The cost of doing business in Karnataka is now significantly higher than in neighboring countries, such as Tamil Nadu, Telangana and Andhra Pradesh, and such escalations associated with incorrect minimum wage structure, putting high pressure on small entrepreneurs in the state on Wednesday.
“The cost of doing business in Karnataka is now significantly higher than in neighboring countries, such as Tamil Nadu, Telangana and Andhra Pradesh,” he said.
After a wide consultation with the Member Industry Association, FKCCI expressed serious concerns about the recent increase in minimum wages across Karnataka and emphasized its devastating impact on the industrial landscape of the state, especially micro, small and medium -sized enterprises (MSME).
He performed at a special meeting organized by a business body for his member association here and demanded an urgent re -evaluation of the minimum wage to prevent the closure of MSME units in the state.
“The non -transparent wage increase, without assessing the paid capacity of small industries, leads to a situation where many of them are considering closure,” he warned.
At a meeting on Wednesday, representatives of industrial assets were revealed by Peenya, the largest Asian industrial cluster in Asia, that an increase in provisions with variable expensive path (VDA) and the resulting wage increase has made many small units of financially inadvertent, and approximately 20% of units were endangered by the conclusion of the government.
The high minimum wage, albeit well meant, eroded the competitive advantage of Karnataka in attracting investment, especially in the industries of work demanding, such as textiles, light engineering, electronics and packaging, added Mr. Balakrishna.
The business authority also warned that if the high wage regime continued, jobs would be lost throughout the state and the loss of tax revenues to the Government.
“Under the high structure of the minimum wage, MSMES is subject to closure or decides to move to neighboring countries where the minimum wages are lower than in Karnataka,” he said.
Some recommendations of the FKCCI government include the introduction of differentiated boards for minimum wages for MSMES vs. Large industries, immediately convene the Committee for Rationalization of wages and provide relief through subsidies for power tariff, exceptions to withdraw from work or support of working capital.
The commercial authority also asked the Central Government to enforce the uniform national ceiling of the minimum wage, announced incentives or subsidies related to wage under MSME and reduce the regulatory burden on small industries to maintain employment.
FKCCI also urged various trade unions and clothing of civil society to participate in constructive dialogue and acknowledge the unique MSME vulnerability, which together contribute more than 45% of industrial jobs in Karnataka.
Published – April 23, 2025 21:33
