Karnataka GIM_Dataquest-IDC IT Sector Report_June2010

w
w
w
.dqindia.com
SPECIAL REPORT | June 2010
Follow Dataquest on www.twitter.com/dataquest_india
Hub of India’s IT revolution, gateway
to progess and opportunity
Karnataka

“The Government of Karnataka has a proactive
policy of facilitating investments in the state
and aiding the growth of Karnataka as the IT
capital of India.”
“Karnataka and IT progress have become synonyms.
With the proposed ITIR and IT Parks, investors will
be able to exploit new opportunities and growth will
gain further momentum.”
Sri B.S. Yeddyurappa
Hon’ble Chief Minister
Govt. of Karnataka
Sri Katta Subramanya Naidu
Hon’ble Minister for IT & BT,
Information, Housing & BWSSB
Govt. of Karnataka

Dear Investors,
Karnataka has come a long way in the last three decades.
High technology industries and research institutions have
flourished in the State but the role of Information Technology
has been most significant among all. IT has not only shaped
the Bangalore city skyline and work paradigm but also resulted
in a more cosmopolitan culture. Bangalore has been like a
magnet, attracting a highly skilled work force, both from other
parts of the country as well as from abroad. I sincerely hope
that the proposed Information Technology Investment Region
(ITIR) and IT parks across the State will further enhance the
credibility and leadership role of Karnataka in attracting and
retaining investment on a large scale.
The Government of Karnataka is committed to ensuring this
growth ia sustained and has planned a number of steps to
improve the existing infrastructure. Notable amongst these
are the setting up of power projects of the order of 15,000
MW and metro and monorail systems under ‘fast track’
mechanism. Events like the Karnataka Global Investor Meet
are further proof of the State’s vision to invite and provide
quick, single window clearance to future stakeholders in the
State’s progress.
Karnataka is “One State with Many Opportunities”. Come and
be a part of this revolution.
Ashok Kumar C. Manoli, IAS
Principal Secretary to Government,
Department of IT, BT and S&T
Foreword

4 | June 2010 For more on India’s IT industry, visit www.dqindia.com| DATAQUEST | A CyberMedia Publication
SPECIAL REPORT
www.dqindia.com
SPECIAL REPORT JUNE 2010
EDITOR-IN-CHIEF: Shyam Malhotra
CHIEF EDITOR: Prasanto Kumar Roy
GROUP EDITOR: Ibrahim Ahmad
Editor: Shyamanuja Das
Executive Editor: Atreyee Ganguly
Associate Editor: Rajneesh De,
Content editor: Shrikanth G (Chennai)
Assistant Editor: Priya Kekre (Mumbai), Monalisa Das,
Nilakshi Barooah
SR CORRESPONDENT: Stuti Das (Delhi), Piyali Guha
(Delhi), PC Suraj (Bengaluru), Shilpa Shanbhag (Mumbai),
Atreyee Datta (Delhi)
CORRESPONDENT: Mehak Chawla (Delhi)
SUB EDITOR: Priyannkaa Dey
DESIGN: Lakhvinder Singh, Rajesh Angira
VICE PRESIDENT (Audience Acquisition and
Marketing): Rachna Garga
GENERAL MANAGER (Marketing): Sameer Vinerkar
GENERAL MANAGER (Accounts & Commercial): C P Kalra
GENERAL MANAGER (Print Services): T Srirengan
MANAGER (Database & MIS): Ravikant Kumar
Asst Manager (Ad Coordination): Jayant Singhal
AUDIENCE SERVICing: Sarita Shridhar, Sucharita Saha,
Deepak Jindal
GENERAL MANAGER (Audience Development): Aparna
Shivpura
Audience Development: Ekta Sharma,
Pooja Bharadwaj, Nilotpal Dutta
SR MANAGER (Events & Circulation): Tarana Kaushik
Press releases to: cns@cybermedia.co.in
Print ServiceS: Dot Print, New Delhi
Design & LAYOUT: Kryzliz
PROJECT INPUTS: Thomas George, Vishaal Bhatnagar,
Anirban Banerjee, Suman Dutta, Roopender Dhania
(IDC India)
DATAQUEST (not affiliated with Dataquest Inc., a division of
Gartner Group, USA), is printed and published by Pradeep
Gupta, on behalf of Cyber Media (India) Ltd., and printed at
M/s Karan Printers, F 29/2, Phase II, Okhla Industrial Area,
New Delhi, published at D - 74, Panchsheel Enclave, New
Delhi 110017, India. Editor: Ibrahim Ahmad.
Introduction 5
Information Technology Industry 6
Global Overview 6
Indian Economy and the IT Market 6
Advantage India 9
Karnataka State 10
Evolution of IT Sector in Karnataka 10
Growth Drivers and Role Played by the State 10
Why Invest in Karnataka 11
Karnataka IT Sector Statistics 12
State IT Policy Initiatives 15
Impact of IT on Social Fabric 15
Brief Note on Investment Process 16
Semiconductor Policy 2010 16
Incentives for the Semiconductor Sector 17
Information Technology Investment Region (ITIR) 19
Salient Features of ITIR 19
Role of the State Government 19
Investment opportunities in IT/ITeS SEZs, IT Parks 19
Revolutionizing Tier II, III Cities and Rural Areas with
the help of IT and BPO 21
Government initiatives in Rural BPO 21
Major IT Initiatives of Karnataka State Government 22
e-Governance Initiatives 22
SWAN, SDC and CSC 24
Future Initiatives 25
Key Highlights 27
Contents

