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Date: 02-02-14

Electronics gets attention in the Karnataka's new IT incentives

The growth path of IT industry in Karnataka and more specifically in Bangalore is only looking better and wider. After witnessing phenomenal growth in last two decades, IT continues to grow its share both in revenue and job creation, better than any other industry in Karnataka and any other state in IT sector. From 1.9 lakh direct jobs in 2001, IT sector now offers close to 10 lakh direct jobs in Karnataka, more than the employment provided by state government. The future looks to be even brighter. Department of Information Technology, Government of Karnataka plans to double the job creation by IT by 2020, a 20 lakh direct jobs by 2020 is the target. Government of Karnataka has announced new attractive incentives to put the IT sector on fast-track of growth.

Unfortunately there is not much electronics product manufacturing in Bangalore and Karnataka compared to what is happening in software development and services for business and other applications. With much of the electronics hardware such as computer, tablet and smart phones are getting imported creating imbalance in trade, Government of India is promoting electronics manufacturing in big way. In line with that initiative, Government of Karnataka started giving some incentives to electronics system design and manufacturing (ESDM) also which comes under of Department of Information Technology.

Below incentives for electronics and semiconductor industry are announced by Department of Information Technology at a press meet held on 31st of January 2014, in the presence of S. R. Patil, Minister for Department of Information Technology, Biotechnology and Science of Technology; Planning and Statistics, Government of Karnataka and Srivatsa Krishna, Secretary, Department of Information Technology, Biotechnology and Science of Technology, Government of Karnataka.

1. Government of India has given in principle approval for the first electronic system design and manufacturing brownfield cluster development project in electronics city, Bangalore. This project is estimated at a cost of Rs 85.15 crore covering an area of about 1.167 acres in electronics city Bangalore. This initiative is exclusively for electronics industry.

2. Karnataka is creating incubation centers to encourage entrepreneurship and innovation. As part of the larger initiative, Department of IT has finalised nine engineering colleges to set up incubation centres in their campuses. The colleges include:

National Institute of Engineering, Mysore
Siddaganga Institute of Technology,Tumkur
Poojya Doddappa Appa Ccollege 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 incubation centres at these colleges need to give first preference to students, research scholars and alumni and they supposed to solve the local problems and find solutions for the local needs. The funding assistance given is for the management of the program and the execution of the projects at Rs 40 lakhs per College per year. These networked incubation centres are going to be connected with proposed mobile application Centre, Centre of excellence for ESDM located in Bangalore for accessing secondary sources to avoid any duplication.

The major targets set in Karnataka ESDM policy includes:
Emerge as a leading contributor to India's ESDM sector by accounting for at least 10% of the US dollar 400 billion by 2020.
Generate over 20% of the country's total ESDM exports target of US dollar 80 billion in 2020.
Make Karnataka the country's preferred destination for investments in ESDM.
Generate at least 2.4 lakh jobs, 25 percent of India's Ph.D.'s and 5000 patents filings in ESDM sector in Karnataka by 2020.

Government of Karnataka has initiated a registration of K-ESDM companies. At the press-meet event, registration certificates were issued to companies who are into VLSI, semiconductor and electronics design and manufacturing.

The companies who received registration certificates include SIGNALCHIP Innovations Pvt Ltd, CERIUM Systems Pvt Ltd, BYDESIGN, Aura Semiconductor, SPARR Electronics, Sankhya Labs, Tejas Networks, Aristos Electronics Manufacturing Services Pvt Ltd.

This writer asked Srivatsa Krishna on any exclusive incentives for semiconductor fab in Karnataka, He said they are working on that and some announcement can be expected in near future.

To know more on Karnataka ESDM policy little more in detail read our previous article titled "Karnataka ESDM policy 2013 leverages national electronics initiative".

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