Karnataka done away with need to avail multiple clearances for setting up Industries

In a massive ease of business step in Karnataka, several changes have been made in " The Karnataka Industries (Facilitation) Act, 2002". Now companies can buy aquire lands directly from land owners and KIADB will validate it. The industries can identify lands in Industrial Zone, they can pay the owners directly, conversion not required before buying. After this KIADB will give permission as per zone and purpose.

The Karnataka government on 25th June, 2020,  has amended the long pending industrial reform "The Karnataka Industries (Facilitation) Act, 2002" to facilitate and attract investment in the state. The decision was taken by the state Cabinet meeting held today and chaired by Hon'ble Chief Minister of Karnataka BS Yediyurappa.

Karnataka amends Industries (Facilitation) Act to boost investment across sectors.

Facilitation Act to be a huge game changer and aid Ease of Doing Business in Karnataka.

Under the amended Act, medium and small industries to commence manufacturing without having to wait for any statutory clearances for the first three years.

Currently, only Gujarat and Rajasthan are the two states in the country that have amended this Act for small scale industries only. In our state the amended act includes small, medium and large scale industries.

Under the amended Act, an industry would not need any statutory permissions for the first three years, or whichever is earlier to set up operations in the state. These permissions include approvals from under multiple state laws, including trade licence and building-plan approval, measures that would save lot of time and cost for industries.

The objective of the amended Act is to simplify regulations and reduce procedural requirements and create a conducive investment environment.

Economies worldwide are seeing a slow transition and will require a longer period to restore the pre-COVID normalcy levels. In midst of these sobering business environment, the Karnataka State Cabinet cleared the (Facilitation) Act, 2002. This Act has been a long pending demand by the investors and will usher in investments to the state in coming days.

During a media briefing held today at Bengaluru, Jagdish Shettar, Minister for Large & Media Scale Industries said, "This decision was taken today in the cabinet under the leadership of Chief Minister BS Yediyurappa and I thank all my cabinet colleagues for this progressive move. This is an historic decision taken for the benefit of the industrial sector. This decision has been undertaken as the government wants to promote Ease of Doing Business and facilitate investors to invest in the state. "

In the past, numerous procedures and clearances have resulted in delay of setting up industries and escalated the project cost for the investors, thus resulting in a huge economic toll and delayed investment to the state. Keeping that in mind, the newly amended Act shall ensure the investors are insulated by the delays.

In order to kick-start the economic activity post-COVID-19, the Karnataka government in the last few weeks has stressed on Ease of Doing Business, with single window for investors, simplified processes, regular consultation with Industry, stable policy-driven. The state has also simplified land and labour laws to promote Karnataka as an investment destination.

Source: Daily Hunt

The cabinet, which met on Thursday, approved the Karnataka Industries (Facilitation) (Amendment) Bill, which seeks to exempt industries from obtaining permissions from multiple agencies for the first three years. Karnataka is the first state to amend the longpending industrial reform to boost investment across sectors. Investors just need to submit a proposal to the Karnataka State High Level Clearance Committee (SHLCC) to start an industry or enterprise.

“An acknowledgement letter from SHLCC is enough to start operations,” said industries minister Jagadish Shettar, dubbing it a revolutionary land law in the country. The government, however, will not wait for the bill to be passed in the assembly, but will soon promulgate an ordinance for implementation. Shettar said Gujarat, Rajasthan and Kerala have similar laws, but they are applicable only to micro, small & medium enterprises (MSMEs). The proposed law, Shettar said, is expected to enhance the ease-of-doing business and give a big boost to investments, besides providing relief to entrepreneurs, who otherwise have to run from pillar to post to get sanctions.

The investor will get a leniency period of three years for obtaining all required licences, including building permits, certificate from the pollution control board, and other permits to obtain electricity and water connections. The minister said the new law will remove administrative hurdles being faced by investors under the existing system and expedite implementation of projects. “It used to take minimum three years for an industrial unit to start operations after taking approvals. The new law will help save time and result in quick employment generation,” Shettar added.

Source: TOI