Several incentives to auto units

By Our Special Correspondent

BANGALORE, FEB. 11. The Karnataka Government has come out with a new automobile policy, stated to be the first of its kind in the country, to lure investments in the automobile sector, with particular reference to the auto components industry.

The Minister for Large and Medium Industries, Mr. R. V. Deshpande, told presspersons here today that under the auto policy the Government would offer several incentives, the chief of which would be the exemption of entry tax for a period ranging between five and seven years based on the location of the auto industry. All new units set up from January last to March next would be eligible for this offer.

He said that under the automobile policy, the Karnataka Industrial Areas Development Board would establish two auto parks at Bidadi in Bangalore District and another at the Dharwad Industrial Growth Centre. The two auto parks would primarily serve the component industry and provide the infrastructure including effluent treatment and disposal facilities, uninterrupted power and water supply etc. The State Government would provide financial support to the KIADB to establish the auto parks within two years.

To help the investors secure speedy clearances and approvals for their proposals, an ``Auto Guidance cell'' comprising representatives of the Government and the industry would be constituted. The guidance cell would also serve as a single window agency. The officers of the Government on deputation with the agency would be vested with powers to provide clearances and approvals required to set up an auto industry. The two auto parks would also be declared as industrial townships under the provisions of the 74th amendment to the Constitution.

During the past five years, the State Government had been successful in attracting four major automobile industries. They were a Rs. 180-crore scooter factory of the TVS at Nanjangud, a Rs. 150-crore heavy duty truck manufacturing facility of the Volvo at Hoskote, the Rs. 800- crore car manufacturing unit of Toyota at Bidadi and a unit of the Tatas to manufacture construction equipment and special purpose vehicles at Dharwad.

Mr. Deshpande said that unlike in Tamil Nadu, Pune and Gurgaon, Karnataka did not have a major concentration of automobile component manufacturing industry. In the view of the State Government there was good scope for attracting huge investments in the auto component sector.

He said that during the recent trip to Davos to attend the World Economic Summit, the Chief Minister, Mr. S. M. Krishna, and himself called on the Executive Vice President of General Motors, Mr. Louis R.Hughes regarding the establishment of a new green field car manufacturing unit in Karnataka. The General Motors, which manufactures the Opel brand of cars, was stated to be looking for a manufacturing site in South India, apparently with an eye on the market.

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