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Karnataka approves new IT policy; to create 60 lakh jobs

Last Updated 03 September 2020, 15:18 IST

Karnataka has unveiled its new IT policy for 2020-25, which aims to generate over 60 lakh direct and indirect jobs in the sector. The state government says it wants to “retain its leadership position...through strategic policy interventions.”

The policy was approved by the Cabinet on Thursday.

Under the policy, Karnataka wants to contribute about 30% to India’s goal of becoming a trillion-dollar digital economy, Deputy Chief Minister CN Ashwath Narayan, the state’s IT/BT minister, said.

The policy also looks to shift the focus beyond Bengaluru. The government wants to “enable a remote, distributed labour force beyond Bengaluru, required for the IT industry,” the policy says.

As part of the policy, a State Cyber Security Policy will be formulated to “employ the necessary data protection safeguards and create and sustain a safe and resilient ecosystem,” Narayan said.

According to the Minister, the IT sector in Karnataka is one of the largest employment-generating industries with 80% of global IT firms that have India operations and R&D centres based out of the state.

The new policy replaces one that covered a period of 2014-19. The first IT policy was formulated way back in 1997.

The new policy promises infrastructure development “to provide impetus to local industry and encourage investments and growth beyond Bengaluru,” the government said. Similarly, the policy will look at market development for IT/ITeS companies by easing public procurement norms and hosting events “specifically beyond Bengaluru.”

Ecosystem engagement, talent development (skilling) and ease of doing business are other strategies proposed.

Under the previous i4 (IT, ITeS, Innovation and Incentives) Policy that expired last year, the government managed to set up industry-partnered K-Tech Innovation Hubs in 24 districts, the Karnataka Unit for International Co-operation (KUIC) was set up, nearly 500 companies were registered to avail various incentives, 21 projects worth Rs 6,728 crore generating 1.73 lakh jobs were approved among other things.

The Cabinet also approved a special incentives scheme for the Electronics System Design & Manufacturing (ESDM) sector, with which the government expects over Rs 5,000 crore in investments and 43,000 direct employment by 2025.

The government will slash 25% of the land price (up to 50 acres) for investments in ESDM outside Bengaluru Urban and Bengaluru Rural districts. A similar capital investment subsidy of 20% will be given on the plant and machinery cost. Other sops include 100% reimbursement on stamp duty, registration and land conversion charges, power tariff subsidy of Rs 1 per unit for five years, 1% of annual turnover for five years as production-linked incentive among others.

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(Published 03 September 2020, 13:26 IST)

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