BENGALURU: The Karnataka Cabinet on Wednesday approved the Karnataka Aerospace Policy 2026-31, targeting investments of Rs 60,000 crore and the creation of 60,000 jobs, with the government seeking to expand the state's aerospace, defence, aviation and space manufacturing ecosystem beyond Bengaluru.
Briefing reporters after the Cabinet meeting, Deputy Chief Minister Dr G Parameshwara said the policy would cover the entire state and offer differentiated incentives based on focus and non-focus areas to attract private investment. The government intends to encourage aerospace and defence manufacturing, aviation, space technologies, drones, avionics and related industries.
The policy seeks to leverage Karnataka's existing aerospace ecosystem, including the HAL base in Bengaluru, while encouraging companies to establish manufacturing and other facilities outside the state capital.
The Cabinet also approved the revival of student union elections in colleges and universities from the 2026-27 academic year, aimed at developing leadership qualities, responsibility and democratic values among students.
Dr Parameshwara said the government had taken the decision after detailed consultations and visits to colleges and universities by a committee chaired by minister Dr Sharana Prakash Patil.
The proposed student bodies will have a president, two vice-presidents- one reserved for women , general secretary and two joint secretaries-one reserved for women.
The executive committee will have six members, including two women.
“There will be no caste-based reservation. We do not want to promote caste-based politics in educational institutions” Dr Parameshwara said.
He said managements of colleges and universities would have to conduct the elections. At the same time, the government would not allow student organisations to function as fronts for political parties. Students, however, could individually be members of political organisations.
Jobs push in backward districts
The Cabinet approved the Udyoga Nidhi scheme, based on the recommendations of the Prof M Govinda Rao Committee, to encourage employment generation in 10 of the state's most backward districts in north Karnataka.
Under the scheme, industries creating new jobs will receive an incentive of Rs 2,500 per worker per month for two years. The government has made a provision of about Rs 300 crore for the programme.
The incentive is intended to encourage companies to create formal employment and meet obligations such as EPF contributions. Industries in sectors including aerospace, defence, drones, automobiles, semiconductors, telecom, biotechnology, medical equipment and other emerging fields will be encouraged to invest in backward regions.
The government will also provide additional incentives for industries located in economically backward areas.
Another industrial initiative, 'Shramika Nivasa', will encourage industries to provide accommodation for workers close to their workplaces. The government will frame guidelines on the size and standards of such housing and offer incentives, including tax concessions.
Large industries will be encouraged to construct worker accommodation, with the initiative also covering IT and biotechnology companies. The government plans to implement the scheme in phases.
Textile policy targets Rs 20,000 crore investment
The Cabinet also approved the New Textile and Readymade Garments Policy 2026-31, targeting Rs 20,000 crore investment over five years and employment generation in the textile and apparel sector.
The policy envisages apparel parks and incentives to encourage industries to move beyond Bengaluru to identified focus taluks. The government expects to provide around Rs 4,000 crore in investment to attract the targeted investment.
Measures include credit-linked capital subsidy and power subsidy for eligible units, with 33 focus taluks identified for development.
Mechanised farming gets Rs 152 crore push
The Cabinet approved the Chief Minister 'Negila Yogi' scheme, with an estimated outlay of Rs 152.28 crore, to encourage mechanised agricultural operations and help farmers whose lands remain fallow due to lack of access to tractors and other farm machinery.
The scheme will initially be implemented in 31 taluks, one in each district, as a pilot project. Farmers owning up to three acres will be covered with their lands ploughed free of cost by using the tractors which the government will on a rental basis. The government is also considering procuring around 500 tractors.
If successful, the scheme will be expanded to all taluks.
Dr Parameshwara said the initiative was aimed at bringing cultivable but fallow land back under production. He cited the successful use of tractors in Gauribidanur as one of the examples that prompted the government to institutionalise the initiative.
