2 mn jobs by 2025: Karnataka’s new industrial policy

The state’s New Industrial Policy 2020-25 will attract Rs 5 lakh crore worth of investments over the next 5 years and also ensure 70% jobs for Kannadigas


Karnataka’s New Industrial Policy 2020-25 will create two million jobs and is expected to attract Rs 5 lakh crore worth investments over the next five years. The state hopes to ensure inclusive, innovative, balanced and sustainable development with this move. There will be maximum direct employment in all new industrial investment projects, and 70 per cent of jobs will be given to Kannadigas, whereas 100 per cent jobs will go to locals in case of Group D employees.

With the pandemic aggravating the state’s financial crisis, there is an urgent need to create jobs and attract investments to get the economy back on its feet. The state government will now increase its focus on the automobiles and auto components space. It will also concentrate on pharmaceutical and medical devices, engineering and machine tools, knowledge-based industries, logistics, renewable energy, aerospace, defence and electric vehicles among others. The policy will help Karnataka achieve its target of occupying the third position in merchandise exports by 2025.

The state government has gone ahead and relaxed many laws pertaining to industries, land and labour, so that there are no hurdles in attracting investments.

It has realised that it has lost out on many golden opportunities because of red tape, delayed clearances and cumbersome land-acquisition processes, unlike other states offering more attractive incentives and making land easily available for industrial use.

With most companies located in and around Bengaluru, a regional imbalance has resulted, which is increasing day by day. Therefore, the government hopes to focus more on projects and incentives for companies to establish their offices in tier II and III areas. The state government will now set aside 30 per cent of the available land in industrial areas for setting up micro, small and medium enterprises.

The new policy will also ensure more jobs for Kannadigas or reserve jobs for locals and people with a certain domicile in the state.

The state government has now made amendments to various legislations. Overtime has been hiked to 125 working hours per quarter, and minimum wage revision has been linked to inflation and consumer price index (CPI), even though labour rights activists have been protesting against them.

The Karnataka Industries (Facilitation) (Amendment) Act has been amended to allow companies to start construction activities and operations the moment clearance is received from high-level committees and not wait for any other approvals.

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