Karnataka to cut application fee for setting up industries by 50%

The Karnataka Government is planning to cut application fee for setting up industries in the State by 50 per cent.

Speaking at CII Karnataka annual meet on manufacturing, employment and economic growth, Additional Chief Secretary of Industries Department Ratna Prabha said the fee cut is likely to come into effect on April 1.

The application fee for setting up industries ranges from ₹30 lakh for the big industries to ₹30,000 for small ones.

Earlier, Karnataka Udyog Mitra was charging a fee to process the application. “The government is thinking of cutting the fee by half and reimbursing Karnataka Udyog Mitra instead,” said Ratna Prabha.

Beyond Bengaluru Seeking CII help in decongesting Bengaluru, Ratna Prabha said the focus now should be on policy proposals to move beyond Benagluru and decongest the city. KIADB has about 40,000 acres in its land bank throughout the State.

“At the same time, we are looking to create the right infrastructure to make people move into the interior parts of the State,” she added.

The State government is focusing on the creation of quality infrastructure with comprehensive facilities, human resource development through capacity building and skill up gradation, facilitation mechanisms and procedural reforms in tier II cities.

Other locations Explaining the potential for investment beyond Bengaluru, Ratna Prabha said cities such as Hubli-Dharward, Belgaum, Mangalore and Mysore are very good tier two cities to start industrial hubs.

The State has about 1,500 acres in Chamarajnagar and 3,300 acres of land in its possession in Gulbarga division, where the Centre has given approval for a textile park in addition a lot of pharma companies from Hyderabad have also shown interest to relocate.

“We have seen positive response with almost 2,000 acres of land already allotted. The government is also proposing to develop NIMZ in Gulbarga,” she said.

Manufacturing thrust Earlier Abdul Majeed, partner, PriceWaterHouse Coopers, said the sectors expected to boost employment in manufacturing are wood, paper products, textiles, leather, gems and jewellery, handloom-power loom and transport since these are more labour intensive and require large workforce with no specific skill sets.

Hence, he urged the government to focus on these sectors and provide incentives as these sectors can absorb rising surplus of unskilled workers.

Thrust to MSME is a must as labour-capital ratio is much higher in MSMEs than larger industries. There is a growing need to increase the availability of bank credit to the MSME sector and they should adopt latest IT systems.

He was of the opinion that the government should streamline assistance by setting up of MSME clusters which will lead to tax incentives and simplify procedures.

Revenue Navas Meeran, Chairman, CII Southern Region, said revenue generated by the manufacturing industry in the southern region is around $430 billion in 2011 and is estimated to be around $853 billion by 2020.

Karnataka has 70 per cent share in the aerospace and defence sector. Over the years CII, has been focusing on building competitiveness of manufacturing industry with special focus on MSMEs.

Entrepreneurship in manufacturing is crucial for long term sustainable growth and it will bolster the already thriving innovation culture in our economy leading to more robust, dynamic and flourishing economy.

Manufacturing hub Sandeep Maini, Chairman, CII Karnataka, said Bengaluru is a hub for machine tool manufacturing, which is relatively high on the manufacturing production stages.

“We have the potential to be involved in virtually all of the supply chain components that is involved in manufacturing, starting from simple component manufacturing to R&D and design,” he said.

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