KARNATAKA – Hub of India’s IT revolution,
gateway to progress and opportunity 2010
The global economic outlook has
now started to appear more optimis-
tic and various leading organizations
have come up with interesting analy-
ses and possible outcomes for the
future. Apart from predicting growth
in developed economies (though still
with a cautious approach), their pre-
dictions have one factor in common,
and that is the immense opportuni-
ties that lie in the Asian continent.
India has emerged as one of the
fastest growing economies in the
world with GDP growth at 7.2% in
fiscal 2009-10 and has been ranked
as the 4th largest economy on PPP
(Purchasing Power Parity) basis.
The growth of the Indian economy is
mainly based on its domestic market
unlike other export-led nations and
the purchasing power of the popula-
tion is growing with the infusion of
global investment in key industrial
sectors, creation of new, knowledge-
based employment opportunities and
the resultant rising standards of liv-
ing. IT/ITeS has played a crucial role
in helping raise the overall standard
of living and the State of Karnataka
can rightfully claim a leading role in
ensuring the successful development
and spread of this growth-enabling
sector of the Indian economy.
The growth of the export-led seg-
ment of the Indian IT industry and
status of the US and European econ-
omies are closely interlinked (approx-
imately 60% of India’s software ex-
ports revenues come from US based
customers). During the slowdown
Indian IT and BPO services organiza-
tions helped developed economies to
significantly cut their operational cost
by working as a ‘Global Back Office’.
But there is more about the India IT
and BPO services sector than just
being an offshore destination provid-
ing cost arbitrage to Western MNCs.
The India IT sector has climbed
up the value chain by being on the
forefront of innovative software and
application development. Major
Fortune 500 companies have set
up their R&D bases on Indian soil.
Low labor cost, large availability of
skilled workforce, improvement in
infrastructure and knowledge of the
English language have placed India
in a unique position among all other
developing countries.
Karnataka state is widely recog-
nized as the ‘Silicon Valley of India’
and has one of the largest concen-
trations of IT organizations. Banga-
lore (now Bengaluru), the capital
of Karnataka is ranked as the 4th
largest technology hub in the world.
With nearly 2,100 IT companies,
the highest number of CMM Level 5
companies in India, Electronics City
at Bangalore and Mysore, IT Parks
at Mysore, Hubli and Mangalore
combined with the state’s investment
friendly IT policies make Karnataka
the preferred location for global
investors. The Information Technol-
ogy Investment Region (ITIR) and IT
Parks across the state are projected
to receive an investment of more
than US$ 20 Billion by 2030. Kar-
nataka has become a symbol of the
Indian IT growth story.
Introduction
India has emerged as
one of the fastest growing
economies in the world
with GDP growth at 7.2%
in fiscal 2009-10 and has
been ranked as the fourth
largest economy on PPP
(Purchasing Power Parity)
NOTE: For the purposes of this report 1 US$ = INR 45.

