity, drainage system, street lighting, and water supply will
be initiated by KIADB.
State government will provide land, power and water at subsidized prices.
Rural small industrial areas will have minimum 100/ 150 plots per district per year measuring 2000 sq.
ft to 10000 sq. ft. and plots shall be allotted only to non-polluting industries.

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Land will be allotted to Micro, Small and Medium Enterprises in the ratio of 25%, 35% and 40%
respectively.
A budgetary provision of INR60 Crores per annum will be made available to subsidise the plot cost.
b)

Cluster Development
Benefits under Micro and Small Enterprises Cluster Development programme of Government of India
will be facilitated for MSME cluster development. The objective of the scheme is to support the
sustainability and growth of MSEs by addressing common issues such as improvement of technology,
skills and quality, market access, access to capital, etc. It also seeks to build capacity for MSEs,
create/ upgrade infrastructural facilities in the industrial areas/clusters of MSEs, and to set up
common facility centres.
The Karnataka Council for Technological Upgradation (KCTU) will continue to be the monitoring /
nodal agency on behalf of the State Government for the Micro and Small Enterprises Cluster
Development Programme that has been launched by the Ministry of Micro, Small and Medium
Enterprises.
Realising the need for MSME clusters, GoK will be launching a scheme for development and up
gradation of existing clusters.Under the phase 1 ofscheme a sum of INR 20 crore per annum, will be
earmarked for upgradation of existing clusters and development of new clusters.Under this scheme
the state will also develop a comprehensive MSME development plan for the state. Under this scheme
the state will also provide viability gap funding for setting up of business incubation centres in the
KIADB industrial areas under PPP mode. Under the phase 2 of the scheme the state will create district
level master incubator to provide district level implementation support to MSMEs and Entrepreneurs.

5.4.4.

Institutional strengthening for implementation of existing & new schemes


A nodal agency shall be appointed for creating awareness, implementing and monitoring of existing
and new state and central government schemes and programmes for MSME development.

5.4.5.

To promote state exports through a separate export policy


State Government is contemplating to come out with dedicated State Export promotion policy and
IPR Policy to promote exports from Karnataka.

5.4.6.

Quality Improvement
Quality improvement interventions by state MSMEs such as upgradation of existing and installing of
new technologies for quality control, cleaner environment friendly production, quality testing, and
fees paid for quality certifications would be eligible for one time subsidy through reimbursement of

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actual costs. This benefit would be available for MSMEs who have already taken benefits under
central government schemes and would like to go for renewal.
Details of incentives are as in Annexure 2.

5.5.

Sustainable

Industrial

Growth

Technology

Transfer

and

Upgradation Support
5.5.1.

Adopt a sustainable green industrial growth strategy to safeguard and protect the natural
resources of the state
Efforts will be made to adopt a green industrial development program that looks at more sustainable
patterns of production and consumption i.e. patterns that are resource and energy efficient, lowcarbon and low waste, non-polluting and safe, and which produce products that are responsibly
managed throughout their lifecycle while providing sustainable livelihoods and continuous job
creation.
In the long run this measure will help reduce burden on public finances, improve environmental safety,
reduce vulnerability of natural resources, expand coverage of water and energy services and make it
more efficient, reduce health impacts associated with environmental degradation; reduce costs and
increase productivity from technologies that will also ease environmental pressure, etc.
Department of Industries in close co-ordination with Karnataka State Pollution Control Board
(KSPCB) will try to build awareness, educate and engage the industry in reducing environmental
footprint.
Awareness programmes for green manufacturing and sustainable production will be initiated in all
districts through the DIC with active participation of green champions from the local industry on a
regular basis. All green champions from the industries participating in government green awareness
programmes will be allowed credit under CSR programmes, the guidelines for which will be decided in
association with KSPCB.
Department of industries will initiate a study to develop a strategic framework for the state to identify
and prioritize specific interventions required to make industrial growth sustainable.
Department will also conduct a benchmarking study to map the water consumption pattern, energy
consumption pattern, solid waste management practices, discharge practices, etc. of major KIADB
industrial areas in the statewith international standards and best practices. Also specific targets will
be set for various aspects in each sector which will act as the guidelines for all new and existing units.
Any new industry will have to comply with these standards to avail incentives under the industrial
policy and existing units will be encouraged to adhere to the new guidelines with special benefits
under CSR programmes.

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Under the green industrial growth agenda of the state, adoption of following standards will be made
mandatory for all new industries and one time reimbursement of cost facility will be offered to new
and existing MSME units adopting these standards(Details are as in Annexure 2):
i.

Rain water harvesting

ii.

Environmental and Water audit

iii.

Wastewater treatment and reuse

Units practicing zero water discharge will be eligible for onetime subsidy on relevant equipment/
technology upgradation(Details as in Annexure 2).
Industries Department will work along with KSPCB to review and rationalize existing list of green, red
and orange categories of industries to reduce avoidable renewable burdens without compromising on
environmental protection needs.
Department of Industries along with KIADB will also initiate a program for greening of minimum 50
existing industrial areas per annum across the State.Under the scheme a funding INR 15 crores will be
provided every year regarding study and implementations of various initiatives.Emphasis would be
placed on developing green industrial parks/estates with a vision for next 20 years.
Adequate land will be compulsorily earmarked in all new industrial areas/ estates for setting up
Common Effluent Treatment Plant (CETP) and other common environment protection measures.
Recycling of electronic waste and setting up of e-waste recycling units will be encouraged and
incentivised.
Green and non-polluting industries will be given preference over polluting and environmentally unsafe
industries while allocation of land in KIADB industrial areas and for allocation of government land.
Also, scholars and entrepreneurs conducting research & development or creating start-ups in the field
of sustainable industrial development and green industries will be given due importance and priority.

5.5.2.

Technology Transfer/Upgradation support


To promote world class technology linkages through provision of incentives support for
technology transfer and upgradation to industries located in Karnataka
The state government will encourage Technology Upgradation Scheme for promotion of technology
upgradation in manufacturing sector in the state. The scheme will cater to the needs of both MSMEs.
The scheme will be aimed at providing benefits to the local industry over and above the benefits
available under central government scheme.
The scheme is intended towards capital expenditure for activities like process up gradation, reducing
carbon foot print, reducing the water consumption, reducing power consumption, adoption of new

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technology to improve quality compliance & standards, patent registration, etc. Special emphasis will
be given to adoption of sustainable technologies and processes(Incentives details are as in Annexure
2).

5.5.3.

Adoption and commercialization of technology


The Department of Industries and Commerce will introduce a scheme to run technology transfer
programs in collaboration with domestic & international research institutes/ agencies and technology
transfer agencies. Patent pooling and registration will be undertaken under this scheme. Also, under
the scheme the state will create a shelf of projects along with detailed project reports for projects for
technology adoption.
Under this program specific emphasis will be given to promote export oriented units.
Department of Industries and commerce will run quarterly workshops and seminars through VTPC
&KCTUfor SMEs & entrepreneurs to increaseawareness for adoption of new technologies(Incentives
details are as in Annexure 2).

5.5.4.

To promote research & development institutes where no such R&D centre/ facility exists
Recognised R&D centres coming up in zone 1, 2 & 3 and supporting manufacturing industry will be
eligible for a 50% capital subsidy limited to INR 500 Lakhs. Minimum two R & D centres per annum
will be promoted.

5.6.

Regional Balanced Growth

5.6.1.

To provide equal opportunity for Industrial and urban development in every


district/region of Karnataka and to create job opportunities for youth and women
across all regions of the society
Depending on the backwardness of the talukas, the State is classified into five zones(details are as in
Annexure -1).
Department of Industries in collaboration with Infrastructure and other social sector departments will
develop a comprehensive Regional Economic Development Framework. The state will also launch a
comprehensive Regional Industrial Competitiveness Improvement Programme (RICIP).
As a part of the regional development initiative, the state has already identified multiple large scale
infrastructure projects like NIMZs & Industrial Corridor development. These initiatives have been
aimed towards creation of multiple Cities as Engines of Growth with a cluster of economically
vibrant Towns around each City.
Another critical aspect of the program will be aligning the industrial development approach with
sector competitiveness of the region through a cluster development approach. As a result six priority

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cities will be identified to be developed on a hub-and-spoke model of inclusive and equally distributed
industrial and economic growth centres cutting across districts and regions in the State.

5.6.2.

Promotion and facilitation of industrial investments across districts/ regions


State plans to develop two major Industrial Corridors, ChennaiBangaloreChitradurga Industrial
Corridor and BangaloreMumbai Economic Corridor, and four NIMZs across the state. This will help in
stimulating manufacturing investments across the state.
Proposals for SEZs/ Industrial Areas/ Estates in industrially backward districts would be encouraged
and given top priority
Special incentive for private industrial areas to be setup in backward districts
Government of India has also agreed to provide NIMZ benefits to the manufacturing units coming up
in Information Technology Investment Region in the state.

5.6.3.

Anchor Industries
To promote setting up of anchor industries in districts/ taluks/ industrial areas where no such industry
exist so that downstream opportunities for MSMEs can be encouraged and Anchor unit subsidy on
Fixed Assets shall be offered for the firts two manufacturing enterprises per taluk with a minimum
investment of INR 100 crores at minimum employment of 100 persons. The subsidy will applicable
only in Talukas where no Industrial Enterprises of the above investment exists at present. The rate
and amount of subsidy is shown in the package incentives and concessions chapter in Annexure-2.
This subsidy will be applicable only in taluks where no industrial enterprise of the proposed size exists
at present.

5.7.

Special focus on promotion of manufacturing industries


Policy measures based on sector specific policies and recommendations of Manufacturing Task Force
(MTF) committee:

5.7.1.

Defence and Aerospace Sector


Karnataka has introduced an Aerospace policy, namely the Karnataka Aerospace Policy 2013-23. This
is a first of its kind state level policy on aerospace and defence in India (All aerospace sector
investments and industry would be eligible for incentives and benefits under the Aerospace policy).
Key highlights of the Karnataka Aerospace policy 2013:
i.

Anchor Unit Subsidy INR 500 lakhs for first 10 Aerospace OEM with minimum investment of
INR 50 crore

ii.

Exemption from stamp duty & concessional registration charges

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iii.

100% exemption from electricity duty / tax for aerospace units

iv.

Interest free loan on VAT

v.

Reimbursement of 75% CST for a period of 5 years

vi.

100% entry tax exemption for aerospace units

vii.

Special Package of incentives for mega, ultra mega, and super mega projects

viii.

