Bengaluru: The Karnataka government has proposed a major overhaul of the state’s industrial clearance mechanism, with a Bill seeking to provide affidavit-based clearances to industries, introduce deemed approvals if applications are not processed within prescribed timelines and reduce physical inspections during the validity of such clearances.
The Karnataka Industries (Facilitation) (Amendment) Bill, 2026, introduced to amend the Karnataka Industries (Facilitation) Act, 2002, seeks to strengthen the single-window system and create a State Nodal Agency to coordinate approvals and clearances required by investors. The Bill was introduced by Large and Medium Industries Minister M.B. Patil.
One of the key changes proposed is replacing the existing “acknowledgement certificate” with an Affidavit-based Clearance Certificate. For manufacturing industries, the certificate will be treated as the clearances required for setting up the industry for an initial period of three years for MSMEs and five years for large-scale industries, or until commencement of commercial operations, whichever is earlier.
The State Nodal Agency will have to issue the certificate within 15 days for units located within industrial areas and 20 days for units outside industrial areas. If the certificate is not approved within the stipulated period, it will be deemed to have been approved. However, industries availing themselves of the facility will still have to obtain the clearances required before commencing commercial operations.
The proposed system will also bring several services onto a common digital platform. The Bill defines the Single Window System as a one-stop digital platform through which applicants can apply for, track and obtain approvals, licences, registrations, permissions, renewals and other services, besides managing inspections, compliances, incentives and grievances. For services brought onto the system, parallel physical or offline processing will not be permitted except in circumstances notified by the government.
The legislation also proposes a ‘Know Your Approvals’ module, through which investors can identify the approvals, clearances, licences, registrations, inspections and compliances likely to apply to their proposed project. A centralised KYC repository for business users is also proposed, with the aim of ensuring that applicants are not repeatedly asked to submit documents already available with government departments.
The State Nodal Agency will be tasked with receiving and routing applications, coordinating with departments, monitoring disposal within specified timelines and identifying opportunities to simplify, rationalise and digitise procedures. It will also monitor turnaround time for services routed through the single-window system.
The Bill proposes a Central Inspection System, described as a risk-based and technology-enabled system for identifying, scheduling and allocating inspections, besides recording inspection reports and maintaining audit trails. It also proposes that no inspection be carried out during the validity of an affidavit-based clearance certificate except where an inspection is warranted. In such cases, prior approval of the concerned Head of Department and consultation with the nodal agency would be required.
The amendment further provides that the provisions of the Act and rules made under it will have overriding effect, to the extent of service delivery and procedural facilitation, over conflicting provisions in other state laws.
A Coordination Committee comprising senior officials from departments including Industries and Commerce, Revenue, Energy, Municipal Administration, Town and Country Planning, Forest, Environment and Ecology, MSME, Labour, Factories, Mines and Geology, Police and other agencies will support the State Nodal Agency.
According to the Statement of Objects and Reasons, the amendments are intended to modify definitions, strengthen the State Level Empowered Committee, establish a State Nodal Agency, introduce affidavit-based clearance certificates and give the Act overriding effect in matters relating to service delivery and procedural facilitation. The government has stated that the proposed legislation will not entail any additional expenditure at this stage.
