The document summarizes the Karnataka Industrial Policy for 2014-2019. Some key points: - It aims to promote industrial areas and reservations for women entrepreneurs. Low interest loans and training programs will be provided. - Data on MSME units established during 2009-2014 shows more men's units than women's, but women provided more employment. - Subsidies are provided differently based on zone and region. More developed zones receive less support. Women and SC/ST entrepreneurs receive higher subsidies. - Incentives include investment subsidies, stamp duty and tax exemptions, interest subsidies, grants for certification, technology and environmental programs. Amounts vary by zone. - Terms and conditions define eligibility

1. Karnataka Industrial Policy
2014 -19
Directorate of Industries &
Commerce
for

2. Encouragement to Women Entrepreneurs:
1. It is proposed to promote two industrial areas in the State
at potential locations such as Hubli/Dharwad and
Harohally in Kanakapura taluk for women.
2. Reservation of 5% of plots/sheds in the Industrial
Areas/Estates developed by KIADB/KSSIDC for women
entrepreneurs in all the future Industrial areas/estates.
3. Exclusive cluster for women in Textile, Gem & Jewellery.
4. Trained entrepreneurs by CEDOK or recognized training
institutions will be provided with low interest start up
loans (with interest subsidy) and flexible repayment
schedule.
5. Attractive incentives and concessions.
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3. MSME’s Established during 2009-14 policy
Men
No. of Units: 75,785
Investment
Rs 7,94,474 lakhs.
Employment:5,54,414
Women
No. of Units: 31,023
Investment
Rs 1,10,247 lakhs.
Employment :1,31,719
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4. Subsidy released to the units sanctioned in 2009-14 policy
Men
No.of Units 1,125
Amount released in
Rs. 5,691.77 lakhs
Women
No of Units 558
Amount released in
Rs 2,919.80 lakhs
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5. Classification of taluks for Incentives & Concessions
Hyd-Kar region
Zone-1: 20 taluks
Zone-2: 11 taluks
Non Hyd-Kar region
Zone-1: 23 taluks
Zone-2: 51 taluks
Zone-3: 62 taluks
Zone-4: 9 taluks
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6. MSMED Act 2006:
Investment on Plant and machinery
Manufacturing Service
Medium
Small
Micro
Rs.10 crore
Rs.5 crore
Rs.25 lakh
Rs.5 crore
Rs.2 crore
Rs.10 lakh
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7. Definition of Mega, Ultra Mega & Super Mega
Investment on Fixed Assets
Classification of Large Scale Industries
Super mega
Ultra mega
Mega
Large
Above Rs.1000 crore
Above Rs.500 crore upto Rs.1000
crore
Above Rs.250 crore upto Rs.500 crore
Above Rs.10 crore to Rs. 250 Crore
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8. 1. Investment Subsidy (Rs. In lakhs)
Category Other than Hyd-Kar Area Hyd-Kar Area
Zone 1 Zone 2 Zone 3 Zone 4 Zone 1 Zone 2
Micro Other
women
% 30% 25% 20% 10% 35% 30%
Max Rs. 18.00 Rs.15.00 Rs. 12.00 Rs. 8.00 Rs.20.00 Rs.18.00
SC/ST
Women
% 35% 30% 25% 15% 40% 35%
Max Rs.20.00 Rs.18.00 Rs.15.00 Rs. 12.00 Rs.22.00 Rs.20.00
Small Other
women
% 25% 20% 15% 10% 30% 25%
Max Rs.45.00 Rs.35.00 Rs.25.00 Rs.10.00 Rs.50.00 Rs.45.00
SC/ST
Women
% 30% 25% 20% 15% 35% 30%
Max Rs.50.00 Rs.40.00 Rs.30.00 Rs.15.00 Rs.55.00 Rs.50.00
Mediu
m
Other
women
Max Rs.55.00 Rs.45.00 Rs.35.00 Rs.20.00 Rs.60.00 Rs.55.00
SC/ST
women
Max Rs.60.00 Rs.50.00 Rs.40.00 Rs.25.00 Rs.65.00 Rs.60.00
Medium :Unit those providing minimum of 25 direct employment
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9. 2 & 3. Stamp Duty Exemption & Concessional