Karnataka also has a dedicated industrial park for aerospace companies Bangalore
Aerospace Park, which is currently being set up alongside the Bangalore International
Airport. Efforts will be made to operationalize Bangalore Aerospace Park within 2014 so that
industrial units can start to move in.

5.7.2.

Automotive Sector
The state would like to transform Karnataka into an energetic automobile hub of the country by
leveraging advantages and opportunities available for sustained development of the emerging
automobile sector:
i.

State will explore setting up of Major Auto Parks at Dharwad, Kolar and Bidadi in
Ramanagara district.

ii.

Also Government will explore setting up of Auto Parks of smaller size at potential locations
like Belgaum, Shimoga, Mysore and Gulbarga.

iii.

State proposes to incentivize and institutionalize the R&D environment in the State by
fostering and supporting linkages between industry and academia for free competitive
research.

iv.

Proposed to commission the Karnataka Automobile Research & Innovation Centre in


Karnataka, this would also act as an incubation centre. The centre is proposed to be
established on a PPP model with the State funding up to 50% of the cost.

v.

All Auto Parks to set aside 20% of land for MSMEs.

Measure planned for improving Auto sector competitiveness


i.

Government to set up a venture fund with an initial capital of at least INR 50 crore. (and on
similar lines of IT and Biotech) specifically focused on boosting MSMEs requiring growth
capital and start-up capital the fund should start

ii.

Setting up training cells in select clusters focused on specific engineering needs

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iii.

Tie up with NSDC (National Skills Development Corporation) to identify private sector
initiatives that can be quickly funded jointly by NSDC and the State in order to train and
provide employment ready personnel to the industry.

iv.

To set up a focus group for addressing the problems of the auto component sector

v.

To explore options for reducing road tax and registration tax to reduce burden on State
Environment through vehicular pollution.

5.7.3.

Pharmaceuticals Sector
In January 2013, Health and Family Welfare department of Government of Karnataka released
Karnataka Pharmaceutical Policy 2012, with an objective To make Karnataka a vibrant
pharmaceutical manufacturing hub by leveraging the strengths of knowledge based institutions and
skilled human resource of the State, to provide innovative, quality and affordable health care
solutions to the masses. All pharmaceutical sector investments and industry will be eligible for
incentives under the policy.
Key highlights of the policy are:
i.

Setting up of specialised infrastructure for Pharmaceutical sector like Pharma Parks and
Special Economic Zones

ii.

Efforts will be made to encourage setting up of R&D institutions related to pharma sector to
leverage the strengths already available in the State.

iii.

The Government will support selected & reputed pharmaceutical educational institutions in
setting up Finishing School for Pharmaceutical Learning across Karnataka.

iv.

Special incentives and concessions to attract mega projects

v.

State Government will set up a Venture Capital Fund with a corpus of INR50 crores with
contribution of 26% from Government

vi.

Industries will be supported to go for non-conventional energy sources like solar, wind, biofuel, utilisation of solvent waste for boiler, etc., for their requirements. Adoption of rain
water harvesting, water recycling and other conservation measures will also be supported by
incentives

vii.

Common Effluent Treatment Plants (CETPs) to be established in PPP model in Pharma


Parks. SEZs and other clusters of pharmaceutical industries will also be supported by way of
one time grant to augment investments on such CETPs

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viii.

Pharmaceutical companies, which take steps for reducing waste generation at source or
recycling of wastes will be supported by providing subsidy upto 50% of the cost subject to a
maximum of INR50 lakhs

ix.

Purchase of refrigerated vans by industry for captive use will be considered as part of capital
investment of the unit

x.

Appointment of more Quality Enforcement Officers and Drug Testing Laboratories with
adequate state of the art testing equipment

5.7.4.

Steel Sector
Iron and steel manufacturing has attracted huge investments over the last decade with estimated
employment generation of more than 8, 00,000 direct and indirect. The sector has also been critical in
providing backward linkages to a large number of manufacturing industries. Lately the steel sector in
the State has been facing considerable challenges due to bottlenecks in land acquisition, hurdles in
iron ore mining and transportation costs, which have led to declining investments in the Steel sector.
Efforts will be made to remove hurdles in mining of iron ore specifically for captive consumption to
produce Steel is going to be a priority for the State.
Specific clusters for steel along the iron ore producing areas such as Bellary-Hospet, Tumkur,
Chitradurga, Chikmagalur and along industrial corridors with necessary high speed connectivity will
be created.
It will be made mandatory for the steel and cement industries to develop specific skilling centres to
upgrade existing skill sets and boost productivity per employee. This should be done in conjunction
with NSDC sector skill councils.
Mineral assets will be proposed to be allocated first to existing value addition industry. And, in order
to make the industry accountable for development of mineral assets, it will be allocated only after
completion of 100% of ordering and completion of 50% of the project activity.
As India is still importing value added steel like Cold rolled steel, Galvanised steel, electric steel, Tin
Plates, etc. Existing industry or new industry intends to invest for production of value added steel
products and which becomes substitute for imports, such investments will be considered for special
package of incentives and concessions(details as in Annexure -2).
Setup the Research Centre to undertake research on better mining practices and promote use of
latest technology in mining.

5.7.5.

Cement Sector
The spurt in infrastructure projects such as the dedicated freight corridors, upgradation and creation
of new airports and ports have increased the demand for cement. The growth of the housing sector
and road construction projects has also provided significant opportunities. The demand for cement is

Industrial Policy 2014-19 Final Draft

31

likely to be sensitive to the growth in these sectors and will also impact policy initiatives. To help the
cement industry grow further, the state will take initiatives to resolve issues relating to Logistics
(Railways, Roads, Inland Waterways, Port connectivity); Raw Materials; Fuel (Coal, Pet coke,
Alternative fuels); Fly Ash and Land Acquisition.
Efforts will be made to remove hurdles in mining specifically for captive consumption to produce
Cement (Value Addition).
Specific clusters for Cement manufacturing will be created around Gulbarga, Bagalkot, Chitradurga,
and Belgaum district.

5.7.6.

Agro, Food Processing and Sugar Sector


Karnataka has rich biodiversity and ten agro-climatic zones suited for majority of the agricultural &
horticultural crops and a long coastline that encourages fisheries. The state contributes around 7% of
the agricultural production and 15% of the horticultural production in the country.
Karnataka has abundant availability of raw material to consistently tap into the growing demand for
processed foods both from domestic and export standpoint. However, the State faces severe
constraint in terms of limited processing facilities and inadequate quality control and testing methods
as per international standards. Given the high potential for employment generation in the sector and
the anticipated output, it is imperative to provide an enabling environment for the sector.
With a vision To position Karnataka in a sustained growth path in the field of agricultural and allied
sectors through global technologies and innovative tools, by creating enabling frameworks and state
of art infrastructure facilities, thereby generating higher returns to farming communities, GoK
launched Integrated Agri Business Policy in 2011.Going forward agriculture department also plans to
introduce Agri& Food processing policy to promote the sector in the state.
The State will focus on mapping the skill gaps and identifying priority areas for human resource
development for increasing the productivity of workers/units in the sector. The State will also seek to
inspire innovation and technology development to boost this sector. Requests for technology &
quality upgradation subsidy by agro and food processing industries will be given priority over others.
Regulatory and statutory approvals for setting up of food parks in the state will be expedited and
prioritised. Mega food parks will be set up in Gulbarga, Tumkur, Chikmanglur, Hassan, Mysore and
Mandya as recommended by the MTF.
Implementation of the projects and schemes under National Mission for Food Processing (NMFP) will
be expedited.

Industrial Policy 2014-19 Final Draft

32

Special package of incentives namely concessional power tariff, enhanced VAT loan / grant will be
offered for mega industries engaged in producing value added import substitute products (Details as
in Annexure 2)

5.7.7.

Machine Tools Sector


The Machine tools sector forms the backbone of manufacturing operations in various industries and is
supported by a large base of MSME set ups. The machine tools sector supports key industries such as
automotive, aerospace and defense, textile, heavy engineering and steel, etc. Karnataka produces a
majority of Indias machine tools with the Bangalore area alone producing about 60% of the machine
tools of India in terms of value which is estimated at INR 2,160 crore.
Government of Karnataka has already approved the establishment of machine tools park which will
be significant boost to the sector in the state.
It is proposed to set up a machine tools focused technology incubation centre in the state. Courses to
support creation of skilled employable workforce for the machine tools industry will be introduced in
state skill development centres. Upgrading of existing tool rooms and creation of new tool rooms in
PPP mode will also be explored.
Central government schemes such as ASIDE, MSE-CDP, MIIUS, etc. will be leveraged for the growth
and support of the sector.

Industrial Policy 2014-19 Final Draft

33

5.8.

Special thrust for encouraging SC/ST, Women, Minority, PH and ExServicemen entrepreneurs

5.8.1.

To safeguard and uplift entrepreneurs from other social sections through reservation and
facilitation in key government programmes and initiatives
State to introduce Entrepreneurship Development Programmes exclusively for prospective first
generation women entrepreneurs where interest free start up loan with flexible payback schemes and
continuous guidance will be provided upon successful completion of State Entrepreneurship
Development courses.
State will provide reservation for such entrepreneurs including priority for allotment of land in
KIADB/KSSIDC Industrial area and proposed NIMZs for setting up of industrial units.
Special package of incentives over and above what is offered has standard package will be provided
to SC/ ST/ Women/Minority/PH and Ex-Servicemen entrepreneurs as given in Annexure -2.
State will provide additional export and market development assistance upto INR 2 Lakhs to
entrepreneurs availing incentives under Government of India programme for Trade Related
Entrepreneurship Assistance and Development Scheme for Women (TREAD) and marketing
assistance.
State will provide space reservation in government funded incubation centres and skill development
centres for first time SC/ ST/ PH, Ex-Servicemen/ Women MSME entrepreneurs.

5.9.

Support for promotion of Khadi, Artisan and Coir sector


The government will make all efforts to encourage growth and development of the Khadi, Artisan and
Coir sector through institutional support.
State will focus on optimal utilisation of benefits out of centrally sponsored schemes such as Prime
Ministers Employment Generation Programme, Rural Industry Service Centre, Export Incentive
Scheme, Interest Subsidy Scheme, etc. for the Khadi, Artisan and Coir sector.
It is proposed to create a separate cell for Khadi, Artisan and Coir sector to coordinate for benefit
realization under Central and State Schemes
To promote the coir industry the state will

Provide continuous power by implementing NirantharaJyothiYojana

Power subsidy at INR2/- per unit

Industrial Policy 2014-19 Final Draft

34

A scheme for providing funding for difference of wages between Minimum Wages and the
wages earned per day will be introduced on similar lines to Khadi worker

Additional 3% interest subsidy on term and working capital loan for coir industry over and
above what is already prescribed in the policy and applicable to the rest of the units.

