Karnataka doles out bonanza to promote IT

The Karnataka government on Tuesday unveiled a new information technology (IT) policy, which offered concessional power rates, employment-linked incentives, as well as office space at concessional rates to start-ups.

The state, which accounts for about a third of India's total IT exports, would treat IT/ITeS (IT-enabled services) and knowledge industries as essential services; this means the operations of these industries wouldn't be impacted by disruptions such as general strikes and bandhs.

The policy says the state government would exempt the industry from the Karnataka Industrial Employment (Standing Orders) Rules, 1946, for five years. It also has clauses for the protection of women employees and prevention of sexual harassment at workplaces. It mandates classification of a workforce into permanent and temporary segments and provides a code on the rules pertaining to shifts, wages, termination, retirement and redressal.

“The Department of IT-BT will operate a single window system to identify, target and attract new investments and make Bangalore and Karnataka a preferred IT and innovation destination for the world,” Karnataka Chief Minister Siddaramaiah said at the inaugural ceremony of ITE.Biz 2013, the state’s flagship IT event.

To attract IT investments into tier-II and III cities, the new policy proposes to offer land at concessional rates; this would be linked to employment generation. This is applicable for investments outside Bangalore urban and rural districts.

The new policy says industrial power rates, not commercial power rates, would be applicable to all IT/ITeS and other knowledge-based companies in the state. Besides, the industry would be entitled to stamp duty exemption of 75 per cent in Mysore and Mangalore, in addition to other locations, according to the industrial policy.

In line with the India Brand Equity Fund set up by the Centre and the Confederation of Indian Industry (CII), the state has announced ‘Brand Bangalore 3.0’ and ‘Bangalore First’ funds would be set up. The latter would be set up in association with industry bodies such as Nasscom, CII and the Manufacturers’ Association for Information Technology.

“I feel the policy is generally good and in the right direction. It has good elements such as special incentives for start-ups, tier-II and tier-II cities and declaring IT as essential services,” said Kris Gopalakrishnan, vice-chairman of Infosys.