Bengaluru: In a major relief to Medium, Small and Micro Enterprises (MSMEs), the Karnataka Cabinet has yesterday cleared an amendment to the Karnataka Industrial Area Development Board (KIADB) rules for allotting lands on 10-year lease-cum-sale instead of 99-year lease basis.

Ten-year lease-cum-sale would be applicable only for land parcels less than 2 acres. The Cabinet took a decision to drop the stiff clause of 99-year lease for allotment of land or plots to industries and infrastructure projects.

Land on sale-cum-lease basis was being provided by the KIADB to Single Unit Complexes on a 15-year sale-cum-lease but allotment of land for Micro, Small and Medium Enterprises came with a 99-year lease clause.

Prior to 2014, the State government had fixed a tenure of 10-year lease-cum-sale for land allotted for industrial activity. Due to severe shortage of land for industrial activity and also as land was getting diverted for purposes other than industries, the government, in 2014, brought in an amendment and increased the lease period to 30 years, and subsequently to 99 years.

Industry and trade bodies had been opposing the 99-year land lease allotment stating that it was impacting access to credit. Briefing reporters after the Cabinet meeting, Law Minister T.B. Jayachandra said the required rules will be amended by withdrawing the 99-year lease clause for land allotment to industries.