Industries need not wait for statutory clearances for 3 yrs, can start work in K'taka

Bengaluru, Jun 25: The Karnataka cabinet on Thursday gave its approval for amending the Karnataka Industries (Facilitation) Act, 2002 aimed at allowing industries to commence work without having to wait for any statutory clearances for the first three years.

The government expects the proposed amendment to boost investment across sectors and to aid the ease of doing business in the state. The objective of the amendment is to simplify regulations and reduce procedural requirements and create a conducive investment environment, it said.

"It is a historic decision to bring in a change in the industrial system, because this is in line with Prime Minister Narendra Modi and the state government's vision of ease of doing business," state Industries Minister Jagadish Shettar told reporters after the cabinet meeting.

He said, with the amendment, any industrialist once obtaining clearance from the land audit committee, after due approval for a project from the State High Level Clearance Committee or district committees, can begin civil construction work or installation of machinery at the land identified.

"The industry will have three years to get all approvals in place like- NOC, conversion, building plan- but need not wait to start work for setting up industries," he added. 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, officials said.

These permissions include approvals from under multiple state laws, including trade licence and building-plan approval, measures that would save a lot of time and cost for industries. Karnataka claims to be the the first state to amend its Industries (Facilitation) Act for small, medium and large- scale industries.

"In the entire country only two states-Gujarat and Rajasthan have such measures in place to facilitate the industries and they have it only for small scale industries, but in Karnataka it will be applicable for large, medium and small scale industries," Shettar said.

The government will be bringing in an ordinance introducing amendments to the Act.

"They (the ones starting the industry) are bound to get required clearances from gram panchayat or revenue department or pollution control board within 3 years or before the product comes out of the industry after manufacturing," Law and Parliamentary Affairs Minister J C Madhuswamy said.

Noting that this has been a long-pending demand of the investors and will usher in investments to the state in coming days, an official release said, in the past, numerous procedures and clearances have resulted in delay of setting up industries and escalated the project cost for the investors.

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', it said adding that the state has also simplified land and labour laws to promote Karnataka as an investment destination. Shettar also said the government has decided to give 100 per cent stamp duty exemption for agreements, sale deeds and other requirements for production of electric vehicles (EV) as a followup to the Karnataka Electric Vehicle and Energy Storage Policy 2017.