SPECIAL REPORT
Information Technology Industry
2007 2008 2009 2010 2011
Total IT spending
Sources: Economist Intelligence Unit IDC.
15
10
5
0
-5
-10
-15
IT services spending IT hardware spending Packaged software sales
Figure 1: Worldwide IT Spending Trends, 2007-2011
(% growth; US$)
Greece, the long term fallout will
continue to be felt in later years.
Global growth showed 2.2% decline
in the year 2009. According to World
Bank estimates the global economy
is projected to grow by 2.7% during
2010 and is expected to see an im-
provement in 2011 with an estimated
growth of 3.2%.
Due to the slowdown, total IT
spending across the globe took a
plunge in 2008-09 and saw negative
growth for close to six quarters. The
decline in spending was lower in the
case of packaged software, which
organizations used to improve their
processes and productivity. Globally
companies will continue to outsource
their non-critical operations to third
world countries as a means of cost
reduction.
Indian Economy and the IT
Market
The Indian economy by and large
has sustained economic slowdown
and Index of Industrial Production
(IIP) increase to 16.8% in December
2009. India’s GDP is estimated to
have registered a growth of 7.2%
in 2009-10; at nominal rates the
Indian economy was valued at ap-
proximately US$ 1.367 trillion. On
the basis of purchasing power parity
(PPP), the Indian economy is already
the 4th largest in the world after the
US, China and Japan. The per capita
income is also on the rise and as a
result the average Indian’s purchas-
ing power has increased manifold in
recent years. The current per capita
Industry thought leaders, economists
and analysts have acknowledged that
'Globalization' has become possible
only because of the advancement
in Information and Communica-
tions Technologies. It has not only
changed the way business is done
but also the way we communicate
and interact with the outside world.
Today on a global basis, the IT indus-
try is providing employment (directly
or indirectly) to millions of people
and nearly all major industries de-
pend upon software applications and
tools to function in an effective and
efficient manner.
Global Overview
The global economy is still in 'recov-
ery mode' after The Great Recession
and the recent economic develop-
ments in Turkey, Greece and Spain
have again sent shockwaves across
Europe and negatively impacted
major bourses across the world.
While the Eurozone countries have
put together a recovery package for
15
10
5
0
-5
-10
-15

Figure 2: Overall India IT Market - 2009 vs. 2014
Total – US$ 21,442 million Total – US$ 43,596 million
GDP of US$ 2,940.73 is projected to
increase to US$ 3,739.36 in 2012 as
per IMF estimates.
The IT services and ITeS (IT-ena-
bled Services) industry is largely de-
pendent on exports of software and
outsourcing services to developed
countries; this segment of the Indian
IT sector was impacted the most dur-
ing the global economic slowdown
and saw decrease in growth rates.
IT players focused on helping their
clients increase productivity, reduce
cost and retain existing customers.
The industry also focused on diver-
sifying its overseas client base to
reduce dependence on the US and
Western Europe. In India the ITeS
industry comprises mainly of services
like System Integration (SI), software
testing, application development,
network services, Business Process
Outsourcing (BPO) etc.
The total India domestic IT market
was estimated to be US$ 21442.44
million in 2009 and is projected
to touch US$ 43596.44 million by
2014. The prime objective of any IT/
application deployment in the next
2-3 years will be cost reduction and
improvement in bottom lines to bet-
ter prepare for any further financial
crisis.
As seen from Figure 2 above, in
the next 4 to 5 years organizations
will leverage their existing infra-
structure and concentrate more on
benefits of services by fully utilizing
them. Hence, technologies like Uni-
fied Communications (UC), desktop
and server virtualization would rule
in 2011 and 2012; cloud computing
will gain momentum by 2012-13.
According to the STPI (Soft-
ware Technology Parks of India),
software exports from India dur-
ing fiscal 2008-09 were valued at
US$ 46079.53 million and grew
by 15.09% as compared to fiscal
2007-08. The industry is expected to
clock similar growth regardless of the
slowdown. Growth is maintained by
nearly all segments of the IT indus-
try. For example, the data center
services market in the country (cur-
rently estimated at US$ 1.39 Billion)
is forecast to grow at a compound
annual growth rate (CAGR) of 22.7%
13%
n Services n Hardware
n Software n Others
18% 32%
37% 13%
38%
29%11%
n Services n Hardware
n Software n Others
2009 2014
Source: IDC India, 2010

