State Policy

Karnataka is keen to promote itself as the destination for domestic and foreign investment to catalyse industrial growth. The State Policy aims to achieve a consistent economic growth rate of 8-9 per cent over the next decade. Policy makers propose to create employment opportunities through industrial growth in the state and several sectors have been identified as thrust areas. The state offers incentives such as tax exemptions for investment in these sectors. These sectors are electronics, telecommunication, informatics, precision tooling and tool room industries, readymade garments including leather garments (excluding leather tanning), units manufacturing pollution control and effluent treatment plants, equipment and appliances and biotechnology.

The State Government plans to establish a corpus called the 'Technology Upgradation Fund' of US$ 10.5 million to encourage technology upgradation in industries.The incentives offered include:

• Interest subsidy to industries, which avail loans from State Financial Corporations for technology upgradation and modernisation

• Assist companies obtaining ISO certification by bearing 50 per cent of the cost

• Offer special range of concessions to all new industrial units irrespective of size in all four zones of the state

• Exemption on entry tax and stamp duty for new industries in thrust areas

Recognising the crucial role played by infrastructure in economic development, the State Government has made infrastructure development a priority.

It is committed to encouraging private investment in this sector. One of the major focus areas in infrastructure is power.The Government plans to establish a corpus called 'Infrastructure Development Fund' of US$ 21 million to primarily meet the infrastructure needs of industry and ensure uninterrupted and quality power. It will do so by establishing dedicated sub-stations in all industrial areas and by converting 1 1 KVA feeders with more than 50 per cent industrial loads into exclusive industrial feeders/express feeders.

The State Government has taken several initiatives to streamline procedures for investors in the state. These include:

• A single window nodal agency called 'Karnataka Udyog Mitra' for necessary clearances

• A state-level single window agency to consider investment proposals up to US$ 10.5 million

• A district-level single window agency to examine proposals up to US$ 0.63 million

Karnataka holds a pre-eminent position in the field of information technology. It was one of the first in the country to announce an IT Policy in 1997. Karnataka's IT Policy focuses on using e-governance as a tool and delivering a government that is more proactive and responsive to its citizens. In December 1999, the State Government created a special taskforce to prepare an action plan to harness the power of IT to address core issues concerning the state. The outcome was Mahithi -The Millennium IT Policy. Mahithi emphasises the importance of taking IT to the common man. The e-governance projects that are being implemented in the state are:

• Centre for e-Governance: This will facilitate the use of information technology for the common man and provide technical support to state departments

• Mukhya Vahini (Primary Vehicle): To develop a comprehensive database on Karnataka for developing a sophisticated decision support system for decision makers

• Bhoomi (Land): To aid farmers in establishing ownership of land, recording the succession of ownership, recording agricultural crop details and obtaining loans from banks

• Nondani (Registration): To make land registration simple and easy

• Khajane (Treasury): To computerise treasuries all over Karnataka

• Therige (Tax): To check evasion of taxes on certain commodities

• Reshme (Silk): To introduce online transactions in the silk market

• Agricultural price information: To ensure that prices of commodities are easily available to farmers all over the state

• Police IT 2000: To enhance police intelligence

• Saarige (Transport): To computerise all the transport offices in Bangalore

• Municipal corporations: Introduce a system to simplify payment of property tax, issuance of birth and death certificates and grievance redressal

Biotech Policy

The State Government is committed to maintaining Karnataka's pre-eminent position in the biotechnology sector and has a comprehensive Biotech Policy. To attract investment in this sector, the State Government has outlined incentives for the biotechnology industry which include:

• Exemption on payment of entry tax on machinery, equipment, capital goods and construction materials

• Up to 50 per cent exemption on payment of stamp duty and registration charges

• Concessions for biotechnology parks certified by the Department of IT and Biotechnology with a built up area of 50,000 sq ft

Karnataka is also committed to providing the right infrastructure and enhancing human resources for the development of biotechnology. The Government has established the Institute of Bioinformatics and Applied Biotechnology in the International Technology Park in Bangalore. It also plans to establish a biotech park at the University of Agricultural Sciences in Bangalore. This park will house research organisations and companies.

Some of the other institutions in the state that promote biotechnology are the Centre for Human Genetics, Institute of Agri-Biotechnology and Institute of Bio-Informatics and Applied Biotechnology. Karnataka has also set up a biotech development council and has a single-window agency to clear all biotech projects in order to encourage investment in the sector.

Karnataka was among the first states in the country to bring out a progressive Tourism Policy as early as June 1992.The Policy aims to promote tourism-related activities to enhance employment and income-generation among all sections of the society. In fact, the state has been proactive in encouraging private sector participation in this sector. Some of the objectives of the Tourism Policy are:

• Promote eco-tourism to increase awareness about the state's flora and fauna

• Promote tourism-related activities

• Develop travel circuits and offer tourists more diversity

• Create new tourism products that meet global  standards

• Tap the state's tourism potential

• Market Karnataka in national and international markets

• Promote adventure sports/entertainment activities and highway tourism

Content Source: www.ibef.org