Many of the Small Scale Industries are unable to put up the treatment systems individually, the concept of CETP's is envisaged to benefit such industries in treating its effluent before disposal whether it is in stream, land, sewerage system or in sea. CETPs are set up in the industrial estates where there are clusters of small scale industrial units (SSIs) and where many polluting industries are located.

The Ministry of Environment & Forest, Govt of India has launched the centrally sponsored scheme, namely, Common Effluent Treatment Plant (CETP) in order to make a cooperative movement of pollution control especially to treat the effluent, emanating from the clusters of compatible Small-Scale Industries (SSIs). The major objective of the CETP is therefore, to reduce the treatment cost to be borne by an individual member unit to a maximum while protecting the water environment to a maximum.

The proposal for setting up of CETPs by such industries is to be submitted by the CETP Association to the Karnataka State Pollution Control Board, which after examining the proposal and obtaining commitment from the concerned State Government regarding its contribution will give their recommendation to the Ministry of Environment and Forests for consideration , the Ministry examines the proposal and takes the decision through a Screening Committee constituted in this regard for providing support from the Central Government.

The pattern of financial  subsidy for construction of the CETP is as follows:

The Ministry releases the funds for the approved projects which is the matching grant to the amount released by the concerned State Government, subject to the bank guarantee to be taken from the CETP associations for the amount released by the Central Government, The CETP Company should meet the remaining cost by equity contribution by the industries and loans from financial institutions. Funds released for the CETPs should be utilized for the CETP only and not for payment for any debts/bank loan s, etc.

The large and medium scale industries are not entitled for any subsidy meant for SSIs.

At Present following CETPs are operating/under construction in the State :

At the instance, Department of Ecology and Environment, Government of Karnataka, & the Karnataka State Pollution Control Board have  prepared techno-economic feasibility reports for establishment of Common Effluent Treatment Plants at the following places :