SPECIAL REPORT
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
2006 2007 2008 2009 2010 2011 2012 2013 2014
0
5
10
15
20
25
between 2009 and 2011, to touch
US$ 2.2 Billion by the end of 2011.
Figures like growth of 33% in total
PC shipments (including desktops
and notebooks) adding up to 2.24
million units in the January-March
2010 quarter (Source: IDC India,
2010) and ever increasing popula-
tion of Internet users (estimated at
approximately 71 million by IAMAI),
improving telecommunications
infrastructure, increasing number of
system integrators, all point towards
the fact that the India domestic IT
sector has come of age and is just
not dependent on global markets.
Initiatives like setting up of Special
Economic Zones (SEZs) for the IT
sector across various regions, favora-
ble investment policies and programs
are expected to continue to fuel the
growth of the Information Technology
sector in India.
Figure 3: India Domestic IT Market Evolution - Growth Phase 1.0 to Growth Phase 2.0
INFRASTRUCTURE BUILD-UP
INFRASTRUCTURE CONSOLIDATION
INFRASTRUCTURE LEVERAGE
Two key Areas of Opportunity
Growth Phase 1
CAGR 24.0%
Nascent
Growth Phase 2
CAGR 14.6%
Source: IDC India, 2010
US$Million
Grwoth%

• India has a vast pool of highly skilled workforce
(nearly 3 million technical and management
graduates) and technology institutes led by the
Indian Institutes of Technology (IITs) and Indian
Institutes of Management (IIMs) consistently
churn out engineering and management gradu-
ates to feed the industry demand for qualified
professionals.
• A stable and democratically elected govern-
ment with a ministry specially dedicated to the
progress of Information Technology. The govern-
ment’s major policy thrust areas are improving
the climate for technology innovation and knowl-
edge base.
• Indians are known for their acceptance and
quick adoption of new technologies and the
country is one of the fastest growing market for
mobile phones and notebook PCs.
• India is a preferred destination for offshore IT and
back-office functions and approximately 260 of
the Fortune 500 companies are serviced from
India. In today’s competitive, globalized economy,
India has been successful in retaining its low-cost
advantage through additional ‘pluses’ such as the
quality of the skill base it offers, and the country’s
business environment. Infrastructure is improving
not only in the large metropolitan cities but also in
Tier II and Tier III cities. Bangalore, Mumbai, Delhi
National Capital Region, Hyderabad and Pune are
the main clusters for the Indian IT/ITeS industry.
• The Government of India has introduced special
investment and tax incentives for companies
setting up facilities for export of Software, IT
Services, Electronics, Telecommunications,
Power, Oil & Gas and those carrying out research
and development (R&D) activities in the biotech-
nology and pharmaceutical sectors. Setting up of
SEZs and schemes providing incentives to Export
Oriented Units (EOUs) are a part of this overall
policy thrust.
• India has a burgeoning middle class population
of approximately 350 million with a growing pur-
chasing power. This offers a unique opportunity
for investors to tap into the domestic market for
products and services manufactured/rendered
out of their India operations.
• India is home to a large number of R&D laborato-
ries set up by major Fortune 500 companies and
has a well defined Intellectual Property Rights
(IPR) legal regime.
Advantage India