5.10. Special Thrust for encouraging Industrial Development in Hyderabad- Karnataka Area :
Leverage on the Article 371 status for Hyderabad Karnataka Area to create a strong industrial base
there. The State Government will petition the Central Government to offer tax incentives like Excise
Duty Exemption, Income Tax Exemption to boost manufacturing.
All Talukas of Hyderabad Karnataka Area are exclusively covered under Zone I of the policy to
provide the required boost to industry.

Mega, Ultra mega & Super Mega projects coming up in Hyderabad Karnataka region will provided
with special incentives of land and concessional rates upto 20% of the land price based on the
merits and advantages of such projects for the state.

5.11.

Attractive Standard and Special package of incentives and concessions


The details of standard package of incentives and concessions offered for establishment of Industry
under MSME, Large, Mega, Ultra Mega, Super Mega category of enterprises along with special
package incentives and concessions for Mega, Ultra Mega and Super Mega category are indicated in
the Annexure 2.

5.12.

Smooth exit, revival and relocation policy


The sick unit revival policy for small, medium and large scale units which was issued during 2002 is
still in force with few modifications. In view of changes in the units classifications, financing
procedures, changes in policies, it needs to be replaced with comprehensive policy.
Efforts will be made to adopt exit mechanism for non-viable businesses which has lead to locking
of funds and capital assets, while giving full protection to the interest of employees.
Further, in view of rapid growth of cities like Bangalore, Mysore, Dharwad, Belgaum, etc. are facing
shortage of infrastructural facilities along with traffic congestion. Therefore there is an urgent need
for introduction of relocation policy for labour intensive industries.
In view of facts explained above, it is proposed to bring in a comprehensive policy for smooth exit,
revival and relocation of industries.

Industrial Policy 2014-19 Final Draft

35

6. Milestones / Review / Monitoring


In order to achieve the targets spelt out in the policy within the stipulated time frame, following milestones are set for ensuring periodical progress:
Estimation of Land, Water & Power requirement for above Targets under Industrial Policy 2014-19
Sector

No. of
units

Micro

15oooo

Investment

Employment

INR in Crores

25000

600000

Land

Water

in

requirement in

Million

liter

Acres

per day

5000

Power in MW

100

15

Remarks

Around

40,000

units

will

be

requiring either sheds or small plots


from govtand the rest will be will be
either in rented premises and own
Small

15000

50000

250000

2500

300

10

Around 5000 units will be requiring


either sheds or plots from govtand
the rest will manage themselves
with rented building or their own
lands.

Medium

3000

50000

175000

3000

300

15

Around1500 units will be requiring


land from govt,and the rest will
manage on their own land or leased
property.

Industrial Policy 2014-19 Final Draft

36

Large

1500

75000

150000

5000

150

30

Land will be acquired as suc/ or


under section 109

Mega

300

100000

125000

3000

400

20

Land will be acquired as suc/ or


under section 109

Ultra Mega

150

100000

125000

7500

750

50

Land will be acquired as suc/ or


under section 109

Super Mega

75

100000

75000

14000

1000

100

Land will be acquired as suc/ or


under section 109

TOTAL

170025

500000

1500000

40000

3000

240

A high level Inter Departmental Review Committee will be constituted to regularly monitor implementation of all provisions of the policy. This

committee will

also ensure issue of necessary Govt. orders by various departments in relation to the policy without loss of any time for mid-course corrections, if required for
smooth implementation of the Policy. The committee will also bring out annual reports indicating the progress in implementation of the Policy.

Industrial Policy 2014-19 Final Draft

37

7.

Budgetary provision
The requirement of funds for implementation of various components of the policy during the policy period yearwiseshall be as follows:
2014-15

SN

Schemes

No. of

2015-16

Amount

units

No. of

2016-17

Amount

units

No. of

2017-18

Amount

units

No. of

2018-19

Amount

units

No. of

Total

Amount

units

No. of

Amount

units

Provision for Infrastructure Development


1

Sector specific industrial zones

50.00

----

50.00

----

50.00

----

50.00

----

50.00

250

Knowledge City Corridor between Mysore

10.00

----

10.00

----

10.00

----

10.00

----

10.00

50

and Mangalore
3

Industrial Townships

0.25

0.25

0.25

0.25

0.25

1.25

Upgradation of Industrial Areas / Estates

30

100.00

30

100.00

30

100.00

30

100.00

30

100.00

150

500

Supply of Tertiary treated water

----

100.00

----

100.00

----

100.00

----

100.00

----

100.00

500

Private Industrial Estates / Areas

10

50.00

10

50.00

10

50.00

10

50.00

10

50.00

50

250

Greening of Industrial Area / Estates

15.00

75

Subsidised plots to MSMEs

60.00

15000

300

Industrial Policy 2014-19 Final Draft

15.00
3000

60.00

15.00
3000

60.00

15.00
3000

60.00

15.00
3000

60.00

3000

38

Development of New / Existing Clusters

10

R&D centers

20.00
2

11

5.00

20.00
2

5.00

20.00
2

20.00

20.00

100

5.00

5.00

5.00

10

25

Provision for Human Resource Development


a)

Trainers Training programme

b) Revival of ATIs
c)

On job training

100

0.25

100

0.25

100

0.25

100

0.25

100

0.25

500

1.25

0.25

0.25

0.25

0.25

0.25

15

1.25

10000

25.00

10000

25.00

10000

25.00

10000

25.00

10000

25.00

50000

125

d) Adoption of Information and

0.20

0.20

0.20

0.20

0.20

Communication technology
e)

Auditing of Training Institutes

0.25

0.25

0.25

0.25

0.25

1.25

f)

Labour market information system

0.50

0.50

0.50

0.50

0.50

2.5

20.00

20.00

20.00

20.00

20.00

100

1.00

1.00

1.00

1.00

1.00

g) Institutional Support and


Infrastructure Development
h) Skill Development for Social groups
i)

Entrepreneurship Development

j)

Enterpreneurship Development fund

Industrial Policy 2014-19 Final Draft

3000

1.00

3000

1.00

3000

1.00

3000

1.00

3000

1.00

15000

---

50.00

---

50.00

---

50.00

---

50.00

---

50.00

250

39

k)

Enterpreneurship Incubation Centres

1.00

1.00

1.00

1.00

1.00

l)

Enterpreneurship awards

0.20

0.20

0.20

0.20

0.20

Standard Package of incentives and concession to MSMEs , Large , Mega , Ultra Mega and Super Mega Enterprises
12

Investment Promotion Subsidy for MSME

1000

100.00

1100

110.00

900

90.00

950

95.00

850

85

4800

480

13

Refund of Land Conversion Fine

100

1.00

115

1.15

90

0.90

95

0.95

90

0.90

490

4.9

14

Refund of Certification Chares to MSME

30

0.30

35

0.35

35

0.35

30

0.30

25

0.25

155

1.55

15

ETP subsidy for MSME,Large, Mega,

50

50.00

50

50.00

50

50.00

50

50.00

50

50.00

250

250

30

100

35

150

40

150

50

200

55

200

210

800

Ultra Mega & Super Mega


16

Interest Free Loan on VAT for Large,


Mega, Ultra Mega & Super Mega

17

VAT Grant for MSMEs

50

30

65

40

70

40

80

45

85

50

350

205

18

Anchor unit subsidy

10

10

12

10

15

10

15

10

15

48

67

19

Interest Subsidy for Micro and Small

100

1.00

125

1.25

125

1.25

150

1.50

150

1.50

650

6.5

1000

2.00

1000

2.00

1000

2.00

1000

2.00

1000

2.00

5000

10

Enterprises
20

Power Tariff Subsidy to Micro Industries

Industrial Policy 2014-19 Final Draft

40

21

Technology Upgradation , Quality

50

0.30

60

0.40

50

0.50

50

0.50

65

0.65

275

2.35

10

0.10

15

0.15

20

0.25

20

0.25

25

0.30

90

1.05

10

0.08

15

0.10

17

0.15

18

0.16

20

0.20

80

0.69

0.50

0.70

10

1.00

12

1.20

15

1.50

49

4.9

50

10.00

100

25.00

150

50.00

200

75.00

250

100.00

750

260

18646

815.18

18876

903

18713

911.3

18861

18836

1017.2

93932

4643.44

Certification and Patent Registration for


Micro and Small Enterprises
22

Water harvesting/ Conversation Measures


for Small and Medium

23

Energy Conservation for Small and


Medium Enterprises

24

Addl. Incentives to the enterprises


following Reservation policy of the State

25

Special Package of Incentives to Large,


Mega ,Ultra Mega etc.,

Total

996.7
6

Note: The above provisions are made only wherever the funds are not available from the GOI Schemes.

Industrial Policy 2014-19 Final Draft

41

8. Expected benefits to the State


In addition to employment creation for 15 lakh people, the State will also have the following benefits:

Per Capita income will go up and leads to additional tax generation

Leads to scope for development of Educational Institutions, Transportation, Hotels,Tourism,


etc.

Expected to generate additional direct sales tax revenue approximately INR500 crores every
year and by the end of the policy period the additional sales tax revenue to the State
exchequer would be around INR2500 crores.

9. Implementation mechanism
In order to implement the policy more effectively and meaningfully there is a need to reorganize the
department by way of strengthening the gross root level offices particularly at Taluk and District
levels. To this effect, the department will initiate action to submit the proposals to Government for
approval with proper justifications.

Industrial Policy 2014-19 Final Draft

42

10. Annexure 1 Classification of Taluks


Classification of Taluks in Karnataka into Zones for the purpose of administering Incentives & Concessions
Sl. No.

Districts

Total
No.ofTaluks

Hyderabad Karnataka
region (Zone 1) Special
Zone

Most Backward Zone

More Backward Zone

Backward Zone

Industrially Developed Zone

(Zone 2)

(Zone 3)

(Zone 4)

(Zone 5)

---

---

---

Other
than
notified
Industrial
Areas
in
AnekalTq.

Notified Industrial Areas in


AnekalTq.

---

---

---

---

Blore (North)

---

---

---

---

Blore(South)

---

---

---

---

Blore(East)

---

---

---

Other
than
notified
Industrial
Areas
in
DevanahalliTq.

