State shoots for 12% industrial growth

State has launched new industrial policy aimed at attracting Rs 5 lakh crore investment in 5 years

In an effort to achieve an industrial growth rate of 12 per cent per annum and enhance the contribution of the manufacturing sector to the state GDP to 20 per cent from the present level of 16.87 per cent, the Karnataka government today launched a new industrial policy 2014-19.

The policy is aimed at attracting Rs 5 lakh crore of investment by the end of the policy period and spread industrial growth to every nook and corner of the state. It is anticipated that the industrial development would create an employment potential for 1.5 million people.

“I am happy to launch the new Karnataka Industrial Policy 2014-19 on this auspicious day. I have not merely given priority to welfare and social sectors, but has also given equal importance to industrial sector. We believe that the growth of industries will lead to increase in production, which will lead to asset creation and lead to the development of the state’s economy,” chief minister Siddaramaiah said after releasing the policy.

POLICY HIGHLIGHTS

• Aerospace, machine tool, steel & cement sectors considered as focus industries
• Net VAT + CST based interest free loans for a longer duration and higher ceiling limits
• Anchor industries and focussed sector will get enhanced package with a ceiling limit of 125 per cent of the fixed assets created
• Special attention is given to MSMEs with almost double the fiscal incentives compared to previous policy
• Every new industrial area to reserve 22.5 per cent of the allottable land to SC/SCT entrepreneurs
• Proposed to establish two exclusive industrial estates for women entrepreneurs and reserve 5% in all the industrial area for women
• * Strong focus on Hyderabad Karnataka with equitable allocation of funds for the region
• * All energy projects including renewable energy projects to be treated as industry and eligible for all incentives

Karnataka has the seventh largest gross state domestic product (GSDP) in the country’s GDP. It has a great potential to improve its economy through industrialisation and contribute more towards nation’s GDP, he said.

“The state government considers industrial growth as a means to mitigate poverty and unemployment. Developm-ent of industry, trade and service sector promotes higher capital formation, improves the per capita income level, absorbs surplus workforce,” Siddaramaiah said.

The Congress-led government after coming to power in May 2013, the department of industries and commerce has held five state high level clearance committee meetings and cleared proposals worth more than Rs 50,000 crore. Special package of incentives and concessions have also been announced for mega industries, he said.

Siddaramaiah said the new industrial policy aims at balanced growth moving beyond Bangalore with conscious effort to reach out the nooks and corners of the state.

While framing the new industrial policy, the state government has incorporated the recommendations of the manu- facturing task force which was formed to study the requirements of the industrial sector for growth and suggest suitable remedial measures. The policy lays emphasis on providing good infrastructure support for promotion of industries.

It has proposed to form at least five industrial areas every year spread over an area of 5,000 to 8,000 acres. Energy and water resources department will be directed to provide the required power and water to the designated industrial areas, the chief minister said.

The policy encourages private investment in establishing industrial areas and estates.

Mining
The state is aware of the fact that many projects, mainly mineral-based industries which have been approved during the earlier Global Investors’ Meet and have stalled their implementation for want of infrastructure support and a clear policy of the state with regards to mining.

“The policy proposes to consider these projects as focused industries and provide escort services with appropriate mining policy and speed up their implementation. I have directed my officers to come up with a clear mining policy shortly to resolve this issue,” Siddaramaiah added.

Many reforms are proposed across major departments to facilitate optimum utilisation of resources, encourage vertical development in industrial areas, protect the scarce industrial land, reduce inspections, enable submission of online returns among others to boost the morale of the investors and ease of doing business in Karnataka

Industrial corridors to get push
The new industrial policy 2014-19, proposes to join the Centre in implementing the Chennai-Bangalore-Chitradurga Industrial Corridor and Bangalore Mumbai Economic Corridor with the help of assistance from Japan annd UK. In order to take the maximum benefit from industrial corridor, the state has proposed four more industrial corridors, which will be in Dharwad - Koppal - Raichur, Chitradurga - Haveri - Karwar, Raichur - Bagalkot - Belgaum and Tumkur - Shimoga - Hassan sectors

The industrial corridors are expected to become the engines of economic and industrial development over the next 10-15 years. With this, the state proposes to spread out industries by creating industrial nodes along the corridor

The policy recognises the importance of the contributions of exports to the State's economy and measures are proposed to remove the bottlenecks and gaps in the infrastructure and a separate chapter is devoted explaining the export strategy of the state

It is proposed to take measures for increasing the capacity utilisation of Mangalore port by providing proper connectivity and infrastructure support