Bengaluru's Peenya Industrial Area gets special investment region status
Bengaluru: Peenya Industrial Area, once hailed as the largest industrial hub in Southeast Asia but now struggling with deteriorating infrastructure, has been officially recognised as a Special Investment Region (SIR) by the Karnataka govt.
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This would facilitate the creation of an Industrial Township Authority.
According to a govt notification issued on June 9, Peenya's 1st, 2nd, 3rd, and 4th phase industrial areas—covering a total of 1,461.5 acres—will be brought under the purview of the Karnataka Special Investment Region Act-2022. The Karnataka Industrial Areas Development Board (KIADB) has been appointed the designated Industrial Township Authority for Peenya.
Under this framework, KIADB will be responsible for collecting property taxes from industrial units in the area. Of the total tax collected, 70% will be allocated towards the development of civic amenities, including road infrastructure, sanitation, waste management, and other essential services. The remaining 30% will be remitted to the Bruhat Bengaluru Mahanagara Palike (BBMP).
A senior official from the department of commerce and industries said: "The establishment of an Industrial Township Authority will ensure better utilisation of tax revenue for enhancing civic infrastructure and addressing the specific needs of industrial units.
ELCITA, which regulates Electronics City, has set a strong precedent for how such townships can be successfully managed. Across the state, we now have 18 Special Investment Regions developed under the Karnataka Special Investment Region Act.
" KIADB is expected to roll out mechanisms for tax collection from industries within Peenya.
Home to 3,500 industries
Industrial representatives welcomed the move, calling it a major breakthrough.
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The designated region is home to nearly 3,500 industries and provides employment to over 8 lakh people. The demand for township status dates back to the 1990s. While Electronics City has long had its own township authority, Peenya—despite being a manufacturing powerhouse—remained without one. Peenya's industrial foundation was laid between 1970 and 1974 after the Karnataka Industrial Areas Development Board (KIADB) acquired the land in 1969.
The estate developed over four phases across 1,800 acres, with parts handed over to other local administrations to support small and micro enterprises. Additionally, the broader area includes 25 privately managed industrial pockets.
A Regional Development Authority comprising 13 members will be formed and it will function as a special-purpose vehicle under the state govt. Industrialists said the move could finally resolve long-pending issues related to poor roads, drainage, lighting, traffic management, and civic amenities, and help attract fresh investment.
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Shiva Kumar R, president of Peenya Industries Association
Until now, we've had to route our grievances to two MLAs and six BBMP ward leaders. However, this new authority will centralise decision making. We've paid taxes for decades but received little in return—because we aren't a vote bank. Now, with a dedicated body, we can expect proper roads, lighting, drainage, and water. Peenya contributes 45% to India's machine tool supply, with strong ties to the auto, space, and garment sectors.
Better infrastructure can push growth further
Arvind Burji, industrialist and former president of PIA and KASSIA
This was a big step but Peenya still has a long way to go. Peenya makes everything from pins to aircraft parts, but infrastructure is our biggest roadblock. We've been demanding township status since 1996–97 for planned amenities like drainage, housing, and civic facilities. Today, even a 5 km commute takes over an hour due to traffic. Without better infrastructure, banking support, and vendor networks, investors won't come here
Prakash Raikar, a metal industry owner at Peenya IInd Stage since 1987
I've witnessed Peenya's growth over the years, but our decades-old demand for township status hasn't moved much—ownership still rests with KIADB. We're glad about the special status, but cautious. Despite being major revenue contributors, development funds rarely come back to us
Jacob Crasta, eco-friendly packaging industry owner at Peenya IInd Stage for the last 48 years
Since we are not voters in the area, most of the revenue we generate is not being used for our development, resulting in the current dismal infrastructure. Now, with a dedicated body in place where our voices and demands can be heard, we believe we can develop ourselves like ELCITA
MG Balakrishna, chairman, FKCCI
Peenya, one of the oldest industrial hubs, has long deserved this recognition—ideally, it should have come much earlier. We have called for equal representation from local industries in the committee to ensure effective implementation
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Key demands of stakeholders
- Immediate upgrades to roads, stormwater drains, and street lighting to ensure smooth movement and worker safety
- Instalment of a Common Effluent Treatment Plant to support over 600 electroplating and chemical-based units.
- Regular and scientific waste collection
- The new authority must be empowered with full township-like autonomy, similar to what Electronics City enjoys under ELCITA
- At least 70% of tax revenue generated from Peenya must be reinvested locally to improve core infrastructure and services.
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How SIR will be a game changer
- A single-window governance system will replace the current maze of MLAs, multiple BBMP zones, and departments, reducing delays.
- Infrastructure projects like roads, power upgrades, and water supply will get cleared and executed much faster.
- Improved facilities and streamlined operations will attract new domestic and international investments to the region.
- Expected to generate four lakh jobs, particularly in machine tools, automotive, aerospace, and garment manufacturing.
- With better support, the current 45% contribution to India's machine tool would boost further.
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