BENGALURU: Intending to enhance the state’s Information Technology industry’s contribution to at least 30 per cent of India’s trillion-dollar digital economy vision, the Karnataka Government announced its new IT Policy 2020-2025. Much like in the Industrial Policy, incentives have been linked to districts categorised as zones and industries investing outside Bengaluru receiving more subsidies.
The new IT policy aims to create 60 lakh direct and indirect jobs over the next five years by facilitating ecosystems in new regions outside Bengaluru Urban and Rural districts. The cabinet also approved a Special Incentives Scheme for Electronics System Design and Manufacturing (ESDM) sector to attract industries moving out from China.
“In the IT sector, we have achieved a level of maturity in Bengaluru and it is now time to take it to Tier-II and Tier-III cities. We are calling it ‘Beyond Bengaluru’. The goal of this policy is to boost IT penetration and innovation in the state holistically. The focus will be on employment generation, which is currently at 30-32 lakh, and we want to catapult it to 60 lakh,” said Meena Nagaraj C N, Director, IT & BT and Science and Technology on the emphasis on ‘Beyond Bengaluru’ in the new IT policy.
Financial aid up to Rs 3 crore for IT hubs
Under the new IT policy, a host of subsidies and incentives are being offered to industries outside Zone-3 (Bengaluru Rural and Urban) including financial assistance up to Rs 3 crore for IT hubs and clusters, assistance of Rs 2 crore for co-working spaces or plug-and-play infrastructure, reimbursement on lease/rental up to Rs 3 lakh (at the rate of Rs 10 per sqft) or Rs 6 lakh (at the rate of Rs 1,000 per seat), quality certification cost reimbursement up to Rs 6 lakh, marketing cost reimbursement of up to Rs 5 lakh per entity, reimbursement of PF/ESI up to Rs 10 lakh per company, patents cost reimbursement of Rs 2 lakh for domestic and Rs 10 lakh for international patent.
“We are expecting the IT industry to grow from $52 billion to $300 billion by 2025. We will spend around Rs 2000 crore in the ESDM sector. We will directly be spending about Rs 102 crore on the IT policy, excluding stamp duty and power tariff concession,” said Deputy Chief Minister and Minister for IT & BT Dr C N Ashwath Narayan. Exemption on stamp duty up to 75 per cent will be given for industries which will be set up in Mysuru, Hubballi, Dharwad and Mangaluru. For all other zones outside Bengaluru Urban and Rural, stamp duty will be exempted completely.
Concessional power tariff, R&D support in the form of matching grants (in collaboration with industry) of up to a maximum of 33% of the total project R&D cost, up to Rs 1 crore, are other features of the IT policy. In a bid to attract Electronics System Design and Manufacturing (ESDM) companies moving out of China, the Karnataka Government has announced additional incentives for industries willing to set up shop here.
The state has announced 25 per cent capital investment subsidy on land for industries outside Bengaluru Urban and Bengaluru Rural districts for land area up to 50 acres on procurement costs. “This is exclusively to attract investments in ESDM sector. To compete with other states, we had to additionally incentivise it over and above incentives offered by the Centre. We are bringing in solar modules too because we are looking at clean tech since it has a similar ESDM ecosystem. We can add value to reduce carbon footprint,” said Meena Nagaraj C N, Director, IT & BT.
Infosys to acquire US firm
IT services firm Infosys on Thursday said it will acquire US-based product design and development firm Kaleidoscope Innovation for up to USD 42 million (about Rs 308 crore). This is the second acquisition by Infosys after it acquired Simplus.