Approval and Applicability

• Approved on 23 July 2020
• Effective from 13 August 2020
• Duration: 5 years or until a new policy is announced

Vision, Mission, and Objectives

• Promote Development: Focus on tier-2 and tier-3 cities
• Investment and Job Creation: Attract INR 5 lakh crore investment, create 2 million jobs
• Growth Targets: 10% annual growth, third position in merchandise exports in 5 years
• Technology and Innovation: Support technology adoption and innovation
• Alignment: Recent reforms in Land Reforms Act, Labour Act, and Karnataka Industries (Facilitation) Act
• Thrust Areas: Industry 4.0, R&D, Intellectual Property Rights, Technology Adoption, Cluster Development, Sustainable Industrialisation

Key Highlights

• Zones Classification: Districts divided into four zones; incentives for industrially backward areas (Zone-1 and Zone-2)
• Focus Sectors:
  • Automobiles and auto components
  • Pharmaceuticals, medical devices
  • Engineering and machine tools
  • Knowledge-based industries
  • Cement and steel
  • Sugar
  • Logistics
  • Renewable energy
  • Aerospace and defence
  • Electric vehicles
  • Healthcare and wellness
  • Higher education
  • Bio-fuel sector
• Special Investment Regions (SIRs): Planned for Dharwad, Gadag, Haveri, Belagavi, Shivamogga, Davanagere, Chitradurga, Chickamagaluru, Kalaburagi
• Production Turnover-Based Subsidies: For MSMEs to encourage innovation
• Pharma Parks: To be set up in Mangaluru, Yadgiri, Nagamangala, Shivamogga; med-tech zone near Bengaluru
• Renewable Energy: Treated as manufacturing industry for benefits except investment promotion subsidy
• Fiscal Incentives: Include exemptions and subsidies for MSMEs, production turnover-based incentives, and support for various sectors

Labour Law Reforms

• Local Employment: 70% of workforce to be locals, 100% for non-technical and support staff
• Factories Act, 1948: Amendments for night shift registration and extended overtime hours
• Industrial Employment (Standing Order) Act, 1946: Permits fixed-term and contract employment
• Minimum Wage: Periodic revision based on inflation and CPI
• SEZs Relaxation: Similar relaxation for manufacturing as IT/ITeS establishments
• Skill Development: Coordination with Skill Development, Entrepreneurship, and Livelihood Department; formation of State-level body for skill development

Promotion of MSMEs

• “MSME Sarthak” Scheme: Institutional mechanisms for MSMEs, including online platform and Centre of Excellence (CoE)
• Support Areas: Technology upgradation, vendor development, marketing, skill development, and entrepreneurship
• Equity Funding: INR 1 billion fund for SMEs, 75% from Government
• Design Clinic Service Center: For handicraft and khadi sector
• Infrastructure Support: 30% land earmarked for MSMEs by KIADB
• Credit Enhancement Scheme: Pilot project to improve credit risk profile and reduce loan interest rates

Promotion of Large Enterprises

• Unique Package: For large, mega, ultra, and super-mega enterprises
• Invest Karnataka Forum (IKF): For investment facilitation and international promotion
• International Facilitation Desk: One-stop window for investment assistance

Land Availability

• Land Reforms: Amended Karnataka Land Reforms Act, 1961 to ease land procurement and conversion
• Private Industrial Parks: Encouraged, including Integrated, Sector-Specific, and Logistics Parks
• Land Allotment: Reduced from 60 to 45 days; Price Fixation Committee to determine land prices
• Industrial Townships: Existing large areas declared as such

Export Promotion

• Measures: Infrastructure, logistics, international trade fairs, and export awareness

Fiscal Incentives

• Incentives Include:
  • Exemptions and concessional charges
  • Reimbursement of land conversion fee
  • Tax exemptions and subsidies for MSMEs
  • Support for technology upgradation and quality certification
  • Capital subsidies for waste management, pharma parks, and R&D
  • Special incentives for SC/ST, women, minorities, physically challenged, and ex-servicemen

Review and Monitoring

• High-Level Committee: For progress monitoring and policy interpretation
• State-Level Coordination Committee: To address ambiguities in the New Policy