The Government of Karnataka has always been a strong advocate of Industrial liberalisation. The industrial policies of the Government of Karnataka have reflected the Government’s strong desire to ushure in an environment of successful business propositions. The efforts are paying off :
Statistics reveal the industrial sector in Karnataka will witness an upsurge with investments to the tune of Rs 60,000 crore by 2000 A.D
Reserve Bank Of India lists Karnataka as the 3rd largest beneficiary of projects sanctioned by term Lending Institutions in 1993-94.
New Industrial policy: The new Industrial policy’s objective is unambiguous and different from the earlier ones. While the growth objective is a central point, most of the contents of the past have been retained.
A high level committee for expeditious clearance of Mega projects constituted.
A state level single agency set up for clearing projects.
An I.T park with the association of Singaporean investors and Tatas set up.
Attractive Concessions: The Government revised package of incentives & concessions for new industrial investments in the state with effect from Nov.1,1990.
For the purpose of applicability, of this package, the taluks of the State are classified into four zones, as detailed : Zone I: Covering 2 Taluks Zone II: Covering 38 Taluks Zone III: Covering 129 Taluks Zone IV: Covering 6 Taluks and 6 Growth centres to be set up in Hassan,Raichur and Dharwad.
Special concessions to Thrust Sectors: All new tiny, small, medium and large scale industrial units in ‘Thrust Sectors’ shall be eligible for enhanced incentives and concessions as per details given below:
ST(CST & KST) exemptions
Units set up in Zone I Industrial Areas developed by Government. Promoter agencies except in Bangalore Urban Agglomeration and Mysore City Corporation Area.
As applicable to units in Zone II
100% exemption for a period of 3 yrs from the date of commencement of commercial production
Units set up in Zone II areas of Bangalore Urban & Rural Districts
As applicable to units in Zone III
100% exemption for a period of 4 years from the date of commencement of commercial production.
Units set up in Zone III(other than Bangalore Rural & Urban districts)and Zone IV
As applicable to units in Zone IV
100% exemptions for a period of 5 years from the data of commencement of commercial productions.
Units set up in Zone IV
As applicable to units in Zone IV
100% exemptions for a period of 6 years from the date of commencement of commercial production.
To be applicable for special concessions as mentioned above, industrial units will be required to produce a certificate from the Department of Industry & Commerce specifying that they come under the category of Thrust Sector under which the industry is considered and the special concession is given.
Agro-food processing, Agro based industrial High-Tech Packaging units, Cold storages, green houses, tissue culture lab, bio-fertilizers, Bio technology, Compost, Growth regulators, Seed production, Informatics software units (industries set up within the Bangalore Urban Agglomeration ares and Mysore City Corporation areas) in the Tiny and Small Scale sector shall also be eligible for the special concessions as specified in the I st row of above table.
100% EOUs set up in Zone I including Bangalore Urban Agglomeration area and Mysore City Corporation area will be eligible for incentives & concessions as specified in 1st row of above table.
Special concessions for Electronics, Telecom and Informatics (Software) industries to be set up in Mysore & Dharwad.They shall be eligible for investments subsidy as applicable to Zone IV areas. These units shall be eligible for 100% sales tax exemption(KST & CST)on output for a period of 6 yrs. These special incentives are offered in lieu of the normal incentives.
Special concessions for 100% Export Oriented Industries: Vide Government Order No.CI 384 SPC 89 dated 29 November 1989, the following concessions have been extended to 100% EOUs. a)To offer a capital investment subsidy of 10% of the value of fixed assets, subject to a ceiling , to be setup in the EOIZ Bangalore and also to all 100% EOUs set up in Zone II & III provided the units achieve a value addition of at least 25% and also employ local labour to the extend of at least 80% of the requirement. b)Exemption for payment of Entry Tax on all raw materials, components etc.procured for processing in the EOUs/EOIZ irrespective of their location c)All EOUs set up in the State to be exempted from the power cuts imposed by KEB on industrial concerns from time to time. In addition to the above concessions,100% EOUs to be set up in EOIZ, Bangalore & in Zones II, III & IV shall be exempted from payment of ST payable on raw materials, components, packaging materials, consumables, capital goods , spares, material handling equipments, intermediates and semi finished goods & sub assemblies procured from industrial units within the state(from the domestic tariff area)