The Karnataka Industrial Areas Development Act came into effect in the year 1966 with the Karnataka Industrial Areas Development Board (KIADB) acting as the authority to comprehensively promote, establish and develop industries across Karnataka. This newsletter studies the evolution of the KIADB with the reference to the introduction of the Karnataka Special Investment Regions Act, 2022 (“KSIR Act”).
Prior to the KSIR Act, the KIADB exercised general powers over industrial development in industrial areas notified by the State Government. This includes the development of the industrial areas by providing infrastructural facilities and amenities, undertaking schemes implemented by the government, acquiring, holding and managing properties and buildings for the industries, among other powers. The KSIR Act now extends the powers and functions of the KIADB over the now-introduced special investment regions in order to maintain Karnataka’s position as the manufacturing hub of India.
The new Act vests the KIADB with the powers to make regulations for the development, operation and management of the special investment regions and towards the enforcement of the provisions of the Act. Standing as the apex authority for the KSIR Act, the KIADB can supervise and monitor the functions of the Regional Development Authorities proposed to be set up across the special investment regions. It can further appoint multiple Executive Committees and Dispute Resolution forums for the administration of these regions.
For the purposes envisaged under the KSIR Act, the KIADB can also transfer its assets to a government agency or even a private company by entering a public-private partnership. The KIADB also supervises and manages entities such as the Regional Development Authority which will include an internal Grievance Redressal Committee, and the Dispute Resolution Forum which is to be set up by the KIADB.
The land acquisition required for a town planning scheme, development plan, or an infrastructure project under the KSIR Act, is deemed to be for public purposes and will hence attract the procedures and guidelines enshrined under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 such as the requirement of a social impact assessment, as specified under Section 34 of the KSIR Act.
As a primary rule, the KIADB would have the power to acquire land for purposes related to industrial activities, infrastructures, amenities and civic facilities. This includes the establishment of Industrial Townships which can further consist of residential complexes, shopping markets, playgrounds, schools, hospitals, fire brigades, police stations, entertainment areas, and waste disposal centres. The township thus includes civic recreational facilities for the welfare of the residents and workers.
Moreover, the Board is now also empowered to acquire land and transfer the same to specified private companies and entities falling under approved public-private partnerships in an open and transparent manner. This makes the 2013 Land Acquisition Act immensely relevant and important within the KSIR Act. Overall, the KIADB acquires land for the purposes of economic activity, industrial development, civic amenities, and infrastructural developments.
Thus, the KIADB has witnessed significant changes and extensions within the scope of its powers and functions with the introduction of the KSIR Act by the Karnataka government. To what extent they can scale up their operations to perform their newfound duties and obligations shall depend on the institutional support they receive from the state government. With the focus of the government clearly being on maintaining itself as a manufacturing epicentre in the subcontinent, the KIADB has a key role to play in the development envisaged by recent changes and amendments to the land laws of Karnataka.
The mandate to establish Regional Development Authorities is also a very welcome change, as they can now take over the day-to-day issues relating to these regions. This leaves the KIADB with the time and space to focus on the more important policy decisions needed to regulate the administration of such areas and promote the flow of investment toward industrial development