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The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has urged the state government to focus on investment revival, infrastructure development, and a separate policy for micro, small, and medium enterprises (MSMEs) in its pre-state budget memorandum for 2025-26. The memorandum was submitted on Friday.
Emphasising the need for a distinct MSME policy, FKCCI pointed out that microenterprises, which constitute nearly 99% of MSMEs, have a turnover of less than ₹5 crore. In contrast, medium enterprises operate with turnovers of up to ₹250 crore. Given this vast disparity, FKCCI argued that these entities should not be categorised together.
The industry body also advocated for a state-specific procurement policy, urging the Karnataka government to adopt a system similar to the Central Government’s, which mandates sourcing products and services from local MSMEs.
On industrial infrastructure, FKCCI reiterated its demand for land allotment for plastic parks equipped with recycling units. While the Karnataka Industrial The Karnataka Industrial Areas Development Board (KIADB) had previously accepted this proposal; FKCCI stressed the urgent need to boost plastic recycling industries in the state.
Addressing the challenges in land acquisition, FKCCI called for reforms in KIADB and the Karnataka State Small Industries Development Corporation (KSSIDC). The group highlighted that land prices in KIADB industrial areas remain unaffordable for small and medium enterprises (SMEs), making it difficult for entrepreneurs to secure bank loans. FKCCI proposed that KIADB reserve 30% of land for micro and small industries and allocate 80% of industrial area land to large enterprises.
In its recommendations, FKCCI also sought interest subsidies and an exemption from the 9% electricity tax for industrial consumers, particularly MSMEs. Additionally, the body pushed for further reduction in the Agricultural Produce Market Committee (APMC) cess from the current 0.6% and called for modernising APMC yards with enhanced infrastructure.
Raising concerns over the regulatory burden on industries, FKCCI highlighted the high number of outdated and redundant compliance requirements. The organisation emphasised the need for a streamlined system, urging the government to eliminate obsolete regulations and simplify processes to align with the current industrial landscape.
The state budget for 2025-26 is expected to reflect some of these industry concerns, with policymakers likely to assess FKCCI’s recommendations in shaping Karnataka’s economic roadmap.
