Salient features of the Karnataka Semiconductor Policy
announced on 2nd Feb 2009 by Government of Karnataka based
on the suggestions of India Semiconductor Association (ISA).
Karnataka is leading state in India in IT, electronics
and semiconductor industry. 80% of the semiconductor companies
in the world have major operations in Bangalore, capital
city of Karnataka state of India. Now the Bangalore and
Karnataka going step ahead by announcing Karnataka semiconductor
policy to make the place more suitable for electronics and
semiconductor manufacturing. Here below are the features
of this policy.
To encourage setting up of semiconductor units in tier-2
cities, other than Mysore, Mangalore, Hubli, an incentive
of investment-promotion-subsidy would be provided in accordance
with the Karnataka Industrial Policy 2009-2014.
Govt. of Karnataka would provide additional amount of Rs.
25 crores, toward 26 percent contribution to the KITVEN
(Karnataka IT venture capital fund) IT Fund for raising
funds from the market to assist startup semiconductor units
engaged in design and embedded software.
Govt. of Karnataka would provide financial assistance to
firms for filing IP in accordance with the incentives provided
in the industrial policy.
Govt. of Karnataka will provide assistance of 50 percent
of the total cost toward purchase of proposed equipment
for augmenting the Orchid Tech Space in the STPI to a Characterization
Lab. The remaining funds would come from the industry or
mobilized through PPP business model. This Lab will be a
one-stop solution for hi-tech facilities and will spur growth
of R&D in future technology without financial burden
to budding entrepreneurs.
ATMP units will be encouraged with special incentives in
the proposed ITIR near BIAL (Bangalore International Airport),
Bangalore. (Special incentives for ITIR to be announced
separately).
Govt. of Karnataka would provide all encouragement and assistance
to the solar PV manufacturing units under the Karnataka
Renewable Energy Policy.
To encourage setting up of ATMPs in the state, Govt. of
Karnataka would provide incentives to units set up in the
state by lowering the threshold investments for ATMPs/ecosystem
units with investments above Rs. 400 crores and up to Rs.
1,000 crores. Incentives would be provided on a case-to-case
basis approach based on specific employment potential.
As a policy support, to encourage innovation and R&D
in chip design, product development, telecom, etc., the
Govt. will set up a fund known as 'Karnataka Fund for Semiconductor
Excellence' of Rs. 10 crores. This fund will be available
to the private companies covering up to 50 percent of their
R&D expenses, subject to a limit of Rs. 10 lakhs per
unit. This financial assistance would be subject to repayment
of 10 percent of the profit (after tax) annually for a period
of 10 years. Preference would be given to fresh engineering
graduates by identifying talent through projects submitted
in the college and start-up companies.
A committe comprising of representatives of VTU, ISA, industry,
scientists, and financial institutions would be set up to
monitor the activities and functioning of the fund.
Karnataka Power Corp. and Karnataka Renewable Energy Development
Ltd would take steps to develop solar farms on joint ventures/PPP
mode in Bijapur, Gulbarga, Raichur and Bellary districts.
Govt. to set up a focused school under IIIT at a cost of
Rs. 10 crores and strengthen the research labs in the institute
at a cost of Rs. 5 crores with a contribution of 25 percent
from the industry.
Fiscal incentives would be provided to semiconductor units
as per the Karnataka Industrial Policy 2009-2014.
- Investment promotion subsidy.
- Exemption from stamp duty to MSME, large and mega projects.
- Concessional registration charges to MSME, large and mega
projects.
- Waiver off conversion fine to MSME, large and mega projects.
- Exemption from entry tax to MSME, large and mega projects.
- Incentives for export oriented enterprises for MSME, large
and mega projects.
- Subsidy for setting up ETPs to MSME, large and mega projects.
- Interest free loans on VAT to large and mega projects.
- Anchor units subsidy to first two manufacturing enterprises
with minimum employment of 100 members and a minimum investment
of Rs. 50 crores.
- Special incentives for enterprises coming up in low HDI
districts for large and mega projects.
- Interest subsidy to micro manufacturing enterprises.
- Exemption from electricity duty to micro and small manufacturing
enterprises.
- Technology upgradation, quality certification and patent
registration for micro and small manufacturing enterprises.
- Water harvesting/slash conservation measures to small
and medium manufacturing enterprises in all zones.
- Energy conservation, small and medium manufacturing enterprises
in all zones.
- Additional incentives to the enterprises following reservation
policy of the state.
- Refund of cost incurred for preparation of project report
for micro and small manufacturing enterprises.
Related articles from EE Herald on India Semiconductor and
Karnataka Semiconductor industry.