Notified Industrial Areas in

---

---

---

Other
than
notified
Industrial
Areas
in
DoddaballapuraTq.

Notified Industrial Areas in

---

---

---

Other
than
notified
Industrial
Areas
in
HoskoteTq.

Notified Industrial Areas in

---

---

---

---

Nelamangala

---

Kanakapura

---

Other
than
notified
Industrial
Areas
in
RamanagaraTq.

Notified Industrial Areas in

---

Magadi

---

Other
than
notified
Industrial
Areas
in
ChannapatnaTq.

Notified Industrial Areas in

---

Hosadurga

Hiriyur

Chitradurga

---

South Karnataka Region

Blore (U)
4

Blore (R)

Ramanagara

Chitradurga

Industrial Policy 2014-19 Final Draft

DevanahalliTq.

DoddaballapuraTq.

HoskoteTq.

RamanagaraTq.

ChannapatnaTq.

43

Davanagere

Chikkaballapura

Kolar

Shimoga

Tumkur

10

10

Chamaraja-nagar

11

Chicka - magalore

Industrial Policy 2014-19 Final Draft

---

---

Molakalmur

---

---

---

---

Hololkere

---

---

---

---

Challakere

---

---

---

Channagiri

Honnali

Davangere

---

---

Harapanahalli

Jagalur

Harihar

---

---

Bagepalli

Gudibande

Chikka- ballapura

---

---

---

Gowribidanur

Siddlaghatta

---

---

---

---

Chintamani

---

---

---

Mulbagal

Kolar

---

---

---

---

Bangarpet

---

---

---

---

Srinivasapura

---

---

---

---

Malur

---

---

---

Soraba

Shimoga

---

---

---

Bhadravathi

---

---

---

---

Sagar

---

---

---

---

Shikaripura

---

---

---

---

Hosanagara

---

---

---

---

Thirthahalli

---

---

Kunigal

Turuvekere

Tumkur

---

---

Madhugiri

Koratagere

Tiptur

---

---

Gubbi,

Chikkanaya-kanahalli

---

---

---

Sira

---

---

---

---

Pavagada

---

---

---

---

Chamaraja-nagar

Gundlupet

Yelandur

---

Kollegal

---

Kadur

Chikka - magalore

-----

---

44

12

13

D Kannada

Hassan

Kodagu
14

Mandya
15

16

Mysore

Industrial Policy 2014-19 Final Draft

---

---

---

Tarikere

---

---

---

Shringeri

---

---

---

Mudigere

---

---

---

Koppa

---

---

---

N R Pura

---

---

---

---

---

---

Bantwal

---

---

---

Puttur

---

---

---

Sulya

---

---

---

Belthangadi

---

---

Arakalgud

Hassan

---

---

---

Arasikere

---

---

---

C R Patna

---

---

---

H N Pura

---

---

---

Belur

---

---

---

Alur

---

---

---

Sakleshpura

---

---

---

Madikeri

---

---

---

Somwarpet

---

---

---

Virajpet

---

---

Malavalli

Mandya

---

---

Nagamangala

Maddur

---

---

K R Pet

Srirangapatna

---

---

---

Pandavapura

---

H D Kote

Hunsur

Mysore (excl.

Mangalore
(excl. Corpn.limits)

Mangalore
Corporation limits)

(only

Mysore (only Corporation

45

Corpn. limits)

Udupi

17

Periapatna

limits )

---

---

T N Pura

---

---

---

Nanjangud

K R Nagara

---

---

---

---

Udupi

---

---

---

---

Kundapura

---

---

---

---

Karkala

---

Bellary

---

---

---

---

Hospet

---

---

---

---

Siraguppa

---

---

---

---

H B Halli

---

---

---

---

Hadagalli

---

---

---

---

Sandur

---

---

---

---

Kudligi

---

---

---

---

Bidar

---

---

---

---

Bhalki

---

---

---

---

Humnabad

---

---

---

---

B Kalyana

---

---

---

---

Aurad

---

---

---

---

Gulbarga

---

---

---

---

Sedam

---

---

---

---

Chitapur

---

---

---

---

Afzalpur

---

---

---

---

Aland

---

---

---

---

Chincholi

---

---

---

---

North Karnataka Region

18

Bellary

Bidar
5

19

Gulbarga
20

Industrial Policy 2014-19 Final Draft

46

21

22

23

24

Yadgir

Koppal

Raichur

Bagalkote

Belgaum

10

25

Bijapur
26

Industrial Policy 2014-19 Final Draft

Jewargi

---

---

---

---

Yadgir

---

---

---

---

Shahapur

---

---

---

---

Shourapur

---

---

---

---

Koppal

---

---

---

---

Gangavathi

---

---

---

---

Kushtagi

---

---

---

---

Yelburga

---

---

---

---

Raichur

---

---

---

---

Sindanorr

---

---

---

---

Manvi

---

---

---

---

Lingasugur

---

---

---

---

Devadurga

---

---

---

---

---

Bilagi

Hunagund

Bagalkote

---

---

---

Badami

Mudhol

---

---

---

---

Jamkhandi

---

---

---

Athani

Belgaum

---

---

---

Gokak

Khanapur

---

---

---

Soundatti

Hukkeri

---

---

---

---

Ramdurga

---

---

---

---

Bailhongal

---

---

---

---

Chikkodi

---

---

---

---

Raibag

---

---

---

---

Bijapur

---

---

Muddebihal

---

---

---

---

B Bagewadi

---

---

---

47

Dharwad
5

27

Gadag
5

28

Haveri
7

29

U Kannada
11
30

TOTAL

176

---

Indi

---

---

---

---

Sindgi

---

---

---

---

---

Kalghatagi

Dharawad

---

---

---

---

Hubli

---

---

---

---

Kundagol

---

---

---

---

Navalgund

---

---

---

Mundargi

Gadag

---

---

---

---

Nargund

---

---

---

---

Ron

---

---

---

---

Shirahatti

---

---

---

Savanur

Haveri

---

---

---

Shiggaon

Ranebennur

---

---

---

Hirekerur

Byadagi

---

---

---

---

Hanagal

---

---

---

Supa

Karwar

---

---

---

Bhatkal

Haliyal

---

---

---

---

Sirsi

---

---

---

---

Mundagod

---

---

---

---

Yellapura

---

---

---

---

Honnavar

---

---

---

---

Ankola

---

---

---

---

Siddapura

---

---

---

---

Kumta

---

31

18

35

88

Note:Notified Industrial Areas means final notification issued by the Govt. for acquisitions of land as on effective date of this policy.
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11. Annexure 2
11.1.

Attractive Standard & Special Package of Incentives and


Concessions

11.1.1.

Investment Promotion Subsidy


a)

Micro Manufacturing Enterprises


Zone 1(Special Zone): 30% Value of Fixed Assets (VFA) (max. INR17.5 lakh)
Zone 2: 25% Value of Fixed Assets (VFA) (max.INR 15 lakh)
Zone 3: 20% Value of Fixed Assets (VFA) (max.INR12.5 lakh)
Zone 4: 15% Value of Fixed Assets (VFA) (max.INR 10 lakh)
Zone 5: Nil

b)

Small Manufacturing Enterprises


Zone 1(Special Zone) a) For investment in Fixed Assets upto 150.00 lakh 25% VFA (max. INR 37.50 lakh)
b) For investment in Fixed Assets between 151.00-250.00 lakh 25% VFA (max. INR 62.50 lakh
c) For investment in Fixed Assets between 251.00 -500.00 lakh 25% VFA (max. INR 85.00 lakh)
d) For investment in Fixed Assets above 500.00 lakh 25% VFA (max. INR 100.00 lakh)
Zone 2: a) For investment in Fixed Assets upto 150.00 lakh 20% VFA (max. INR 30.00 lakh)
b) For investment in Fixed Assets between 151.00-250.00 lakh 20% VFA (max. INR 50.00 lakh)
c) For investment in Fixed Assets between 251.00 -500.00 lakh 25% VFA (max. INR 65.00 lakh)
d) For investment in Fixed Assets above 500.00 lakh 25% VFA (max. INR 80.00 lakh)
Zone 3: a) For investment in Fixed Assets upto 150.00 lakh 15% VFA (max. INR 22.50 lakh)
b) For investment in Fixed Assets between 151.00-250.00 lakhs 15% VFA (max. INR 37.50 lakhs)
c) For investment in Fixed Assets between 251.00 -500.00 lakh 25% VFA (max. INR 50.00 lakh)
d) For investment in Fixed Assets above 500.00 lakh 25% VFA (max. INR 65.00 lakh)
Zone 4: a) For investment in Fixed Assets upto 150.00 lakhs 10% VFA (max. INR 15.00 lakhs)
b) For investment in Fixed Assets between 151.00-250.00 lakhs 10% VFA (max. INR 25.00 lakhs)
c) For investment in Fixed Assets between 251.00 -500.00 lakh 25% VFA (max. INR 40.00 lakh)
d) For investment in Fixed Assets above 500.00 lakh 25% VFA (max. INR 50.00 lakh)
Zone 5: Nil

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c)

Medium Manufacturing Enterprises (those who employs minimum 25 workers)


Zone 1(Special Zone): INR 1.25 Crore
Zone 2: INR 1.00 Crore
Zone 3: INR 75 lakhs
Zone 4: Nil
Zone 5: Nil

d)

Additional subsidy to Women, Minority , Physical challenged and Ex-Servicemen Entrepreneurs as under:
Additional subsidy of 5% subject to maximum of INR 2.00 lakhs, 5.00 lakhs and INR 7.5 lakhs for Micro,
Small and Medium manufacturing enterprises respectively.
Note:
(i)

Subsidy sanctioned amount will be released in 2 to 4 instalments depending upon the funds allotted
by the Govt.

(ii) This incentive is available to enterprises availing term loan for acquisition of Fixed Assets, where the
term loan amount shall not be less than 50% of approved assets by the Financial Institutions.
(iii) The Enterprise shall apply for sanction of subsidy within one year of the commercial production
(iv) The unit shall avail the sanctioned subsidy within the period of five years.

11.1.2.

