Bangalore, January 31, 2014: Karnataka and Bengaluru have thrived and progressed in the past decade a great deal due to the growth of IT sector. This sector accounts for more than 30% of the IT exports in the country and employs over 1/3rd of the software engineers in the country. From a mere 1.90 lakh direct jobs in 2001 to over 9 lakh jobs today, the sector has turned out to be the largest employer surpassing even employment provided by the State Government. By 2020, Bengaluru will become the single largest IT and technology cluster on the planet in any single location and also the largest employer in the State.The KIG-2020 report has envisaged a goal Rs 4 lakh crores as the expected revenues by 2020 from IT & BPO and ESDM.

A comprehensive proposal providing for incentives, concessions, benefits etcfor the IT/ ITeS/ Start-ups/ Animation / Gaming / Computer Graphics/Telecom/BPO/ KPO / other Knowledge based Industries submitted to the State Cabinet was approved in the Cabinet meeting held on 17th October, 2013.

Employment Linked Incentivisation of Land Allotment (E-LILA) outside Bruhat Bengaluru Mahanagara Palike Limits: Land allotment for IT/ ITeS/ Start-ups/ Animation / Gaming/ Computer Graphics / Telecom / BPO / KPO / other Knowledge based Industries at concessional price shall be linked to employment generation for investments outside Bengaluru. Government will directly subsidise employment created.

Dept. of IT, BT and S&T to be Single Window Agency: Government of Karnataka has authorised Dept. of IT, BT and S&T to act as the Single Window Agency for clearance of IT/ ITeS/ Start-ups/ Animation / Gaming / Computer Graphics/Telecom/BPO/ KPO / other Knowledge based Industries (in place of Karnataka UdyogMitra). For investments up to Rs. 100 Crores, all decisions would be taken by a Committee headed by the Minister for IT, BT and S&T Department with the concerned Principal Secretaries / Secretaries to Government as Members. For investments above Rs. 100 Crores, decisions would be taken by a Committee headed by Chief Minister, which will have Minister for IT, BT and S&T, Chief Secretary and all concerned Principal Secretaries / Secretaries as Members.

Creating Brand Bengaluru 3.0 and Bengaluru First Fund: Brand Bengaluru 3.0 Society and a “Bengaluru First” fund to be set up to promote Bengaluru along the lines of India Brand Equity Fund (IBEF) set up by Government of India in association with CII. The “Bengaluru First” fund will be set up in association with NASSCOM / FICCI / CII / MAIT, under the Chairmanship of Secretary – Dept. of IT, BT and S&T, and Members from the Industry. The“Bengaluru First” fund shall be utilised to establish the credibility of Karnataka as a destination for technology investments in software and IT services, in outsourcing services, as well as Design and Manufacturing of products and services and the rapidly growing animation / Computer-generated imagery (CGI) / media and entertainment industries. A VIP Assistance Cell will be created in the Dept. of IT, BT and S&T, to assist VIP Clients.

Skill Development Policy & Corpus: Skill Development programs will be taken up in association with the Industry for training un-employed youth in basic IT / BPO / Telecom / ESDM etc, skills to be implemented in a PPP mode. The beneficiaries namely, the trainees, shall also bear part of the expenditure towards Skill Development. Government shall facilitate and support to arrange Skill Development financing through Bank loans.

Opportunities for Start-ups: Start-ups companies will be eligible for plug and play space with internet at concessional rates of Rs.5-15 per sft, depending on location. The space may be Government owned/leased or privately leased and allotted. Selection of start-ups by an Apex Committee comprising of Government and IT industry’s eminent people.

Exemption of IT/ ITeS/ Knowledge/Start-up companies from the applicability of Karnataka Industrial Employment (Standing Orders) Rules, 1946

In addition to the Fiscal Incentives and Concessions, Cabinet also approved exemption of these companies from the applicability of Karnataka Industrial Employment (Standing Orders) Rules, 1946, for a period of 5 years, with appropriate clause for protection of women employees and prevention of sexual harassment in work place.

ESDM Brown Field Cluster

Karnataka has got the in principle approval on 30th January 2014 for the first Electronic System Design and Manufacturing (ESDM) brown field cluster development project from the  Department of Electronics and Information Technology(DeitY), Government of India in Electronic City, Bengaluru. This project is to be executed at an estimated cost of Rs 85.15 Crores and in an area of about 1.167 acres in Electronic City, Bengaluruand is expected to accelerate the growth of ESDM based industry in Karnataka.

