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Karnataka Industrial Policy: Here's what it entails

Karnataka Industrial Policy: Here's what it entails

Karnataka Industrial Policy: Here's what it entails
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By Mugdha Variyar  Jul 23, 2020 10:07:40 PM IST (Published)

New industrial investment projects in Karnataka are now required to have minimum employment of 70 percent Kannadigas and 100 percent in the case of Group D employees. The Factories Act has also been amended to allow overtime working hours to be extended to 125 hours per quarter.

New industrial investment projects in Karnataka are now required to have minimum employment of 70 percent Kannadigas and 100 percent in the case of Group D employees. The Factories Act has also been amended to allow overtime working hours to be extended to 125 hours per quarter.

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The Karnataka Government has brought in these and several other rules under the new Industrial Policy 2020-25, which also sets a target to attract investments of Rs 5 lakh crore into the state. The state has adopted a production turnover based incentive system instead of tax-based incentives to encourage production-based performance.
Here are the other key highlights from the new Industrial policy: 
 
  • Aims to generate employment for 20 Lakh people
  • Investment Promotion Subsidy to MSME based on turnover - 10% on turnover in each year for a period of 5 years and limited to 20-30% of the value of fixed assets VFA.
  • Investment Promotion subsidy based on turnover in the form of grant for Medium, Large and Mega Enterprises ranging from 1.75% -2.50% on turnover in each year for a period of 5-10 years and limited to 35-60% of VFA
  • The vision of new industrial policy to become a global leader in Advanced Manufacturing, Research & Development, and Innovation
  • Focus sectors identified: Automobiles & Auto components, Pharmaceutical & Medical Devices, Engineering and Machine Tools, Knowledge-based industries, Logistics, Renewable Energy, Aerospace & Defence, and Electric Vehicles.
  • To also focus on industrially backward districts, Tier 2,3 cities
  • Groups districts into three zones - Industrially backward districts classified in Zone-1 & 2; Bengaluru Urban and Rural districts classified in Zone-3
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