SPECIAL REPORT
Karnataka State
Karnataka has emerged as the
knowledge and technology capital
of the country, and evolved from a
basically agricultural economy into
an industrial one in the last three
decades. It has a strong industrial
base comprising IT services and ITeS
(including software development, and
Knowledge and Business Process
Outsourcing), Textiles (largest Indian
producer of raw silk and silk fabrics),
defence research and aeronautics
units, biotechnology, nanotechnol-
ogy and semiconductor research and
design, automotive and infrastructure
with total estimated investment ex-
ceeding US$ 34787.77 million. Prior
to the growth of the IT industry, the
state already had presence of major
Government R&D and manufactur-
ing sector organizations. The Gross
State Domestic Product (GSDP) grew
by about 5.5% in real terms during
2008-09 with 5.8% growth recorded
by the industry and 9.2% in the serv-
ices sector (Source: OFIC). Today,
the state is home to more than 2100
IT companies, 743 MNCs, and over
600,000 IT professionals.
Evolution of Information Tech-
nology Industry in Karnataka
• In the early 1970s, American com-
panies were exploring cheaper ways
to develop software, mainly com-
prising technical programming. In
1968, the Tata industrial conglomer-
ate formed a software services unit
Tata Consultancy Services (TCS) to
explore the opportunity. Bangalore
was chosen because of low real es-
tate cost and a salubrious climate.
• Wipro started to manufacture In-
dia’s first homegrown PC. Economic
liberalization during the 1990s saw
good growth in the Telecom sector
that provided a staging ground for
the future IT revolution in the coun-
try.
• In 1995, TCS determined that its
CasePac tool developed for IBM
could be used to scan software for
Y2K problems. This boosted in-
dustry confidence and lead to Y2K
contracts piling up on the doorsteps
of Indian information technology
firms in 1999.
• In 2003, with the emergence of IT
services conglomerates such as
Wipro and Infosys, India became
a prime destination for offshore
outsourcing as foreign companies
sought to reduce their costs.
• Post 2003 Indian firms climbed
up the value chain by proving their
skills in software development and
R&D. MNCs started to increase
the size and complexity of their
workforce in the country and the In-
formation Technology sector started
witnessing a high growth phase.
• After the Electronics City in Banga-
lore, Government of Karnataka and
STPI set up new technology parks
at Mangalore, Hubli and Manipal,
bringing the IT revolution to other
regions of the state.
Growth Drivers and Role
Played by the State
Karnataka has pioneered many initia-
tives related to technology advancement
Post 2003 Indian
firms climbed up the
value chain by proving
their skills in software
development and R&D.
MNCs started to increase
the size and complexity
of their workforce in
the country and the
Information Technology
sector started witnessing
a high growth phase

and regulations regarding facilitation of
industries. A few notable initiatives are
listed here:
• In 1991, the state introduced the
Millennium IT Policy for promotion
of the IT industry and now in 2010
has become the first state in India
to bring out a separate Semicon-
ductor Policy to propel growth of
the sector.
• To promote technical education, the
Indian Institute of Information Tech-
nology (IIIT) was set up in Banga-
lore in xxxx. This is apart from 103
R&D centers, 19 universities, 153
engineering colleges, 33 medical
colleges, 39 dental colleges, and
1,003 Industrial Training Institutes
(ITIs) that provide a constant sup-
ply of skilled and quality human
resources.
• In 1992, Bangalore was the first city
in India to set up a satellite earth
station to provide high speed data
communication services to facilitate
software exports. Setting up of
Electronics City and STPI Bangalore
were other major landmarks in the
growth of the IT sector in the state.
• Many international companies have
set up their first R&D units outside
their home country in Bangalore.
Major R&D centers are run by
Texas Instruments, Motorola, SAP,
Microsoft, Intel, Philips, Cisco, Ora-
cle, AMD, IBM, Google and Yahoo
among numerous others.
• In August 2000, Technology In-
cubation Center, a first of its kind
initiative was set up in Bangalore
to promote the growth of the IT
sector with the help of STPI. This
centre currently supports budding
entrepreneurs realize their dreams
by supporting them financially as
well by providing office space and
hardware testing facilities. The
model has been replicated at other
STPI centers.
• The proposed Information Technol-
ogy Investment Region (ITIR) near
Bangalore airport is being devel-
oped to bring in investment into the
IT/ITeS sector pegged at an ambi-
tious US$ 20 Billion. This proposed
mega IT township will provide all
essential amenities and state of the
art facilities at one place to create
a self-contained business friendly
ecosystem that rivals the best in the
world.
• The state is a frontrunner in e-
Governance initiatives and common
citizens are already benefitting
from schemes like Bhoomi (land
ownership records computerization)
and Khajane (computerization of
Municipal Corporation and State
Government Treasury offices).
Why Invest in Karnataka
• The STPI scheme is now spread
over 51 centers across the country
and every state government coordi-
nates with the STPI for the estab-
lishment of a suitable ecosystem to
support the development of the IT
services and ITeS industry. In the
case of Karnataka this coordina-
tion is done at the highest levels
of government and the results
are there for all to see. Improved
government and industry coordina-
tion has resulted in Karnataka being
the highest software exporting state
of India continuously for the past
many years. The state government
has been a leader in the effort
In 1992, Bangalore
was the first city
in India to set up a
satellite earth station
to provide high speed
data communication
services to facilitate
software exports.

