Karnataka amends its Industries (Facilitation) Act for Attracting Investments

On 25th June 2020, Under the Chairmanship of Chief Minister of Karnataka BS Yediyurappa the State Cabinet of the Karnataka state government has made amendments to sections of ‘The Karnataka Industries (Facilitation) Act, 2002’.  An ordinance will be issued by the state government soon for the amendments to come into effect.

The amendment was made with the aim of creating an investor-friendly environment in the state. The amendment has simplified regulations and has reduced procedural requirements. The amendment will improve the ease of doing business in the state. For the first three years, small and medium industries can begin manufacturing without having to wait for statutory clearances.

The amendment made by the Karnataka Government will be applicable for all small, medium, and large industries of the state. Gujarat and Rajasthan are the other states that have amended their Industries Act, but in both these states, the amendment was made only for small industries.

Background

The Nationwide lockdown due to the COVID-19 pandemic has brought economic activities to a halt throughout the country. Now, the slow transition of the economy and the uncertainty of when things could normalize have added further pressure on most state governments across the country due to an acute fund crunch.

In order to generate employment, the state government of Karnataka had amended the Factories Act on 22nd May 2020 under which all factories were exempted from provisions of daily and weekly stipulated hours until 21st August 2020.

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