Bengaluru, Mar 2 (KNN) Karnataka Cabinet has passed an amendment to the Karnataka Industrial Areas Development Board (KIADB) rules on land allotment by withdrawing the 99-year lease clause for allotment to industries.

After the decision, the clause of 99 years for allotment of land or plots to industries and infrastructure projects has been amended. The lease period has been brought down to 30 years.

The State Cabinet meeting was chaired by Karnataka Chief Minister S Siddaramaiah.

Earlier, the government had decided to issue 99-year lease to these complexes, but the Cabinet on Wednesday approved the issue of sale deed to not only these two categories, but also to the Central and state government companies, public sector enterprises and joint venture projects.

Talking to KNN, President of Karnataka Small Scale Industries Association (KASSIA), A Padmanabha welcomed the move and said, “The decision, however, will impact the single unit complexes with more than 50 acres and above land where the land was taken by the industry itself and KIADB was not in picture”

He said, “We met the Chief Minister and Industries Minister today morning urging him to consider allotment of KIADB land on 10-year-lease cum sale rather than 99-year-lease for small sector. He assured to look into the matter at the earliest,” Padmanabha added.

In its Budget Memorandum submitted to the government, Kassia had said, “The cabinet decision to allot on 99 years lease basis has become a retrograde step particularly to the Small Scale Industries,” KASSIA President said.

“KASSIA would appreciate if the Government of Karnataka takes our views also into consideration and allot land below THREE acres only to Micro and Small Industries under 10 years lease cum sale basis and exempt from 99 years lease (new legislation),” it added.

KASSIA has been asking the Government to consider allotment of KIADB land on 10-year-lease cum sale rather than 99-year-lease for the MSMEs up to 3 acres of land, or exempt the applicability of 99-year-lease to the SME sector.

TB Jayachandra, Karnataka Law and Parliamentary Affairs Minister, told reporters, “With a view to give a fillip to industrial activity in the State, a decision was taken to drop 99-year lease for land allotment.”

Prior to 2014, the State government had fixed a tenure of 10-year lease-cum-sale for land allotted for industrial activity.

Due to severe shortage of land for industrial activity and also as land was getting diverted for purposes other than industries, the government in 2014 brought in an amendment and increased the lease period to 30 years, and subsequently to 99 years.