SPECIAL REPORT
to foster the development of an
investor-friendly ecosystem, unique
in the country.
• Many R&D centers (electronics,
manufacturing and other major
industries) existed in the state prior
to the onset of the IT revolution,
providing Karnataka a strong tech-
nical base and head start over other
states/regions. It also provided the
state the first-mover advantage that
resulted in a natural progression
from electronics to IT and then to
high end technology R&D in later
years.
• The state has reputed educational
colleges and research centers like
the Indian Institute of Science
(IISc), Indian Institute of Manage-
ment (IIM), Indian Institute of Infor-
mation Technology (IIIT), Hindustan
Aeronautics Limited (HAL) and the
Defence Research and Develop-
ment Organization (DRDO) among
others. Karnataka acts as a magnet
that attracts highly qualified profes-
sionals not only form other states
but also a good number of expatri-
ate workers and managers. This
makes Bangalore a truly cosmopoli-
tan city to live and work in.
• Karnataka has a salubrious climate
and most MNCs prefer the state as
a destination over other states. After
pioneering MNCs like Texas Instru-
ments, Motorola, and Honeywell
started their operations in the state,
it soon became a regular feature
to see a new MNC start operations
every month on Karnataka soil.
• There are approximately 140 semi-
conductor companies across India,
mainly in Bangalore, Hyderabad
and Pune. Nearly 70 to 80 % of
them have a base in Bangalore.
• The state government has worked
closely with STPI to improve
infrastructure in terms of network
connectivity, data centers, multiple
fiber gateways and an incubation
facility for budding entrepreneurs
(Technology Incubation Center).
The collaboration has gone beyond
Bangalore and facilities at Mysore,
Mangalore, Hubli and Manipal are
now enabling other regions of the
state to flourish and be a part of the
progress in the Information Tech-
nology sector apart from creating
employment opportunities in these
regions.
• Karnataka was the first state in the
country to come up with the idea of
rural BPOs. The scheme will have a
long term impact in terms of build-
ing a knowledge work culture in the
state and various incentives have
been rolled out such as provision
for training of the local people and
preference to women entrepre-
neurs.
• The state government plans to
set up Information Technology
Investment Region (ITIR), which
will include housing, educational
institutes, healthcare facilities all in
close proximity.
• Bangalore has the highest concen-
tration of IT companies in the world
after Silicon Valley and 2,084 IT
services/ITeS companies operate
from the state.
Karnataka IT Sector Statistics
Karnataka is the frontrunner in soft-
ware exports since the early days of
the IT industry in India. Other states
like Andhra Pradesh, Tamil Nadu,