Investment Promotion Subsidy for SC / ST entrepreneurs.


a)

Micro Manufacturing Enterprises


Zone 1(Special Zone): 40% Value of Fixed Assets (VFA) (max. INR 25 lakhs)
Zone 2: 30% Value of Fixed Assets (VFA) (max.INR 20 lakhs)
Zone 3: 25% Value of Fixed Assets (VFA) (max. INR17.5 lakhs)
Zone 4: 20% Value of Fixed Assets (VFA) (max.INR 15 lakhs)
Zone 5: 10% Value of Fixed Assets (VFA) (max.INR 10 lakhs)

b)

Small Manufacturing Enterprises


Zone 1(Special Zone): a) For investment in Fixed Assets upto 150.00 lakh 30% VFA (max. INR 45.00 lakh)
b) For investment in Fixed Assets between 151.00-250.00 lakh 30% VFA (max. INR 70.00.00 lakh
c) For investment in Fixed Assets between 251.00 -500.00 lakh 30% VFA (max. INR 95.00 lakh)
d) For investment in Fixed Assets above 500.00 lakh 30% VFA (max. INR 110.00 lakh)
Zone 2: a) For investment in Fixed Assets upto 150.00 lakh 25% VFA (max. INR 37.50 lakh)
b) For investment in Fixed Assets between 151.00-250.00 lakh 25% VFA (max. INR 60.00 lakh)
c) For investment in Fixed Assets between 251.00 -500.00 lakh 25% VFA (max. INR 75.00 lakh)
d) For investment in Fixed Assets above 500.00 lakh 25% VFA (max. INR 90.00 lakh)

Zone 3: a) For investment in Fixed Assets upto 150.00 lakh 20% VFA (max. INR 30.00 lakh)
b) For investment in Fixed Assets between 151.00-250.00 lakhs Industrial Policy 2014-19 Final Draft

50

20% VFA (max. INR 45.00 lakhs)


c) For investment in Fixed Assets between 251.00 -500.00 lakh 20% VFA (max. INR 60.00 lakh)
d) For investment in Fixed Assets above 500.00 lakh 20% VFA (max. INR 75.00 lakh)
Zone 4: a) For investment in Fixed Assets upto 150.00 lakhs 15% VFA (max. INR 22.50 lakhs)
b) For investment in Fixed Assets between 151.00-250.00 lakhs 15% VFA (max. INR 35.00 lakhs)
c) For investment in Fixed Assets between 251.00 -500.00 lakh 15% VFA (max. INR 50.00 lakh)
d) For investment in Fixed Assets above 500.00 lakh 15% VFA (max. INR 60.00 lakh)
Zone 5: 10% Value of Fixed Assets (VFA) (max.INR 15 lakhs)
Medium Manufacturing Enterprises (those who employs minimum 25 workers)
Zone 1(Special Zone): INR 1.5 Crore

Zone 2: INR 1.25 Crore


Zone 3: INR 1.00 Crore
Zone 4 :INR 75.00 Lakhs
Zone 5 :INR 50.00 Lakhs
Notes:
(v) Subsidy sanctioned amount will be released in 2 to 4 instalments depending upon the funds allotted
by the Govt.
(vi) This incentive is available to enterprises availing term loan only, where the term loan amount shall
not be less than 50% of approved fixed assets only.
(vii) The Enterprise shall apply for sanction of subsidy within one year of the commercial production
(viii) The unit shall avail the sanctioned subsidy within the period of five years.

11.1.3.

Exemption from Stamp Duty


MSME, Large, Mega, Ultra Mega, Super Mega Enterprises
Stamp duty to be paid in respect of (i) loan agreements, credit deeds, mortgage and hypothecation deeds
executed for availing loans from State Govt. including VAT loan from Department and / or State Financial
Corporation, Industrial Investment Development Corporation, National Level Financial Institutions, Commercial
Banks, RRBs, Co-operative Banks, KVIB / KVIC, Karnataka State SC/ST Development Corporation, Karnataka
State Minority Development Corporation and other institutions which may be notified by the Government from
time to time for the initial period of five years only and (ii) for lease deeds, lease-cum-sale and absolute sale
deeds executed by industrial Enterprises in respect of industrial plots, sheds, industrial tenements, by KIADB,
KSSIDC, KEONICS, KSIIDC, Industrial Co-operatives and approved private industrial estates (iii) for lease deeds,

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lease cum sale and absolute sale deed executed by developer in respect of lands purchased for development of
private industrial estates / park shall be exempted as below:
Zone 1(Special Zone): 100%

Zone 2: 100%
Zone 3: 100%
Zone 4: 75% for general category and 100% for SC/ST entrepreneurs
Zone 5: Nil for general category and 75% for SC/ST entrepreneurs in the notified industrial areas only.

11.1.4.

Concessional Registration Charges


MSME, Large, Mega, Ultra Mega, Super Mega Enterprises
For all loan documents and sale deeds as specified in 2 above, the registration charges shall be at a concessional
rate of Re.1 per INR 1000.
Note:
(i)

The exemption of stamp duty and concessional registration charges are also applicable to lands
purchased under Section 109 of the KLR Act nd also for direct purchase of industrially converted lands
for the projects approved by SHLCC / SLSWCC / DLSWCC. This incentive will also be applicable for the
land transferred by KIADB to land owners as compensation for the acquired land.

(ii) The exemption of stamp duty and concessional registration charges are also available for registration
of final sale deed in respect of lands, sheds, plots, industrial tenements after the expiry of lease period
at the rate as specified in the Industrial Policy which was in vogue at the time of execution of leasecum-sale deed.

11.1.5.

Refund of Land Conversion Fine


MSME, Large, Mega, Ultra Mega, Super Mega Enterprises
The payment of land conversion fee for converting the land from agriculture use to industrial use including for
development of industrial areas by private investors will be refunded as detailed below:
Zone 1(Special Zone): 100%

Zone 2: 100%
Zone 3: 100%
Zone 4: 75% for general category and 100% for SC/ST entrepreneurs
Zone 5: Nil

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11.1.6.

Exemption from Entry Tax


MSME, Large, Mega, Ultra Mega, Super Mega Enterprises
In Zone 1(Special Zone), 2, 3 & 4 for all category and Zone 5 for SC / ST only in notified industrial areas and also
all 100% EOUs and EOUs with 25% export obligation in the entire area of Zone 5. 100% exemption from
payment of ET on Plant & Machinery and Capital Goods for an initial period of 3 years from the date of
commencement of project implementation. For this purpose, the term Plant & Machinery and Capital Goods
also includes Plant & Machinery, equipment etc. including machineries for captive generation of Electricity.
On raw materials, inputs, component parts & consumables (excluding petroleum products) [wherever applicable]
for a period of 5 years from the date of commencement of commercial production.
In respect of Mega, Ultra Mega and Super Mega Enterprises, Additional One, Two and Three years will be
allowed respectively for operational period. Besides, Mega, Ultra Mega and Super Mega Enterprises projects
implemented in phases, with the approval of the Government, each phase will be treated as new units for
exemption of entry tax.

11.1.7.

Anchor unit Subsidy


Anchor unit subsidy of 2% - Zone -1(Special Zone); 1.5%- Zone-2&3, and 1% in Zone-4 of fixed investment shall
be offered for the first two manufacturing Enterprises with minimum investment of INR100 crore and minimum
employment of 100 persons in each of the taluks with a cap of Rs.3 Crore in Zone -1(Special Zone), Rs. 2 Crore
in Zone 2 & Zone 3 and Rs.1 Crore in Zone 4.
Anchor Unit subsidy will be applicable only in Taluks where no industrial enterprises of the above size exist
at present.

11.1.8.

Subsidy for setting up ETPs


MSME, Large, Mega, Ultra Mega, Super Mega Enterprises and Private Industrial Area Layouts:
One time capital subsidy upto 50% of the cost of Effluent Treatment Plants (ETPs) in respect of Zone 1(Special
Zone), 2, 3 & 4, subject to a ceiling of INR100 lakhs per in respect of MSME, Large and INR2.00, INR3.00
&INR4.00 Crores in respect of Mega, Ultra Mega and Super Mega manufacturing enterprise respectively.

11.1.9.

Reimbursement of partial net VAT as Interest Free Loan / Grant


MSME, Large, Mega, Ultra Mega & Super Mega Enterprises:
All MSME, Large, Mega, Ultra Mega & Super Mega Enterprises established in Zone 1(Special Zone), 2, 3 & 4
shall be refunded with partial net VAT as either Interest free loan or grant according to choice / option of the
industry :

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Investment range on

Min. Direct Emp. (Nos.)

Quantum of interest free loan

Quantum of grant

50% of assessed net VAT for initial 4

25% of the net VAT paid will be

yrs. subject to the max. of 100% of

refunded as grant for a period of

total value of fixed assets.

4 years subject to maximum of

fixed assets
(INR cr.)
MSME

----

50% of the total fixed assets


Repayment of the loan shall be in 3
annual

installments

value.

after

moratorium of 4 yrs for each


installments of the loan.
Large Enterprises:

Minimum 50 employment

50% of assessed net VAT for initial 5

20% of the net VAT paid will be

(i.e investment on

for project up to INR50.00

yrs. subject to the max. of 100% of

refunded as grant for a period of

fixed assets up to

crores and additional 25

total value of fixed assets.

5 years subject to maximum of

INR250 Crores)

employment for every INR


50 cr. investment.

Mega Enterprises :
(i.e investment on
fixed assets above
INR250 Crores up to
INR500 Crores)

Repayment of the loan shall be in 3


annual installments after 5 yrs.

50% of the total fixed assets


value.

Minimum 150 employment

50% of assessed gross VAT for initial

20% of the net VAT paid will be

for

6 yrs. subject to the max. of 75% of

refunded as grant for a period of

total value of fixed assets.

5 years subject to maximum of

investment

INR300

crores

up

to
and

additional 25 employment

50% of the total fixed assets

for every INR 50 cr.

value.
Repayment of the loan shall be in 3

investment.

annual installments after 6 yrs.

Ultra

Mega

Enterprises :
(i.e investment on
fixed assets above
INR500 Crores up to
INR100 Crores)

Super

Mega

Enterprises :
(i.e investment on

Minimum 250 employment

25% of assessed gross VAT for initial

15% of the net VAT paid will be

up to

7 yrs. subject to the max. of 50% of

refunded as grant for a period of

total value of fixed assets.

6 years subject to maximum of

investment of

INR600 Crs and additional


25 employment for every
INR100

Crs

50% of the total fixed assets

additional

investment

value.
Repayment of the loan shall be in 4
annual instalments after 7 yrs.

Minimum 400 employment

25% of assessed gross VAT for initial

15% of the net VAT paid will be

up to Rs 1100 Crs and

10 yrs. subject to the max. of 50% of

refunded as grant for a period of

additional 25 employment

total value of fixed assets.

