Karnataka: Cabinet allows KIADB to raise Rs 5000 Cr to develop industrial areas
Karnataka Industrial Areas Development Board (KIADB) from the present Rs 500 crore to Rs 5000 crore to enable it to borrow more from banks and financial institutions.
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The Cabinet, chaired by Chief Minister Siddaramaiah, allowed the KIADB to raise Rs 5000 crore in debt and decided to extend the state guarantee to the loan. In return for the guarantee, the Cabinet decided to levy a 1% commission on KIADB.
The KIADB, which functions under the Industries department, is acquiring 28,741 acres of land in different parts of Karnataka to develop 24 industrial estates. The land acquisition is estimated to cost Rs 26,505 crore and the KIADB has estimated it would require another Rs 5875 crore for developing the estates. Both together would cost Rs 32,380 crore. The KIADB would need about Rs 2000 crore to meet these commitments, according to an official statement.
The Cabinet also decided to impose certain conditions on KIADB to ensure it does not get ensnared in the event of a default. The Cabinet decided that the KIADB must plan repayment of loans in such a way that lending institutions would not have to invoke the government guarantee. The Cabinet also decided that the lending institutions must have a first charge on the income of KIADB.
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