The Karnataka government approved a new IT policy on Thursday in a bid to boost the state's contribution towards the goal of a trillion dollar digital economy and create new jobs from in the next five years. Additionally, the state cabinet also cleared special incentives for the newly proposed Electronics System Design and Manufacturing or ESDM cluster.
New IT policy
Karnataka's new IT policy for 2020-2025 focuses on development outside Bengaluru by providing financial support for IT hubs of up to Rs 3 crores outside Zone 3. The state has reserved Rs 2 crore for the support of developing co-working, plug-and-play infrastructure outside zone 3. In a huge relief, the government has also exempted 75 percent stamp duty charges in Mysuru, Hubbali, Dharwad and Mangaluru and 100 percent for all other zones except zone 3.
The new IT policy also grants quality certification cost reimbursement of up to Rs 6 lakh, marketing cost reimbursement of up to Rs 5 lakh per entity and reimbursement of PF/ESI up to Rs 10 lakh per company - all outside Zone 3.
"The new IT Policy for 2020-25 has been positioned to ensure Karnataka retains its pole position in the sector. We aim to also strengthen the ecosystem and boost growth in Tier 2 & 3 cities of the state. We project that over 60+ Lakh new jobs will be created in this sector," Deputy Chief Minister of Karnataka, Dr Aswathnarayan, said announcing the new policies.
Special incentives for ESDM
The cabinet has approved capital investment subsidy of 25 percent on land complete reimbursement on costs like stamp duty and registration, land conversion rate. There's also Rs 1 per unit for five years from the month of commercial production, 100 percent exemption from duty on electricity.
"To facilitate the expansion of ESDM manufacturing in Karnataka, we will offer a 'Scheme of Special Incentives for ESDM Sector' complementing the Centre's NPE 2019 and SPECS, PLI & EMC 2.0 schemes. We aim to attract Rs. 5000 Crs worth of investments & create 43,000+ new jobs," deputy CM wrote.