Maharashtra, Delhi National Capital
region are also fast emerging on
the scene and showing good growth
rates.
Karnataka contribution to software
exports from India was approximately
34% of US$ 46079.53 million total
India exports during year 2008-09.
According to estimates, exports from
Karnataka for the year 2009-10 are
approximately US$ 18,000 million.
Karnataka will be able to maintain an
estimated healthy growth of 15z%
(STPI statistics).
As companies look beyond out-
sourcing opportunities and graduate
to software application development,
business analytics, Knowledge Proc-
ess Outsourcing (KPO) and other
growth areas, exports from these seg-
ments are expected to increase in the
coming years. Notable IT and ITeS/
BPO companies in the state include
Infosys, Wipro, Tata Consultancy
Services, IBM, Microsoft, TechMahi-
ndra, Accenture, Hewlett-Packard,
Figure 4: Software Exports from various States (US$ Million)
Source: STPI
Source: STPI
Cognizant Technology Solutions, HCL
Technologies, Genpact, SAP Labs
India, Google, Yahoo etc.
As companies are looking beyond
the outsourcing opportunities and
looking for software application
development, business analytics,
Knowledge Process Outsourcing
(KPO) and other growth areas, the
exports from these segments are
expected to increase in the coming
0 5,000 10,000 15,000 20,000
Andhra Pradesh
Delhi
Haryana
Karnataka
Maharashtra
Tamilnadu
Uttar Pradesh
n 2006-07 n 2007-08 n 2008-09
n 2009-10 E
Figure 5: Segment wise Software Exports
from Karnataka State FY2008-09
Total – US$ 15,639 million
28%
49%
3%
20%
n ITeS/BPO
n Others
n Technology Software
n Enterprise Applications

SPECIAL REPORT
Figure 6: Hardware Exports from Karnataka State (US$ million)
Source: Government of Karnataka and STPI
years. Notable IT, ITeS/BPO compa-
nies are Infosys, Wipro, Tata Con-
sultancy Services, IBM, Microsoft,
TechMahindra, Accenture, Hewlett-
Packard, Cognizant Technology Solu-
tions, HCL Technologies, Genpact,
SAP Labs India, Google, Yahoo etc.
The numbers of Electronic Hardware
units in the state currently have risen to
76 from 27 units in 2001-02. The ex-
ports from these units is also on the rise
but expected to see a slight decline in
growth in 2009-10 due to decrease in
global demand on account of the eco-
nomic slowdown. The state government
is planning to set up Electronic Hardware
Manufacturing Hubs (EHMHs) and units
set up under this scheme would be eli-
gible for benefits as per Karnataka State
Industrial Policy 2009-14.
Bangalore is the hub of IT and BPO/
ITeS companies in Karnataka with ap-
proximately 90% of all companies having
a base in the capital city. The state has
witnessed a phenomenal increase in the
presence of IT companies from 782 in
the year 1999-2000 to a total of 2,084
units currently. BPO/ITeS companies
have also risen from mere 28 in year
2001-02 to currently 270.
0
100
200
300
400
500
600
700
800
900
1000
78
178
305
369
405
551 562
775
825
949 E
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
n 2001-02 n 2002-03 n 2003-04 n 2004-05 n 2005-06 n 2006-07 n 2007-08 n 2008-09
Source: STPI
Figure 7: Growth of IT and
BPO/ITeS Companies in Karnataka
0
500
1000
1500
2000
25002500
2000
1500
1000
500
0
1038
28
IT Companies
BPO/ITeS
Companies
69
113
138
185
225
248
270
1154
1322
1520
1721
1883
1999
2084

