Karnataka’s land policy: Some happy but MSME seeks relaxation

Bengaluru: Trade and commerce bodies have welcomed the state government’s decision to allot industrial sheds/sites on 99 years lease but they want the government to be lenient to Micro Small and Medium Enterprises (MSME) industries.

The State Cabinet, which met last week, came out with a decision to do away with the system of lease cum sale basis and the mandatory 99 year lease of industrial sheds and sites. This was announced in the State Industrial Policy for 2014-19 but it got the approval of the Cabinet recently. According to new rules, there is a ban on the use of industrial plots/sheds for non-industrial purposes in the wake of conversion of industrial plots/sheds for residential complexes and commercial purposes.

Federation of Karnataka Chamber of Commerce and Industries President S. Sampath Raman told Deccan Chronicle that the federation will oppose the new system as it is detrimental to the MSME sector. Their contention was brought to the notice of CM Siddaramaiah and senior officials of the Department of Industries and Commerce.

Five to ten per cent of industrialists had used land allotted by the government for commercial purposes but why others should be punished for this mistake, they ask. The conversion of industrial sheds/plots happened in the past due to the connivance of officials of the department of industries. Some industrialists were forced to shut their units and sold it off due to complaints from local residents about pollution.

He said the FKCCI had appealed to the CM to allot upto two acres to MSME on lease cum sale basis for a period of ten years and Siddaramaiah had responded positively. Even they have problems regarding allotment of plots and sheds on a 99 year lease. According to provisions, KIADB has powers to take back land if any industrialist defaults on bank loans and if the unit is not set up within three years of land allotment. “Recent decisions of the government are not based on ground reality”, he added.