Karnataka Becomes First Indian State To Do Away With Requiring Multiple Clearances For Setting Up Industries

Karnataka has done away with the need to avail multiple clearances for setting up industries in the state. It is the first ever Indian state to have done so.

The cabinet on Thursday (25 June) approved the amendments to the Karnataka Industrial (Facilitation) Act 2002 which will fast track the setting up of industrial units in the state.

Gujarat and Rajasthan have in the past made such amendments but they provide this facility only for small scale industries. Karnataka though has extended it to all industries - be it small, medium or large.

These industries will get the permission to develop land, undertaken construction work and install machinery without waiting for multiple approvals.

Those who wish to set up an industry in Karnataka, after receiving due approvals from investment committees, will only be required to obtain an acknowledgement certificate from the nodal agency.

This amendment spares them of the need to obtain multiple approvals and clearances under various boards, forest rules, trade licenses and the like. It gives industries the go-ahead to setup their facilities up to the stage of commercial operation or within three years, following which it is required to apply and obtain the remaining clearances.

But in order to ensure that the relaxation isn’t misused, the amendment also mentions punitive action against those who do not obtain the required licences within three years or before starting commercial operations whichever is earlier, and if the land provided is not used for the purpose it is intended to.

“This is a historic decision taken for the benefit of the industrial sector. This decision has been undertaken as the government wants to promote Ease of Doing Business and facilitate investors to invest in the state,” said Minister for Large and Media Scale Industries Jagdish Shettar, as quoted.

This is the latest reform by the state government which is seeking to lure investments in the state. It had earlier this month eased land and labour regulations that put various restrictions on sale of farmland to non-agriculturalists.

By amending the Land Reforms Act 1961, the state government made way for the industries to directly purchase land from farmers. The land deal will also be auto approved if no red flags are raised within 30 days, of seeking approval from the revenue department.