Software

Industry welcomes Karnataka i4 IT policy

InformationWeek, October 24, 2013

The policy is aimed at making Karnataka the largest IT cluster on the planet by 2020 overtaking the Silicon Valley in the U.S.

The industry has welcomed the “Karnataka i4 policy: IT, ITeS, Innovation Incentives Policy” released by the Karnataka government on Tuesday at BangaloreITE.biz 2013. This policy has been framed keeping in mind several objectives. The first objective is to reposition Bangalore and Karnataka as the preferred global investment destination for IT/ITeS/BPO sectors. The second objective is to focus on newer areas of knowledge and innovation-based industries such as start-ups, ESDM, animation and graphics, and other web-based and mobile-based creative areas. The third objective is to leverage Karnataka’s leadership position in IT to create many transformational e-governance projects and the fourth is to strengthen Karnataka’s leadership position as the global IT capital.             

As part of the policy, IT/ITeS/BPO/Animation/KPO industries will be treated on par with public utilities to exempt them from disruptive effects of general strikes and bandhs. These sectors will also be entitled to stamp duty exemption of 75 percent in Mysore and Mangalore, in addition to other location as per the Industrial Policy. Start-up companies will be eligible for plug and play space with Internet at concessional rates of Rs 5-15 per square feet, depending on location. Another unique feature of the i4 policy is the Employment-Linked Incentivization of Land Allotment (E-LILA) outside urban Bangalore and rural district limits, which translates to land allotment for the concerned sectors at concessional price, linked to employment generation.                            

NASSCOM, the apex body of the Indian IT/BPO sector said they welcome the i4 IT policy and appreciate their efforts to position Bangalore and Karnataka as the preferred global investment destination for the sector. “Government’s renewed focus on providing a fillip to innovation-based industries focusing on areas like start-ups, ESDM, animation & graphics, and other web- and mobile-based creative areas will help Karnataka retain its leadership position in the technology landscape. Further, five year extension from the applicability of Karnataka Industrial Employment (Standing Orders) Rules and declaring this sector as essential services and will enable ease of doing business in the state. The focus on start-ups and tier 2 cities is particularly welcome as it supports the wave of entrepreneurship and innovation in the country.”          

Srikar Reddy, MD & CEO Sonata Software also echoed NASSCOM's voice. “The policy announced shows the vision and commitment of the Government of Karnataka in building on the leadership status of the state in the IT & ITES industry,” he said. “Bangalore is the 4th largest technology cluster in the world after Silicon  Valley, Boston and  London, making it imperative to nurture the needs of the industry with a global perspective, while yet moving ahead to build a wider base for sustained growth and social impact. The policy balances these needs well. Sonata as a company has a significant part of its investments and operations in Karnataka and will look to further enhance them in taking this policy and its intended benefits farther.”     

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