Karnataka Cabinet Approves Aerospace Policy 2026-31 and Employment Fund Programme
The Karnataka Cabinet, on September 9, approved the Aerospace Policy 2026-31, which aims to strengthen Karnataka's position as a hub for aerospace manufacturing and innovation. The policy targets Rs 60,000 crore in investments and 60,000 jobs over the next five years.
Deputy Chief Minister G Parameshwara stated that the policy provides varying levels of financial assistance based on the location and category of projects. For instance, projects in Zone 1 will receive a 30 percent capital subsidy, while other zones will have varying levels of support.
Employment Fund Programme
The Cabinet also approved an Employment Fund Programme to encourage industries to create formal jobs in less-developed districts. The programme has an allocation of Rs 300 crore and will cover 10 backward districts, including Yadgir, Bidar, Koppal, Raichur, Kalaburagi, Vijayapura, Belagavi, Vijayanagara, Haveri, and Gadag.
Under this programme, industries will receive Rs 2,500 per employee for two years, linked to the employer's provident fund contribution. Additionally, industries setting up in backward talukas will receive investment-linked support of up to 10 percent of investment, while projects in most-backward talukas will be eligible for assistance of up to 20 percent.
Other Initiatives
The Cabinet also cleared several other initiatives, including:
* Shramika Nivasa, a worker‑housing programme aimed at providing accommodation close to industrial workplaces. * An Artificial Intelligence Hub to be established at IIIT‑B, which will provide AI training, internships, mentorship, research support, startup incubation, and access to technical facilities. * A drone testing facility in Chikkaballapur, which is claimed to be the first such facility in India. * A 'Government First' technology procurement framework to promote the adoption of emerging technologies.
Significance and Context
These initiatives are expected to promote aerospace, defence, automobiles, electric vehicles, and semiconductor industries in Karnataka, particularly in backward districts. The Aerospace Policy 2026‑31 is likely to support major aerospace projects already planned in Karnataka, including aircraft manufacturing by Tata and Hindustan Aeronautics Ltd's production of 97 Light Combat Aircraft.
The Employment Fund Programme and other initiatives aim to create formal jobs, encourage industries to set up in backward districts, and promote overall economic growth in Karnataka.
What to Watch
Readers should watch for the implementation of these policies and programmes, including the establishment of the Aerospace Policy 2026‑31, the Employment Fund Programme, and other initiatives. The success of these initiatives in attracting investments, creating jobs, and promoting economic growth in Karnataka will be crucial to watch.