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Wednesday, Aug 30, 2006

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Karnataka industrial policy outlines HRD initiatives

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Incentives for skill development in specialised manufacturing, service sectors

On the block
The policy targets 9 per cent GSDP growth against 8.7 per cent last year.
Promises five acres of free land and 50 per cent cost-sharing up to Rs 2 crore for every skill development institute.
Rationalises the five existing industrial zones into three.
Agro food processing units will be exempt from the APMC cess.

THE DEPUTY Chief Minister, Mr B.S. Yediyurappa (left), and the Large Industries Minister, Mr Katta Subramanya Naidu, releasing the new industrial policy in Bangalore on Tuesday. — Bhagya Prakash K

Bangalore , Aug. 29

Karnataka's just unveiled industrial policy for 2006-11 seems to be addressing the industry's human resources woes; it gives the pride of place, unprecedented support and incentives for skill development in specialised manufacturing and service sectors.

Among the HRD incentives promised by the H.D. Kumaraswamy Government are five acres of land free of charge and 50 per cent cost-sharing up to Rs 2 crore for every skill development institute to be set up in public-private partnership. Industry associations promoting them stand to get Rs 15 lakh a year for three years as recurring expenses.

Special treatment

The HRD initiatives pick retailing, apparel and textiles, construction, repair and service of earth moving equipment for special treatment. Training for these emerging sectors would include communication, soft skills and computer education to cater to the booming service sectors.

The policy unveiled on Tuesday by the Deputy Chief Minister and Finance Minister, Mr B.S. Yediyurappa, has rationalised the five existing industrial zones into three.

Stamp duty, entry tax, special entry tax, capital investment subsidy in tiny and small units and raw material procurement have been repackaged for these zones.

Zone One comprising 79 highly-backward taluks attracts the maximum benefits, including 100 per cent waiver on land conversion fine.

The incentives applicable from April 1 this year would decongest Bangalore, reduce regional economic imbalances and make the State number one investment destination, Mr Yediyurappa and the Large Industries Minister, Mr Katta Subramanya Naidu, said.

Agro food processing units will be exempt from the APMC cess and can procure cereals, oil seeds, fruits and vegetables directly from farmers. Six upcoming food parks would be completed by the end of 2007.

HRD measures

The measures would help Karnataka move up its fifth ranking in HRD among the States.

A new scheme will offer on-the-job training to unemployed youth and monthly stipends of Rs 750 each.

Three lakh persons would get entrepreneurship training. About Rs 25 crore has been earmarked for the initiatives and a high-level panel is to prepare the detailed roadmap for various sectors.

Focus would be to fully tap the core-competence areas of aerospace, engineering, electronics, automobile, machine tool, steel, cement, pharmaceuticals, food processing and apparel.

Infrastructure fund

A Rs 500-crore Infrastructure Upgradation Fund is being created to develop new industrial areas around Bangalore and other cities.

Apart from five new townships already proposed around Bangalore, nine industrial corridors/clusters are to be developed at Bangalore-Mysore, Hubli-Belgaum, Bellary-Hospet Mangalore-Udupi among others.

Mr Naidu said 10,000 acres have been notified out of the 26,000 acres of land identified for industrial and infrastructure development.


Separate policies will spell out the modalities for water and energy. SPVs will be allowed for large industrial water supply schemes.

A comprehensive power policy and a Gas Distribution Master Plan will rope in public and private sector players.

The policy targets 9 per cent GSDP growth (against last year's 8.7 per cent) riding on 12 per cent industrial growth; creation of 10 lakh jobs; and raising the State's export share to 20 per cent (from current 15 per cent) in the next five years.

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