Karnataka New Age Incubation Network

In the KIG 2020 report, Entrepreneurship Development and Mentoring is one of the Ten Initiatives for creating new opportunities and jobs. One of the proposals under this head is to build ‘Karnataka New Age Incubation Network’ to be located in chosen colleges that are in the emerging ICT centers.

The Department of Information Technology, Biotechnology and Science & Technology in order to implement the Budget announcement of Government of Karnataka, has decided to implement the above proposal through KBITS to encourage Entrepreneurship and Innovation it is proposed to establish Incubation Centers in ICT sector in association with the selected Engineering Colleges at District headquarters.

The Sub Committee under the Chairmanship of Secretary, Department of IT, BT and S&T, after taking inputs from various sources has finalized 9 Engineering Colleges across the State as below.

  • National Institute of Engineering, Mysore

  • Siddaganga Institute of Technology -Tumkur,

  • PoojyaDoddappaAppa college of Engineering – Gulbarga,

  • SDM college of Engineering, Dharwad

  • BLDEA’s VP Dr. P G Halakatti College of Engineering and Technology, Bijapur

  • Basveshwara College of Engineering, Bagalkot

  • NMAM Institute of Technology Nitte

  • KLS Gogte Institute of Technology, Belgaum.

  • Jawaharlal Nehru National College of Engineering, Shimoga

The programme would encourage entrepreneurs by giving first preference to students, research scholars and alumni of the chosen colleges. The programme will cater to the projects that solve local problems and find solutions to local needs (district and state) rather than global problems and needs.Funding assistance will be provided by the First Party only for the management of the programme and the execution of the projects at Rs. 40 lacs per college per year.

The focus will be more on building an ecosystem fostering entrepreneurship rather than building physical space and purchasing expensive equipment

All incubation centers will be networked to exchange experiences and learn from one another.

They will also be connected with proposed Mobile Applications Center, Center of Excellence (COE) for ESDM located in Bengaluru for accessing certain resources avoiding any duplication.

The most important resource of the Programme will be local and remote mentors and the incubation centers will have tie-ups with local industry leaders and to those who are outside (in Bengaluru/ abroad) who may be hailing from the districts as mentors.

REGISTRATION OF ESDM COMPANIES

Electronic System Design and Manufacturing (ESDM) is the fastest growing segment of the Information and Communications Technology (ICT) sector. As per the National Electronics Policy-2012 (NEP-2012), ESDM is expected to grow to USD $400 Billion by the year 2020 and will generate a total employment of over 28 million.

Government of India has already announced Modified Special Incentive Package Scheme (M-SIPS) that provides various incentives to ESDM Companies.

In order to attract investments to Karnataka as compared to other States in the ESDM Sector, Karnataka has come up with Karnataka ESDM Policy which has additional incentives to encourage the growth of ESDM sector

The objective of the Karnataka ESDM Policy is to facilitate, promote and develop the “ESDM” sector in the State of Karnataka and make Karnataka a preferred destination for investment in sectors like Telecommunications, Defense, Medical, Industrial, Automotive, Consumer Products, applications and components, parts, and accessories required for these applications.

The major targets set in Karnataka ESDM policy are as follows:

  • Emerge as the leading contributor to India’s ESDM sector by accounting for at least 10% of the USD $400 billion by 2020.

  • Generate over 20% of the country’s total ESDM exports target of USD $80 billion in 2020.

  • Make Karnataka the country’s preferred destination for investments in ESDM.

  • Generate atleast 2,40,000 new jobs, 25% of India’s PhD’s and 5000 patent filings in ESDM sector in Karnataka by 2020.

In order to achieve these targets, the Department of IT, BT has initiated registration of K-ESDM Companies. In the first phase Eight Companies as below have been registered as Karnataka ESDM Companies and the Registration Certificates are being issued to these Companies.

  1. M/s. SIGNALCHIP Innovations Private Limited., Banaswadi, Bengaluru-560043

  2. M/s. CERIUM Systems Private Limited., Whitefield, Bengaluru-560066

  3. M/s. BYDESIGN

  4. M/s. Aura Semiconductor Private Limited

  5. SPARR Electronics limited

  6. Saankhya Labs Private Limited

  7. TEJAS Networks Limited

  8. Aristos Electronics Manufacturing Services Private Limited