8 years subject to maximum of

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Investment range on

Min. Direct Emp. (Nos.)

Quantum of interest free loan

Quantum of grant

fixed assets
(INR cr.)
fixed assets above

for every INR 100 Crs

INR1000 Crores)

additional investment

50% of the total fixed assets


Repayment of the loan shall be in

value.

4 annual installments after 10 yrs.

11.1.10.

Interest Subsidy
Micro and Small manufacturing enterprises:
Interest subsidy @ 5% & 3% on term loans to Micro and Small respectively. The interest subsidy is payable only
on the interest actually paid to financial institutions and not defaulted in payment of principle or interest
installments. The amount of interest subsidy will be effective rate of interest (after deducting interest subsidy)
receivable by any institutions / under any Govt. of India scheme or 5% per annum whichever is less). The period
of interest subsidy is 6 years, 5 years and 4 and 3 years in Zone -1(Special Zone), Zone 2, Zone 3 & Zone 4,
respectively.

11.1.11.

Exemption from Tax on Electricity Tariff


Micro, Small & Medium Mfg. Enterprises
100% exemption of tax on electricity tariff for the initial period of Six years, five years, four years and three years
in Zone -1(Special Zone), Zone-2, Zone-3 and Zone 4, respectively.

11.1.12.

Power Tariff concessions


Micro enterprises in Zone -1(Special Zone) and 2 with power connection up to 10 HP will be extended with refund
facility of power tariff to an extent of INR1.00 per unit, for a period of 3 years.

11.1.13.

Technology Upgradation, Quality Certification and Patent Registration


Micro, Small & Medium Mfg. Enterprises
(i)

Interest Subsidy on TU Loan:

Zone -1(Special Zone), 2 &3 : 5 % on loans availed from KSFC, KSIIDC &
are not covered under
(ii)

Scheduled commercial banks, which

CLCSS of GOI.

ISO series certification:

Zone -1(Special Zone), 2, 3 & 4: 75% of cost (max.INR75,000).


(iii)

BIS Certification:

50% of fees payable to BIS (max. INR20,000) and 25% of cost

(max.INR50,000) for purchase of testing

equipments as approved by BIS.

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(iv)

Patentregistration:

75% of cost of fees payable to Patent Office (max. INR1.25 lakhs) and 50% of cost (max.INR75,000) towards
attorney fees, patent
(v)

search etc.

Technology Adoption:

25% of cost (max.INR50,000) for adopting technology from


(vi)

11.1.14.

recognized national laboratories.

Technology Business Incubation Centre: 25% of the project cost (Max:INR50 lakhs).

Water harvesting / Conservation Measures


Small & Medium Mfg. enterprises in all Zones.

11.1.15.

(i)

Rain water harvesting

: 50% of cost (max. INR 1 lakh)

(ii)

Waste water recycling

: 50% of cost (max. INR 5 lakh)

(iii)

Zero discharge process: 50% of cost (max. INR 5 lakh).

Energy Conservation
Micro, Small & Medium mfg. enterprises in all zones.
Practicing Energy Conservation measures resulting in reduction of Energy Consumption of atleast 10% of earlier
consumption: 10% of capital cost (max INR5 lakh).
Use of non-conventional energy sources: 10% of capital cost (max. INR5 lakh).
Subsidy of Rs.0.50 per unit of Captive Power Generated and consumed through Solar & Wind Energy sources
only.

11.1.16.

Support to Sugar Sector


New Sugar units / Existing Sugar factories taking up expansion set up with cogeneration plants will be provided
interest free loan to the extent of purchase tax to be paid on the sugarcane during first 5 years of the operations.
In respect of expansion the interest free loan will be provided to extent of the purchase tax paid on the sugarcane
crushed over and above the pre-expansion crushing capacity.

11.1.17.

Additional Package of Incentives & Concessions to focused manufacturing sectors

A. Aerospace sector :
As per Aerospace Policy
B.

Automotive / Steel / Cement / Agro based / Tool room sector to Mega, Ultra Mega and Super Mega
projects.

(i)

Electricity duty exemption is available to Large, Mega, Ultra Mega and Super Mega projects for a period of
(06) six years, (07) seven years, (08) Eight years & (09) Nine years, respectively.

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(ii) CST paid will be refunded to an extent of 60% for a period of 7, 8, 9 and 10 years in respect of Large, Mega,
Ultra Mega and Super Mega Industries respectively.
(iii) Entry tax exemption during operational period (excluding petroleum products) will be extended with
additional one year over and above the standard package of incentives and concessions.
(iv) In respect of Mega Industries Interest free loan to the extent of 40% of the Gross Vat generated by the unit
for 08 (eight) years to be repaid in (08) eight equal annual instalments starting from 09th year. (This is in lieu
of provisions in 2009-14 policy.)

11.1.18 Special Package of Incentives & Concessions


Special package of Incentives over and above the standard package will be offered for Mega, Ultra Mega and
Super Mega projects based on the recommendations of SHLCC depending upon merits and advantages of
such projects for the State.

11.1.19.

Package of Incentives and Concessions for Private Industrial Areas / Estates


To encourage private sector participation in development of industrial estates/ parks following
incentives and concessions shall be offered:
(i)

Equity participation
The State Government will share upto 20% of infrastructure cost to a maximum of INR10 crore
per project as its equity in capital investment.

(ii) Deferred Payment


Bulk land acquired by Government / KIADB will be leased out to the proponent on the basis
deferred payment, to ease the initial burden of the proponent
(iii) Incentives for adopting best practices
Costs incurred for energy efficient initiative and other best practices adopted in the industrial
estates / parks shall be reimbursed as follows:

Energy efficient initiative

25% of the cost subject to a ceiling of INR5 crore per project.

Solar power projects

25 % of the cost subject to a ceiling of INR5 crore per project.

Waste to energy concept

25 % of the cost subject to a ceiling of INR10 crore per project.

Recycling of Water &re-use of treated

25 % of the cost subject to a ceiling of INR10 crore per project.

25 % of the cost subject to a ceiling of INR10 crore per project in

water
Desalination plants

coastal areas
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12. Annexure 3
12.1.

List of Service Enterprises eligible for package of Incentives and


Concession

1.

Logistics facilities supporting to industries only


1.1. Container Freight Station Operators,
1.2. Warehouses,
1.3. Cold Storages and cold chain for logistic support to Food Processing Industry
1.4. Material handling equipment (except transport vehicles and good carriers) )

2.

Material Testing Centre

3.

R & D Centres

4.

Technical testing and analysis servicing

5.

Maintenance and repair of equipment

6.

Packaging services

7.

Refuse disposal services

8.

Tailoring

9.

Flour mills

10. Printing
11. General engineering, fabrication, motor winding, automobile servicing and repairs, electro plating, industrial
paintings, etc., engaged in job work
12. Weigh bridges and health care facility set up within the KIADB /

KSSIDC industrial areas

13. State Level Co-ordination Committee is empowered to add / delete service activities listed in this Annexure.

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13. Annexure 4
13.1.

List of Industrial Activities / Enterprises not eligible for Incentives


and Concessions

1
2

Breweries & Distilleries of all types excluding winery


Enterprises utilizing molasses / rectified spirit / denatured spirit as main raw material for
manufacture of potable alcohol

Khandasari and Jaggary making enterprises

Photo Studios & Color Processing Enterprises

Photo Copying & Xerox Machines

Fertilizer Mixing

Re-packing of Drugs / Medicines / Chemicals, without any processing or value addition

All types of Saw Mills

Beedies / Cigarettes / Cigars / Gutka & Tobacco based products

10

Azoic / Reactive Dyes

11

Fire Crackers

12

Industries manufacturing and or utilizing Ozone depleting substances

13

Power Laundries

14

Brick making Enterprises Excluding Cement Hallow Blocks, wire cut & fly ash bricks and Refractory
bricks

15

Poultry excluding hatcheries

16

Popcorn, Ice Cream, Kulfi& Ice candy making Enterprises

17

Coffee Roasting and Grinding

18

Clock and Watch Repair shops

19

Cassette recording [Audio & video]

20

Cyanide

21

Mining

22

Lime kiln / burnt lime

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23

Hotels and motels

24

X-ray clinics and clinical / pathological laboratories and scanning, M.R.I. tests

25
26

All industries of mobile nature like rigs, concrete mixing plants, hot mix plants including site oriented
industries.
Manufacture of Chrysolite Asbestos (White crystal)

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14. Annexure 5
Definitions and Terms &Conditions

14.1.

1. Definitions
a)

As per the MSMED Act, 2006,ManufacturingEnterprises have been defined based on of investment in
plant and machinery and classified into:

b)

Micro Enterprises - Investment uptoINR25 lakhs

Small Enterprises - Investment above INR25 lakh and uptoINR500 lakhs.

Medium Enterprises - Investment above INR500 lakhs and uptoINR1,000 lakhs.

As per the MSMED Act, 2006, Service Enterprises have been defined based on investment equipment
and classified into:

c)

Micro Enterprises - Investment uptoINR10 lakh

Small Enterprises - Investment above INR10 lakh and uptoINR200 lakhs.

Medium Enterprises - Investment above INR200 lakhs and uptoINR500 lakhs.

Large Scale Industry:


An Industrial Unit which is not classified as Micro, Small and Medium Enterprise and with investments
uptoINR 250 cr. shall be classified as large scale industry.

d)

Mega Project:
Projects with an investment on fixed assets above INR250 crores and up to INR500 crores

e)

Ultra Mega Project:


Projects with an investment on fixed assets above INR500 crores and up to INR1000 crores.

f)

Super Mega Project:


Projects with an investment on fixed assets above INR1000 crores

g)

100% Export Oriented Enterprises [Export Oriented Enterprises]


A 100% Export Oriented Enterprises is one which undertakes to export its entire production of goods
subject to relaxation as permitted by Govt. of India from time to time. Such Enterprises may be set up
either under the Export Oriented Enterprises or under EPIP [Export Promotion Industrial Park] Scheme
or under the EHTP [Electronic Hardware Technology Park] Scheme or Software Technology Park
Scheme or Special Economic Zone.

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h)

Fixed Asset:
Fixed assets shall mean the total investment made on land, building and plant and machinery and
such other productive assets like tools, jigs, and fixtures, dies, utilities like boilers, compressors, diesel
generating sets, cranes, material handling equipments and such other equipments directly related to
production purposes.