Registration Charges
Other than Hyd-Kar Area Hyd-Kar Area
Zone 1 Zone 2 Zone 3 Zone 4 Zone 1 Zone 2
Stamp duty exemption 100% 100% 100% 75% 100% 100%
Concessional
Registration Charges
Rs. 0.50/
Rs. 1000
Rs. 0.50/
Rs. 1000
Rs. 0.50/
Rs. 1000
Rs. 0.50/
Rs. 1000
Rs. 0.50/
Rs. 1000
Rs. 0.50/
Rs. 1000
4. Reimbursement of Land Conversion Fee
Other than Hyd-Kar Area Hyd-Kar Area
Zone 1 Zone 2 Zone 3 Zone 4 Zone 1 Zone 2
100% 100% 100% 75% 100% 100%
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10. 5. Exemption From Entry Tax
Other than Hyd-Kar Area Hyd-Kar Area
Zone 1 Zone 2 Zone 3 Zone 4 Zone 1 Zone 2
% 100% 100% 100% NIL 100% 100%
On PM 3 years 3 years 3 years NIL 3 years 3 years
On RM 6 years 6 years 6 years NIL 6 years 6 years
6. Subsidy for Setting up Effluent Treatment Plant
(ETP) : Manufacturing MSMEs:
Non HK region HK region
Zone-1,2 &3 -75%- Rs.100 lakhs Zone- 1 & 2- 75%- Rs.100 lakhs
Zone-4 – 75% - RS. 50 Lakhs
One time capital subsidy based on the cost of ETPs 10

11. 7. Interest Subsidy (Micro units only)
Rate of
Int sub
Non HK area HK area
Zone 1 Zone 2 Zone 3 Zone 4 Zone 1 Zone 2
6% 6 Years 5 years 4 years NIL 7 years 6 years
8. Exemption from Tax on Electricity Tariff:
Manufacturing MSMEs:
% Non HK area HK area
Zone 1 Zone 2 Zone 3 Zone 4 Zone 1 Zone 2
100% 7 years 6 years 5 years 4 years 8 years 7 years
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12. 9.Technology upgradation, Quality Certification
Manufacturing MSMEs:
a. Interest Subsidy on Technology Upgradation Loan:
Non HK region (Zone 1,2 & 3 only) & HK region (Zone 1 & 2)
5%- Interest subsidy on loans availed from KSFC & Scheduled commercial banks which are not
covered under CLCSS of GOI.
b. ISO Series Certification:
Non HK region (Zone 1,2 & 3 only) & HK region (Zone 1 & 2)
75% of cost ( max. Rs. 1.00 lakh)
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13. 9.Technology upgradation, Quality Certification
Manufacturing MSMEs:
c. BIS Certification:
Non HK region (Zone 1,2 & 3 only) & HK region (Zone 1 & 2)
50% of fees payable to BIS (max. Rs. 20,000) and 50% of cost (max. Rs. 1,00,000) for purchase
of testing equipments as approved by BIS.
d. Technology Adoption:
Non HK region (Zone 1,2 & 3 only) & HK region (Zone 1 & 2)
50% of cost (max. Rs. 1.00 lakh)
for adopting technology from recognized national laboratories
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14. 9.Technology upgradation, Quality Certification
Manufacturing MSMEs:
e. Technology Business Incubation Center:
Non HK region (Zone 1,2 & 3 only) & HK region (Zone 1 & 2)
50% of the project cost (max: Rs.75.00 lakh).
f. Recycling of electronic waste and plastic waste:
Non HK region (Zone 1,2 & 3 only) & HK region (Zone 1 & 2)
5% with a ceiling limit of Rs. 15.00 lakh
Additional investment promotion subsidy
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15. 10.Water Harvesting / Conservation Measures:
Manufacturing SMEs:
Non HK region (Zone 1,2 & 3 only) & HK region (Zone 1 & 2)
Rain water harvesting : 75% of cost of equipment (max. Rs. 1.50 lakh)
Waste water recycling : 75% of cost of equipment (max. Rs. 7.50 lakh)
Zero discharge process: 75% of cost of equipment (max. Rs. 7.50 lakh)
11.Energy Conservation : Manufacturing MSMEs
All Zones
Practicing Energy Conservation measures resulting in reduction of Energy Consumption of at least
10% of earlier consumption: 15% of capital cost (max Rs. 7.50 lakh).
Use of non-conventional energy sources: 15% of capital cost (max. Rs.7.50 lakh). Subsidy of Rs.
0.75 per unit of Captive power generated and consumed through Solar & Wind Energy sources
only.
