Small industries seek separate industrial areas in Karnataka

KASSIA President M. G. Rajagopal addressing a press conference in Mysuru on February 18, 2025.
| Photo Credit: M A Sriram

While demanding separate industrial areas for small and micro enterprises (SMEs) in the State, Karnataka Small Scale Industries Association (KASSIA) has urged the government to bring amendment to the Land Reforms Act suitably for enabling Karnataka State Small Industries Development Corporation (KSSIDC) to acquire land directly. Otherwise, the Karnataka Industrial Areas Development Board (KIADB) should allocate 30% of land it acquires to KSSIDC at the acquired price without charging any development fees.

Addressing mediapersons in Mysuru on February 18, KASSIA President M. G. Rajagopal said the cost of industrial land for SMEs has become very expensive. KIADB is transferring the land to KSSIDC at the allotment rate after acquiring the land and therefore KSSIDC is unable to provide land to MSMEs at an affordable price. “MSMEs are suffering as no land has been allocated to KSSIDC for the last 2-3 years.”

Highlighting the problems faced by MSMEs and the difficult times they are undergoing, he said about 6% of the industries in Karnataka are operated in the government-owned KSSIDC and KIADB areas while all the remaining industries are operated in private industrial areas. The industries in private industrial areas are completely deprived of the basic facilities required for the functioning of the industries. In the interest of development of small industries, there is an urgent need to provide basic facilities in private industrial areas, the KASSIA pleaded.

According to KASSIA, KIADB allocates plots at provisional rates and after allotment, the land rates are increased substantially on a regular basis. To avoid this situation, the government issued a notification dated 05.09.2018, setting rules for increasing the land rates of the plots. However, the board has considered the notification date as the cut-off date and has increased the land rates of the industrial areas developed. The interpretation of the notification by KIADB is unreasonable, it argued.

KASSIA has therefore urged the government to consider the notification for all the KIADB industrial areas developed before 2018. Since the final price fixed by KIADB is not affordable, a situation has arisen where SMEs have no other option but to sell their plots and shift to rented places, he claimed.

Also, KSSIDC revises land rates every year based on the guideline rates fixed by the State Government. “Such unscientific revision of land rates has led to financial distress for micro and small industries,” Mr Rajagopal claimed.

KASSIA has sought a separate labour policy for the SMEs. “Small industries contribute a lot to the state’s economy. It is the duty of the government to protect such industries. Therefore, it is essential to formulate a separate minimum wage policy that focuses only on micro and small enterprises (SMEs),” he said.