2. Sanction of Incentives & Concessions as per this Government Order is Subject


to the following terms and Conditions:
a)

All new industrial investments shall create maximum possible additional employment opportunities
and provide a minimum 80% of employment to the local people on an overall basis [100%
employment to local people in case of Group C & D categories will be insisted] and this will be
monitored during disbursement of incentives and concessions.
The above requirements regarding employment to local people will be monitored by the DIC for a
period of 5 years. Failure of the industries to provide employment to local people as stipulated above
will be reported to the concerned DLSWCC/ SLSWCC/ SHLCC, which will recommend for recovery of
incentives and concessions sanctioned to the unit, for which purpose a suitable under-taking will have
to be furnished by the unit concerned before sanctioning incentives and concessions.

b)

These incentives and concessions shall not be available for the Enterprises listed in Annexure 4
irrespective of the location.

c)

The incentives and concessions as per this Government Order shall be applicable only to all new and
additional investments made on or after 01.04.2014.

d)

The incentives and concessions under this policy will be available to all new investments both for
establishment of new Enterprises or for expansion, diversification and modernization of existing
industries. To be eligible for considering as expansion / diversification / modernization, enterprises
shall make an additional investment of at least 50% of the original investment of the existing unit
(Original investment mean, the investment prior to first sale Invoice raised for the initial investment).
However, while calculating the investment promotion subsidy for expansion / diversification /
modernization enterprises, the subsidy sanctioned for the original investment need not be taken
for calculating the eligible subsidy.

e)

The quantum of investment subsidy shall be computed on the value of fixed assets as approved by the
financial institutions or commercial banks.

f)

The definition of Micro, Small, Medium Enterprises and Large Scale Industry as indicated above shall
automatically stand revised as and when Government of India makes any changes in such definition
and benefits under this package shall be available to the Micro, Small, MediumEnterprises and Large
Scale Industry as per the new definition from the respective dates.

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g)

The validity of incentives and concessions as per this order shall be for a period of five years from
st

st

1 April 2014 [i.e., upto31 March 2019].


h)

Wherever industrial Enterprises avail subsidy / interest subsidy under any of other policies of the of
Govt. of Karnataka / Govt. of India, they will continue to avail the benefit in that policy only and they
are not eligible benefit under this policy.

i)

Incentives and concessions under this policy shall be available only for manufacturing Enterprises.
However, specified categories of industry related service enterprises as listed in Annexure 3 shall also
be eligible for incentives and concessions as per this order.

j)

st

The incentives and concessions under this policy will come into force from 1 April 2014. With the
announcement of this policy, all other Industrial Policies announced earlier stands withdrawn.
However, industrial Enterprises which have already been sanctioned incentives and concessions under
the earlier package/ Government Order shall continue to enjoy those benefits as per the sanction order
already issued.

k)

Industrial Enterprises which are in the process of being established at the time of announcement of this
Industrial Policy 2014-19, shall have an option of availing incentives and concessions under the 200914 policy provided; loan is sanctioned by the financial institution prior to 01.04.2014 and subject to
fulfillment of all the following conditions.
1)

Sanction of Term Loan should be before 01.04.2014 and first release of term loan
shall be 30.6.2014.

2)

50% of the investment on fixed assets should have completed before 30.9.2014.

3)

Such Enterprises shall commence commercial production on or before 31.12.2014

The above option should be exercised prior to 31.12.2014 and should be registered with Commissioner
for Industrial Development and Director of Industries and Commerce, Bangalore or in Office of the
concerned District Industries Centres with necessary documentary evidence. Options once exercised
cannot be withdrawn and shall be binding. Enterprises which do not exercise such option prior to
31.12.2014shall automatically be governed by the provisions of this order. However the total
investment shall be taken into consideration irrespective of period of investment i.e., before or after 0
1-04-2014 under one eligible policy only. However theStamp Duty Exemption and

Entry Tax

Exemptions granted during 2009-14 policy at the time of implementation of the project will continue
and for other incentives, the industrial policy as applicable in terms of above procedures, holds good.
All eligible Enterprises under 2014-19 policy shall submit application for sanction of incentives before
the concerned District Industries Centres within a period from one year from the date of
commencement of commercial production. Enterprises who fail to comply this deadline will not be
eligible for investment subsidy.

Industrial Policy 2014-19 Final Draft

63

l)

Incentives and concessions for investments in the IT / BT / Tourism / Wine Sector / Neera processing
sector / Infrastructure Development sector / Textiles / Renewable Energy / Aero Space / Pharma etc.
will however continue to be governed by the respective policies of the Government.

m) Unit shall avail incentives and concessions under one Industrial Policy only unless otherwise specified.
However industries which were in the process of implementation at the time of announcement of this
policy and availed benefits like Stamp duty exemption on land allotment and Entry tax exemption for
implementation period in the earlier policy, are eligible to avail the other benefits under the current
policy subject to fulfilling the condition as explained at (J) above.
n)

The Stamp duty exemptions, Entry tax exemptions and Exemption on tax on electricity tariff as per
this policy are applicable to eligible enterprises only after the issual of notifications from the Revenue,
Finance and Energy Departments, respectively.

o)

Separate guidelines for administration of these incentives and concessions will be issued for the
guidance of the concerned agencies and officers with the approval of the State Level Coordination
Committee under the Chairmanship of the Principal Secretary to Government, C&I Department.
Interpretation of Government Orders (including of previous policies) and the decision thereon of this
State Level Coordination Committee shall be final.

Terms & Conditions for Private Industrial Areas / Estates


1.

Private Industrial areas / estates shall be developed :


a. By Private individuals, Companies, Co-operative Societies and Associations
b.

2.

By Public Private Partnership

Proposals for development of private industrial areas / estates will be treated as industrial infrastructure and
approval in accordance with Karnataka Industries Facilitation Act will be accorded by SLSWCC or SHLCC
depending on size of investment.

3.

The Policy is not applicable in Zone 5.

4.

The minimum area / extent of land shall be 200 acres.

5.

The development of industrial area / estate shall be in consistence with the zoning regulations of local LPA or
as per KTCP Act and others in practice.
a.

The master plan / layout plan of private industrial area / estates shall be approved by a committee
constituted under the Chairmanship of Deputy Commissioner comprising of JD, DIC, Environmental
Officer, KSPCB, Assistant Director, Factories and Boilers, Rep. of KIADB and KSSIDC, with District
Town Planning Officer as Member Secretary.

b.

The building plans in individual plots shall be approved by concerned local authorities.

Industrial Policy 2014-19 Final Draft

64

6.

Size of the plots in a private industrial area shall be invariably 1/4 acre, 1/2 acre, 1 acre, 1.5 acres & 2 acres
and above.

7.

Preference of up to 20% shall be given to MSME sector in the allotment of land / sheds in private industrial
area / estate with first right of refusal.

8.

The developers shall adopt a scientific method for fixation of price to make available the infrastructure at
reasonable rates.

9.

The developers of private industrial areas shall comply with siting guidelines of MOEF.

10. Private Industrial Areas / Estates developed on PPP basis shall reserve 22.5% of plots / sheds for SC / ST
entrepreneurs with first right of refusal.
11. The proponent of private industrial layouts need to:
a.

Prepare HRD plan to train the land losers / local persons and organise training programmes for such
people and also provide employment to those persons.

b.

Provide atleast 80% of job to local people on overall basis.

c.

Prepare a vendor development plan and facilitate setting up service / manufacturing vendor
enterprises.

d.

Prepare a plan for adequate social infrastructure and public amenities for the project affected
persons.

12. Proponent is liable to pay back all the fiscal benefits availed under this Policy to the Government in case the
project is not implemented as per Schedule.
13. The Government land allotted for private industrial areas / estates will be resumed upon non implementation.

Industrial Policy 2014-19 Final Draft

65

15. Annexure 6
Important contacts

15.1.

Contact Address

Contact Address
Commissioner for Textile Development

Principal

Secretary

Commerce

and

Room

No.1

to

Industries

06,

1" floor,

Government

and

Department,

Director of Handlooms & Textiles

VikasaSoudha,

No. 14/3A, 3'" floor, RashtrothanaParishat

Dr. AmbedkarVeedhi, Bangalore 560001.

Building,

Phone: 22252443

N.P. Road, Bangalore.

Fax: 22259870

Ph: 080 22271628 Fax: 080 22226082

E-mail: prs-ci@karnataka.gov.in

E-mail:

texcomgok@yahoo.co.in

Website:

. website: www.karnatakaindustry.gov.in

www.textiles.kar.nic.in
Principal Secretary to Government

Commissioner

Department of IT & BT and Science and


Technology,
Government of Karnataka, VI floor, 5th Stage,
M. S. Building, Dr. B.R. AmbedkarVeedhi,
Bangalore 560001.
Ph:

080-2228

Fax:

080

Bangalore Development Authority


T. Chowdaiah Road, Kumarapark
west,
Bangalore 560020.
Ph: 080 2336 0843 Fax: 080 2334 5799

0562,

22288340,

E-mail:

22032434
22262450

E-mail: com@bdabangalore.org website:


www.bdabangalore.org

itsec@bangaloreitbtin

Website:www.bangaloreitbitin
Secretary,

Water

VikasaSoudha,

Dr.

Resources
B.R.

Department,

Ambedkar

Road,

080

2225

Bangalore

Metropolitan

Region

Development

Bangalore 560 001.


Ph:

Commissioner

5524,

2225

5306

Authority (BMRDA)

Fax: 080 2254 2753

#1, Ali Askar Road, Bangalore 560 052.

E-mail:

E-mail: mc_bmrda@kar.nic.in

secyirr@secretriat2.kar.nic.in

http://waterresources.kar.nic.in
The

Secretary

to

Website: www.bmrda.kar.nic.in
Government

Managing Director

(Environment to Ecology)

Karnataka State Industrial Investment

Department of Forest Environment & Ecology

&

Room NO.708, Gate 2, Multi Storie Building,

Development Corporation Limited,

Industrial Policy 2014-19 Final Draft

66

Contact Address

Contact Address

Dr. AmbedkarVeedhi, Bangalore 560 001.

4th

Ph:

080

22254377,22092445

Fax:

080

floor,

East

Entrance,

KhanijaBhavan,

Bangalore

22254377

560001.

