A bill was recently tabled in the Karnataka Legislative Assembly aiming to establish, operate, regulate, and manage large/ Mega/ Super Mega-size Investment Regions and Industrial Areas in Karnataka. On 27th December 2022, the Legislative Assembly passed the Karnataka Special Investment Region Bill, 2022 (“KSIRB”). The step aims to retain Karnataka’s position as a global manufacturing hub. The bill was formulated based on the Electronics City Industrial Township Authority’s (“ECITA”) successful model.
Understanding the Bill
KSIRB will supersede any other laws and regulations such as the Karnataka Town and Country Planning Act, 1961. However, per Section 17, the Town and Country Planning Act will continue to apply to the development plans and town planning schemes under KSIRB mutatis mutandis. Furthermore, the State Government will declare an existing or proposed investment region to be a Special Investment Region (“SIR”) with decided geographical boundaries. This SIR would be beyond the jurisdiction of the local authorities.
The Karnataka Industrial Areas Development Board
The apex authority to regulate development, operation, frame norms, manage SIRs, and the development of infrastructure within the SIR, as under KSIRB, would be the KIADB. KIADB is required to monitor the development of SIR and is empowered to perform the following functions for the same:
Regional Development Authorities (RDAs) and their Powers
Under the Bill, the State Government is required to constitute an RDA for a particular SIR. The State Government may also designate its own agency as an RDA and let it exercise such powers. The composition of such RDA consists of the chairman, the executive officer, the general manager, and two officials,appointed by the government, along with one officer nominated by the KIADB, among others. The powers of RDA, primarily under Section 15, are as follows:
To Sum Up
The Karnataka Government has taken this step to retain the state’s position as a global manufacturing hub. The bill would particularly boost economic activity backed by the infrastructure of world-class quality, premium civic amenities, and centres of excellence, and also set in place a proactive regulatory framework along with the establishment of an organizational structure for this purpose. Since the Bill is based on ECITA’s successful model, it would effectively create and manage world-class investment zones, thereby attracting global investors. Furthermore, a large part of the property tax collected from the SIRs will be used to provide amenities in the region, including infrastructure. This would ensure development for industrialists and make the process of doing business easier without the need to engage with local bodies.