Karnataka SMEs to get 25% quota in new industrial areas

The state government scouts for land near Bangalore, promises to clear subsidies.

Small scale industries in Karnataka have something to cheer about, at last. After a lot of prodding, the state government has assured small industries that henceforth 25 per cent of the land set apart for industrial development would be allotted to SMEs in the state.

The government is expected to issue a directive to the Karnataka Industrial Areas Development Board (KIADB), and to begin with, the Department of Small Scale Industries would pay Rs 50 crore to the KIADB for land acquisition.

According to Minister for Small Industries Shivananda Naik, the government is also scouting for land near Bangalore for speedy development of small industries.

Small industries in Bangalore's Peenya, Rajajinagar and Magadi Road areas have been seeking land on the outskirts of the city, as the existing industrial areas have become congested and there is no land left for expansion.

Representatives of the Karnataka Association of Small Scale Industries (Kassia) had urged the state government to allocate at least 40 per cent of the KIADB developed land to small industries. The association has been demanding the state government to allot 2,000 acres of land on the outskirts of Bangalore for SSIs.

MCR Shetty, president, Kassia, said, "Almost 90 per cent of SSIs operate outside the industrial estates. There are 40 private industrial clusters in and around Bangalore which are deprived of basic amenities. The booming real estate business and land sharks have left no land in the city for industrial development. The only solution to this problem is that the state government comes forward to develop new areas and reserves 25 per cent for SSIs."

The government has also assured SSIs that their subsidies will be cleared shortly. While Rs 100 crore subsidy was cleared last year, another Rs 70 crore would be released shortly. The balance amount of Rs 214 crore would be paid over the next one year.

Karnataka has 3.55 lakh micro, small and medium industries, out of which 73,000 are in Bangalore. Together, they contributed 40 per cent to the state's total exports in 2005-06.

Karnataka has not created any new industrial cluster since 1972-73. The last one was the Peenya industrial estate, located on the outskirts of Bangalore. It is the largest in the country and spread over 40 sq km. The industrial estate houses 5,000 SMEs.