The Karnataka Government is promoting its smaller towns and has launched the Karnataka Electronics Hardware Policy to compete with Southern States such as Tamil Nadu, which has attracted companies like Nokia, Samsung and others to set up their manufacturing units in that State.
Three corridors
The Karnataka Government unveiled the policy while announcing that this year's three-day Bangalore IT.biz event will start on October 18.
The State has identified three corridors for setting up of electronics hardware manufacturing hubs and has allocated different areas of hardware for each corridor. For example, Bangalore-Tumkur corridor will concentrate on semiconductors, Hubli-Dharwar corridor will focus on automotive electronics, and Mysore-Nanjangud will cater to medical electronics.
The Government also released the Information and Communications Technology Policy 2011 and this document also concentrates on tier-II cities. In order to woo IT and BPO companies to tier-II cities, the Government plans to develop IT parks in places such as Mysore, Mangalore, Shimoga, Hubli-Dharwar, Belgaum and Gulbarga. The State is also looking at improved connectivity to these areas according to the document.
In order to give sops to the industry based on the backwardness of a district, the State has divided taluks in different districts as per various zones, with Zone-3 indicating a backward taluk, Zone-2 indicating a more backward taluk and Zone-1 indicating a most backward taluk.
For example, the district of Tumkur has 10 taluks, with Pavagada, Chikkanayakanahalli and Tiptur being classified as Zone-1, Zone-2 and Zone-3 areas, respectively.
Companies will be given various subsidies based on where they are investing; for example, exemption of stamp duty is 100 per cent for Zone-1 and Zone-2 areas and 75 per cent for Zone-3 areas. The same percentages also apply to waiver of conversion fee from agricultural use to industrial use.