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16. 12. Reimbursement of the cost of preparation of
project reports
Non HK region (Zone 1,2 & 3 only) &
HK region (Zone 1 & 2)
75% of project report preparation cost- Max Rs.2.00 lakhs
Reimbursement of the cost of preparation of project reports up to prepared by
TECSOK and CEDOK required for which bank loans are sanctioned
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17. 13. Land / Shed allotment by KIADB and KSSIDC at
concessional rates for SC/ST women entrepreneurs
Subsidy Non HK area HK area
Zone 1 Zone 2 Zone 3 Zone 4 Zone 1 Zone 2
% 40% 40% 30% 25% 40% 40%
Max Rs.15.00 Rs.15.00 Rs.25.00 Rs.35.00 Rs.25.00 Rs.20.00
• This concession is in addition to the
investment promotion subsidy provided
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18. Annexure-3A: TERMS & CONDITIONS FOR SANCTION
OF INCENTIVES & CONCESSIONS-2
• This policy is with effect from : 1/10/2014
• Duration: for five years or as revised by the Government.
• Once the new Industrial Policy 2014-19 comes into
operation the Industrial Policy 2009-14 stands withdrawn
• Enterprises which have been sanctioned and have partly
availed incentives and concessions under earlier policies
shall continue to enjoy those benefits as per respective
sanction orders.
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19. Annexure-3A: TERMS & CONDITIONS FOR SANCTION
OF INCENTIVES & CONCESSIONS-3
b) The applicability of the Industrial Policy 2009-14 or Industrial
Policy 2014-19 for the Projects which are under implementation
(pipeline projects) at the time of announcement of Industrial
Policy 2014-19 is decided as follows.
(i) Projects cleared through District level, State Level and State High
Level Clearance Committee during the 2009-14 Policy period and
if they have availed any of the incentives and concessions for the
project as per 2009-14 policy are eligible to avail other incentives
and concessions under 2009-14 policy only.
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20. Annexure-3A: TERMS & CONDITIONS FOR SANCTION OF INCENTIVES & CONCESSIONS-4
(ii) If any unit including self financed project has taken any one of the following
effective steps and the date of any one of these steps is before the date of issue of
Government Order of the new industrial policy 2014-19, then the unit shall avail
incentives as per policy 2009-14 only.
1. Date of entering lease or sale agreement of the premises (either land or building).
2. Date on which possession certificate of the plot or shed is taken from KIADB/KSSIDC or
any other agency
3. Date of approval of building plan by competent authority
4. Date of release of first installment of loan from Financial Institution /Bank.
5. Date of placement of first purchase order for plant and machinery.
(iii) If any enterprise has not taken any effective steps, not invested any amount and
not availed any incentives and concessions during the 2009-14 policy period, they shall
avail incentives as per Industrial Policy 2014-19 only.
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21. Annexure-3A: TERMS & CONDITIONS FOR SANCTION
OF INCENTIVES & CONCESSIONS-5
c) The Projects which are under implementation (pipeline projects) at the time of
announcement of Industrial Policy 2014-19 as explained above shall commence
commercial production before 31/08/2017 failing which their eligibility to avail
incentives as per Industrial Policy 2009-14 will lapse. They will not be eligible to
claim incentives either under Industrial Policy 2014-19.
d) Incentives and concessions under this policy shall primarily be available only for
Manufacturing Industries and specified categories of service industries as listed in
Annexure 1
e) The incentives and concessions under this policy will be available to all new and
additional investments made during the policy period for establishment of new
enterprises and expansion/ diversification/ modernization (as defined in Annexure
5).
h) Enterprises can avail incentives and concessions under only one policy of the
Industries Department.
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22. Annexure-3A: TERMS & CONDITIONS FOR SANCTION
OF INCENTIVES & CONCESSIONS-6
i) Minimum term loans on eligible fixed assets from Financial
Institution/Banks required for Investment Promotion Subsidy – 50%
ii) Time frame for claiming Investment Promotion subsidy- within one
year from the date of commencement of commercial production
j) There is no restriction on the quantum of loan to be availed from the
financial institutions for availing tax based incentives. Own financed
units are also eligible for tax based incentives.
l) While calculating the value of eligible fixed assets created during
expansion / diversification / modernization of an enterprise only
additional new investments shall be considered. The original
investment for which subsidy has already been sanctioned shall not be
accounted.
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23. Directorate of Industries &
Commerce
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