New industrial investment projects in Karnataka are now required to have minimum employment of 70 percent Kannadigas and 100 percent in the case of Group D employees. The Factories Act has also been amended to allow overtime working hours to be extended to 125 hours per quarter.

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The Karnataka Government has brought in these and several other rules under the new Industrial Policy 2020-25, which also sets a target to attract investments of Rs 5 lakh crore into the state. The state has adopted a production turnover based incentive system instead of tax-based incentives to encourage production-based performance.

Here are the other key highlights from the new Industrial policy:

Aims to generate employment for 20 Lakh people

Investment Promotion Subsidy to MSME based on turnover - 10% on turnover in each year for a period of 5 years and limited to 20-30% of the value of fixed assets VFA.

Investment Promotion subsidy based on turnover in the form of grant for Medium, Large and Mega Enterprises ranging from 1.75% -2.50% on turnover in each year for a period of 5-10 years and limited to 35-60% of VFA

The vision of new industrial policy to become a global leader in Advanced Manufacturing, Research & Development, and Innovation

Focus sectors identified: Automobiles & Auto components, Pharmaceutical & Medical Devices, Engineering and Machine Tools, Knowledge-based industries, Logistics, Renewable Energy, Aerospace & Defence, and Electric Vehicles.

To also focus on industrially backward districts, Tier 2,3 cities

Groups districts into three zones - Industrially backward districts classified in Zone-1 & 2; Bengaluru Urban and Rural districts classified in Zone-3