Drone facility, AI Hub approved
The Cabinet approved the establishment of a drone testing facility at Jedarahalli in Chintamani taluk of Chikkaballapur district at an estimated cost of Rs 42.83 crore.
The facility will support testing and development of drone technologies, including applications in disaster management, healthcare and other public services.
It also approved a Karnataka Artificial Intelligence Hub at IIIT-Bengaluru at an estimated cost of Rs 35 crore. The hub will train students and graduates through internships, mentorship, practical projects and case studies and is expected to complement the proposed AI University.
Under the Karnataka Startup Policy 2025-30, the Cabinet approved the Government First initiative under the ELEVATE programme, with an allocation of Rs 25 crore, to make the government an early adopter of emerging technologies through innovation-led public procurement.
Shakti Smart Cards
The Cabinet approved the Shakti Smart Card project for KSRTC at an estimated cost of Rs 237 crore.
The smart cards will primarily function as identification for women beneficiaries travelling under the Shakti scheme and enable the government to digitally record travel-related information. Dr Parameshwara said caste details would not be collected while issuing the cards.
Healthcare gets digital push
The Cabinet approved Rs 10.78 crore for IT hardware infrastructure for the Tele-ICU project, connecting 185 government health institutions through 11 hubs.
The first phase of the Karnataka Digital Radiography Mission was also approved at an estimated cost of Rs 40.50 crore, under which up to 162 eligible X-ray systems in government hospitals will be upgraded to digital radiography systems.
Another Rs 20.39 crore will be spent on equipment for ear surgeries and hearing-loss screening in 50 taluk hospitals, besides engaging 50 audiologists on a contractual basis.
Rs 493 crore Tega Siri programme
The Cabinet approved the state-wide Tega Siri tree development programme at an estimated cost of Rs 493.09 crore.
Under the programme, farmers will be encouraged to grow teak trees on suitable roadside and other lands and nurture them for 10-15 years. Dr Parameshwara said farmers would receive 70 per cent of the proceeds when the trees are harvested, making the initiative a farmer-oriented programme.
Ring roads for towns
The Cabinet also considered a GIS-based Road Network Grid Plan covering urban areas and towns with approved master plans or those where master plans are under preparation.
The government plans ring roads around taluk and district headquarters and other urban centres, with an impact zone around the roads. Dr Parameshwara said Karnataka's urbanisation had reached about 46 per cent and the objective was to make emerging towns more liveable.
Youth association, house sites
The government plans to restart membership enrolment for the Bharat Jodo Youth Association after resolving technical issues. Of the targeted 10 lakh associations, about 7.36 lakh have already been registered. The programme will cover youth aged 16-35 without discrimination based on caste, religion or political affiliation.
The government is also planning to distribute around 15 lakh house sites across the state, with preference to SCs, STs, OBCs and minorities. About five lakh sites are proposed in the first phase during September and October, with around 10,000 acres identified.
Drought loss pegged at Rs 18,000 crore
On drought, Dr Parameshwara said 101 taluks had already been declared drought-affected, while ground-truthing had been completed in 24 of another 42 taluks. The remaining 18 would be assessed shortly.
The state has estimated losses of around Rs 18,000 crore and will submit a memorandum to the Centre seeking assistance under the NDRF guidelines.
He said the assessment was being carried out using objective parameters, including rainfall, satellite imagery, soil moisture, green cover and dry spells, and denied any political influence in declaring drought-hit taluks.
Dr Parameshwara recalled that Karnataka had sought substantial assistance during the previous drought but received Rs 3,500 crore only after approaching the Supreme Court.
“We hope that it will not be repeated this time,” he said.
He also said the state would continue to seek assistance for farmers, including consideration of loan-waiver measures, while maintaining that a national-level farm loan waiver was primarily a matter for the Centre.
NICE issue not discussed
Dr Parameshwara said the NICE land and site-allotment issue was not discussed at the Cabinet meeting.