Karnataka’s new Industrial Policy for 2025-30 addresses the impact of Artificial Intelligence (AI) and automation on job creation. To encourage businesses to invest, the policy introduces revised minimum job creation requirements. Enterprises investing Rs 50 crore must create at least 25 jobs, with larger enterprises facing higher thresholds: Rs 300 crore investment must generate 150 jobs, and Rs 1,000 crore investment must result in 500 jobs. For ultra mega projects, there will be an additional six jobs for every Rs 50 crore invested.
Karnataka’s New Industrial Policy: Balancing AI Growth with Job Creation Goals
This policy aims to create 20 lakh new jobs despite the growing reliance on AI and automation. Previously, the Industrial Policy of 2020-25 required large enterprises to create 50 jobs for a similar investment amount. Enterprises must meet these new job creation thresholds to qualify for capital expenditure subsidies and production-linked incentives.
Industries Minister M B Patil acknowledged that AI and automation would play a significant role across sectors like medical equipment, smartphones, and chipmaking, and robots may replace human workers in some roles. However, he cautioned it’s too early to predict the full impact on employment.
Industrial Policy: Embracing AI While Promoting Gender Inclusivity and Job Growth
At the Invest Karnataka summit, Google X co-founder Sebastian Thrun emphasized that while AI could lead to the loss of 60% of current jobs, it would also create new career opportunities in emerging fields. The policy also incentivizes enterprises that hire more women, offering bonus incentives for higher female workforce participation.
Overall, Karnataka’s new policy strives to balance technological progress with employment creation, contributing to both economic and social development in the state.