E-mail: secyenv-fee@karnataka.gov.in

Ph: 080 22255911 Fax: 080 22255740

Website: www.parisara.kar.nic.in

E-mail: ksiidc@bgl.vsn.net.in
Website: www.ksiidc.com

Commissioner for Industrial Development and


Director of Industries and Commerce
2"" floor, Khanijabhavan, Race Course Road,
Bangalore 560001.
Ph: 080 2223 8679 Fax: 080 22389909
E-mail:

The Chief Executive Officer and Executive


Member
Karnataka Industrial Areas Development Board,
II floor, RashtrothanaParishatBhavan,
14/3A

Nrupathunga

Road,

Bangalore

560001.
Ph: 080 2221 1066 Fax: 080 2221 7702

commissioner@karnatakaindustry.gov.in

E-mail: kiadb@bgl.vsnl.net.in

Website: www.karnatakaindustry.gov.in

Website: www.kiadb.in
Managing Director

Director, Department of Mines and Geology,

Karnataka

No. 49, KhanijaBhavan, Race Course Road,

Development

Bangalore 560 001.

Corporation Limited

Ph:

080

22269632,22269633

Fax:

080

State

Small

Industries

Industrial Estate, Rajajinagar,

22269632

Bangalore 560010.

E-mail: director@blr.vsnl.com

Ph: 080 23303037,2221 7702 (Board)

Website. www.mines.kar.nic.in

E-mail: kssidcho@vsnl.com
Website: www.kssidc.kar.nic.in
Chairman
Karnataka State Pollution Control

Commissioner for Labour


"KarmikaBhavan",

Board

Bannerghatta

Road,

Bangalore 560029.
Ph:

080

26531252

No.49, ParisaraBhavan,Church Street,


Bangalore 560 001.

Fax:

080

26531254

Ph: 080 25588151,25589111,112,113

E-mail: ico@kar.nic.in

Fax: 080 2558 6321

Website: http://labour.kar.nic.in

E-mail:

kspcb@kar.nic.in

website: www.kspcb.kar.nic.in

Industrial Policy 2014-19 Final Draft

67

Contact Address

Contact Address

The Managing Director


Visvesvaraya Trade Promotion Centre

Managing Director

III Floor, VTPC Building, Kasturba Road,


Hubli Electricity Supply Company

Bangalore 560 001.


Phone:

22864281/22860853

Fax:

91-80-

Navanagar, P.B. Road, Hubli 580 029.


Ph: 0836-2324811 Fax: 0836-2324813

22864281

E-mail: ceehubli@rediffmail.com

Grams: VITRO

website: www.hescom.co.in

E-mail: vtpckarnataka@gmail.com
Website: www.vitcblr.org
Managing Director

Managing Director

Karnataka UdyogMitra

Gulbarga Electricity Supply Company Limited

3'" floor, South Block, KhanijaBhavan, Race


Course

GESCOM)
Corporate Office, Railway Station Main road,

Road, Bangalore 560 001.

Gulbarga 585 102

Ph: 080 2228 2392 / 5659 / 6632

Ph: 08472-256581 Fax: 08472-456842

Fax: 080 22266063

E-mail: mdgesco@gmail.com

E-mail: md@kumbangalore.com

website: www.gesco.in

Website: www.kumbangalore.com
Managing Director

Managing Director
Karnataka Power Transmission Corporation
Ltd.
Cauvery Bhavan, K.G. Road, Bangalore 560
009.

Supply

Company Limited(MESCOM)
Corporate Office, Paradiym Plaza,
5"floor,
Ph:

Fax: 080 2211 0134

0824-2444300

Fax:

0824-

2444360

E-mail: md@kptcl.com

E-mail: md@mesco.in

website: www.kptcl.com

website: www.mesco.in

Managing Director
Electricity

Electricity

AB Shetty Circle, Mangalore 57500.

Ph: 080 2221 4342, 2224 3926

Bangalore

Mangalore

Managing Director
Supply

Company

(BESCOM)
Corporate Office, K.R. Circle, Bangalore 560
001.
Ph: 080 22354929 Fax: 080 22354925
E-mail: mdbescom@bescom.org

Chamundeshwari Electricity Supply Corporation


(CESCOM)
No. 927, LJ Avenue, Saraswathipuram,
Mysore 570 009.
Ph: 0821-2417101 Fax: 0821-2417107
E-mail: mdcescmys@rediffmail.com

website: www.bescom.org
Industrial Policy 2014-19 Final Draft

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Contact details of Joint Directors of District Industries Centres, Department of Industries


and Commerce, Government of Karnataka
District

Contact Details
The Joint Director, District Industries Centre,
Room No.135, Administrative Building,

Bagalakote

Navanagar, Bagalakote 587 101.


Off Ph : 08354- 235294/235245, Fax: 235294
E-mail: jd-bagalkote@karnatakaindustry.gov.in
The Joint Director, District Industries Centre,
Rajajinagar Industrial Estate, West of Chord Road,

Bangalore (R)

Bangalore 560 044.


Off Ph: 080 - 23145216/23142151/23142152, Fax :23145216
E-mail: jd-bang-r@karnatakaindustry.gov.in
The Joint Director, District Industries Centre,
1st floor, Rajajinagar Industrial Estate, West of Chord Road,

Bangalore (U)

Bangalore 560 044.


Off Ph : 080 - 23501481, Fax: 080 23501478
E-mail: jd-bang-u@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Belgaum

Udyambagh Belgaum - 590 008.


Off Ph : 2440430/2440852 Fax: 2441209
E-mail: jd-belgaum@karnatakaindustry.gov.in
The Joint Director, District Industries Centre
Hospet Road, Bellary-583 103.

Bellary

Off Ph : 08392 242370/242643/242369, Fax: 242370


E-mail: jd-bellary@karnatakaindustry.gov.in
The Joint Director, District Industries Centre
Beside BUDA office, Naubad, Bidar - 585 401

Bidar

08482/232769/233129 (temporary)
jd-bidar@karnatakaindustry.gov.in
The Joint Director, District Industries
Centre Industrial Estate, Station Back Road,

Bijapur

ShikharaKhana, Bijapur - 586 101.


Off Ph: 08352-250976/257125 Fax: 250607
E-mail: jd-bijapur@karnatakaindustry.gov.in

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District

Contact Details
The Joint Director, District Industries Centre
Room No.323, 3rd Floor, District Office Complex,

Chamarajanagar

B.Rachaiah Double Road,


Chamarajanagar 571 313
Off Ph: 08226-224916/224915, Fax: 224916
E-mail: jd-cmagalur@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Chickmagalur

Near ZillaPanchayat, Kadur Road, Chickmagalur 577 102


Off Ph : 08262-220921/220726 Fax: 220476
E-mail: jd-cnagar@karnatakaindustry.gov.in
The Joint Director, District Industries Centre,

Chickballapur

B BRoad, ATI Building, Chickballapur 562101


Off Ph : 08156-273303/270571, Fax :273302
E-mail: jd-cbalapur@karnatakaindustry.gov.in
The Joint Director, District Industries
Centre Jogimatt Road, Chitradurga - 577 501.

Chitradurga

Ph Off: 08194-235994/235817/235783, Fax :235994


E-mail: jd-cdurga@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Mangalore

Yayyadi, Mangalore 575 008.


Off Ph: 0824-2212494/2214021, Fax: 2212494
E-mail: jd-mangalore@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Davangere

Opp. Church, 10th Main, P.J.Extension, Davangere - 5770 002.


Off Ph : 08192-232052/232053/232051 Fax: 232053
E-mail: jd-dvangere@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Dharwad

Rayapura, Dharwad - 580 009.


Off Ph : 0836-2322986/2322627 Fax: 2322627
e-mail: jd-dharwad@karnatakaindustry.gov.in
The Joint Director, District Industries Centre
District Administrative Building, 2nd Floor,

Gadag

Room No. 221, Hubli Road, Gadag - 582103


Off Ph: 08372-230771/23139 Fax: 230429
E-mail: jd-gadag@karnatakaindustry.gov.in

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District

Contact Details
The Joint Director, District Industries Centre

Gulbarga

M.S.K.Mili Road, Jewarigi Road Cross


Gulbarga - 585 102.
Off Ph : 08472-223988 Fax: 232404
E-mail: jd-gulbarga@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Hassan

Industrial Estate, B.M. Road, Hassan - 573 201.


Off Ph:08172-240606/240289, Fax:240289
E-mail: jd-hassan@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Haveri

Room No.24, B Block, District Administrative


Building, Devagiri, Haveri - 581 110.
Off Ph : 08375-249028/249029 Fax: 249028
E-mail: jd-haveri@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Madikeri

Kohinur Road, Industrial Estate, Madikeri - 571 121.


Off Ph: 08272-228746/228748/228431 Fax: 228746
E-mail: jd-kodagu@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Kolar

DC Office Compound, Kolar- 563101.


Off Ph: 08152-222402/222403 Fax: 224920
E-mail: jd-kolar@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Koppal

Opposite Mayur Hotel, Hospet Road, Koppal 583231.


Off Ph: 08539-231101 Fax: 231548
E-mail: jd-koppal@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Mandya

Near KSFC, Subhasnagar, Mandya - 571 401.


Off Ph: 08232-224098/221358 Fax: 226964
E-mail: jd-mandya@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Mysore

CTI Building Sayyaji Rao Road, Mysore - 570 001.


Off Ph: 0821-2446885/2449810 Fax: 2446885
E-mail: jd-mysore@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Raichur

Hyderabad Road, Raichur - 584 101.


Off Ph: 08532-235646 Fax: 235811

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District

Contact Details
E-mail: jd-raichur@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Ramnagar

Industrial Estate, Ramnagar - 571 511.


Ph: 080-7273008, Fax :7273007
E-mail: jd-ramanagara@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Shimoga

Nehru Road Shimoga - 577 201.


Off Ph: 08182-278302/222802 Fax: 277522
E-mail: jd-shimoga@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Tumkur

Industrial Estate, B.H.Road, Tumkur 572102


Off Ph :0816-2280741/2281485 Fax: 2281562
E-mail: jd-tumkur@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Udupi

VST Road, Jayalakshmi Building, Kalsanka, Udupi 576 101.


Off Ph: 0820-2534338/2522605/2531915 Fax:2534338,
E-mail: jd-udupi@kamatakaindustry.gov.in
The Joint Director, District Industries Centre

Karwar

ShirawadaKarwar - 581 306.


Off Ph : 08382-282302/282367 Fax :282302
E-mail:jd-karwar@karnatakaindustry.gov.in
The Joint Director, District Industries Centre

Yadagir

Yadagir District, YadagirOff Ph: 08472-223988


E-mail:jd-yadagiri@karnatakaindustry.gov.in

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