Karnataka amends its Industries (Facilitation) Act for Small, Medium and Large-scale industries

As per the amendment to Karnataka Industries (Facilitation) Act 2002, the industry will not need any statutory permissions for the first three years to set up operations in the state.

Created On: Jun 26, 2020 11:10 IST
Karnataka amends Industries Facilitation Act
Karnataka amends Industries Facilitation Act

The Karnataka government on June 25 amended the long-pending industrial reform ‘The Karnataka Industries (Facilitation) Act 2002’ in order to attract investment in the state. Karnataka has become the first state to amend the act for Small, Medium, and large-Scale Industries.

As per the state government’s statement, the Industries (Facilitation) Act has been amended to boost investment across the sectors. The decision was taken by the state cabinet meeting which was chaired by Karnataka CM BS Yediyurappa.

Currently, only Gujarat and Rajasthan are the two states that have amended the act for the small -scale industries only, but the amended act in Karnataka includes small, medium, and large scale industries.

What does the amendment to the Industries (Facilitation) Act mean?

Under the amended act, the small, medium and large -scale industries can commence manufacturing without waiting for any statutory clearances for the first three years.

As per the amendment, the industry will not need any statutory permissions for the first three years to set up operations in the state. These permissions include getting approval from multiple state laws, including building plan approval and trade license, measures that will save a lot of time and cost for the industries.

The objective behind amending the act is to simplify regulations and to reduce procedural requirements as well as to create a conducive investment environment.

Karnataka govt on amending the act:

The minister of Large and Media Scale Industries, Jagdish Shettar informed that the decision was taken in the cabinet under the leadership of Karnataka’s CM. This is a historic decision that has been taken for the benefit of the Industrial sector. The decision to amend the act has been undertaken as the state government wants to promote easy business and facilitate investors to invest in the state.

Earlier, numerous clearances and procedures had resulted in the delay of setting up industries and had escalated the project cost for the investors which resulted in delayed investment to the state.

Changes by Karnataka govt to resume economic activity post-COVID-19:

To kick start economic activity post-COVID-19, the state government in the last few weeks had stressed on ease of doing business, with a simplified process, the single window for investors, regular consultation with industry, and stable policy. Karnataka has also simplified land and labour laws to promote Karnataka as an investment destination.

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