Cabinet okays new IT policy

Move to expedite project clearances and help start-ups

Faced with stiff competition from neighbouring states, Karnataka is coming out with a new Information Technology (IT) policy that proposes to set up a single-window agency to expedite project clearances and launch a Brand Bangalore Fund to help start-ups.

The State Cabinet on Thursday gave its nod to the policy, which will be unveiled during the three-day ‘IT Biz’ to be held from October 22 in Bangalore.

The government’s decision also comes in the wake of several IT companies expressing their interest to shift base out of Hyderabad following the turmoil over the Telangana issue. 

The new policy, according to IT Minister S R Patil, will not only help arrest flight of investment from Bangalore to Chennai, Pune and Hyderabad, but also aims at positioning Bangalore as the number one IT City in the world in the next seven years. “We have to make every effort to encourage investors to remain with us,” he said.

Brand Bangalore Fund

Regarding the proposed Brand Bangalore Fund, the minister said it was aimed at helping start-ups by extending financial assistance. “We will also provide a plug-and-play facility. However, rules are yet to be framed to give a definite shape to the proposed plan,” Patil said.

Briefing the media on the outcome of the Cabinet meeting, Law Minister T B Jayachandra said the government would like to attract the maximum number of firms, including those on the Fortune 500 list, to the State. The new IT policy will help in this regard, he said.

The policy has set an ambitious target of making Bangalore the number one software exporting city in the world by 2020. At present, Bangalore, with software exports to the tune of Rs 1.65 lakh crore per annum, is in the number two slot, only next to the Silicon Valley in California. The export target in the next seven years is Rs four lakh. Exemptions

Jayachandra said the policy would encourage companies to set up units in Tier II and III cities by providing stamp duty exemption, concession in power tariff and extending exemption from the stand order of the Department of Labour, except the clause to provide protection to women employees.

While the stamp duty exemption would be 100 per cent, the concession for power tariff would be Rs 2 per unit. However, this would be applicable only for Tier II and III cities. Gulbarga, Mysore, Belgaum and Dharwad come under this bracket.

The single-window agency will be headed by the IT minister and will meet regulary to monitor and sanction government clearance required for companies and to address specific grievances, if any. Projects up to Rs 100 crore would be cleared by the agency. The State High-Level Committee headed by the chief minister will clear projects which have an investment of more than Rs 100 crore.

The stamp duty exemption was earlier given only for backward districts. However, the policy extends exemption for firms set up in Mysore and Mangalore.

Asked why project promoters would like to invest in Tier II and III cities, where there is no air connectivity, the minister said the government would address the problem.

To a question whether subsidy for land purchases would be extended to those firms, which are keen on remaining in or coming to Bangalore, the minister replied in the negative.

Sources said ministers hailing from outside Bangalore had opposed the proposal to give any sort of concession to City firms. Subsidy should be the luring factor for those who want to invest outside Bangalore, a section of ministers is said to have argued during the Cabinet meeting.