Karnataka IT Policy 1997 was the
first of its kind in the country and
was launched to provide the required
impetus to the budding Informa-
tion Technology sector. At that time,
the meaning of the term IT was still
blurred in the minds of most peo-
ple. The state government saw an
opportunity in the newly globalized
Indian economy and because of the
presence of existing R&D and manu-
facturing units witnessed the estab-
lishment of MNCs on Karnataka soil.
Later Electronics City and STPI Ban-
galore paved the way for steady IT/
ITeS sector growth in the state. STPI
worked in close co-operation with
the Government of Karnataka and
developed the requisite infrastructure
like data centers, bandwidth and net-
working facilities. Since then, Karna-
taka’s share of total software exports
from India has been consistently
in the range of 35 to 40%. Various
incentives offered under the State
IT Policy include exemption of entry
tax on capital goods and power tariff
concessions; all other State Industrial
Policy incentives are also applicable
to IT and BPO/ITeS firms.
The State IT Policy was envisaged
with a broader vision - that all state
government departments should
come under the umbrella of IT and
start IT initiatives to ease the daily life
of the citizens. With this in mind the
state education department provided
computers to schools, the state
revenue department came up with
schemes such as Bhoomi, Khajane,
Banglaoreone, PoliceIT and others.
State IT Policy Initiatives
Impact of IT on Social Fabric
Policies are instruments of the state
to spread growth and ensure the
reach of economic benefits to the
common people with the help of IT
as a tool. As mentioned in the state’s
Millennium IT Policy, the main thrust
was on women empowerment and
poverty eradication. The hypothesis
was that if IT brings new opportuni-
ties to the people of Karnataka, the
standard of living of the state’s popu-
lation would automatically improve.
Also, it would bring huge investments
from MNCs that the state could use
to improve infrastructure facilities. If
we see the status of this hypothesis,
Bangalore has become one of the top
IT hub of not only India but of the
world and is referred to as the ‘Sili-
con City of India’ or the ‘IT capital of
India’. With the influx of talent from
all over India, the city’s landscape
has evolved into a truly cosmopoli-
tan hub of economic, commercial,
academic and cultural activities. In
Karnataka, the IT industry provides
direct employment to nearly 600,000
people, raising their living of stand-
ard and hundreds of thousands more
are dependent indirectly on the sec-
tor. IT penetration is increasing into
various facets of common life of the
state’s citizens and has now become
the norm of the day. For fulfilling fu-
ture demand and encouraging broad
based development and employment
opportunities, the state government
has provided computers to most
village schools (both primary and
secondary), preparing the base for
The Karnataka
Government is drawing
up a new ICT Policy,
combining telecom
with IT to give a fillip
to infrastructure
development across the
state.

SPECIAL REPORT
future generations of IT professionals
to fill the gap in demand and supply
of quality human resources for the IT
industry.
Brief Note on Investment
Process
• Karnataka Udhyog Mitra (KUM)
is the single point contact for all
project clearances and acts as a
nodal agency. The investor has
to provide details like the total in-
vestment proposed, total planned
employment generation, means
of finance, electricity and water
requirements, pollution issues etc.
• Once these details are ready, the
investor has to obtain necessary
clearance from the concerned
departments.
• If the land required is below 50
acres, then the state government
has a single window clearance
committee, which meets almost
once every month. If the land
requirement is more than 50
acres, the investor has to go to a
high level clearance committee;
the meetings for this high level
committee are normally held once
every three months.
• Copies of the investor’s applica-
tion are sent to different state gov-
ernment departments and all con-
cerned departments are invited to
these meetings. On the meeting
day, respective department rep-
resentatives attend the meeting
and present their opinion of the
project. Approval is granted on
the spot if all the requirements are
met. In case any issue is raised,
the state government informs the
investor to take appropriate steps
to clear the formalities.
• All these activities are normally
completed in 15 to 30 days;
depending on the project scale,
investment, employment genera-
tion capacity of the project the
time taken could vary.
Semiconductor Policy 2010
India in recent years has witnessed
growth in the semiconductor sector.
The industry includes VLSI Design,
Embedded Software and Design
of Hardware Boards. Embedded
Software contributes approximately
81% of the semiconductor market
revenues. While the global market
size is estimated at US$ 194.8 Bil-
lion, according to industry estimates,
annual revenues of the Indian semi-
conductor and embedded design
services industry are estimated at
US$ 6.56 Billion in 2009. The India
market size is projected to touch US$
7.50 Billion in year 2010. Currently
over 200 companies are operating
in this specialized area including
major players like Texas Instruments,
Intel, AMD, National Semiconduc-
tor, Philips, Freescale Semiconduc-
tor etc. Nearly 80 of these firms are
based out of Bangalore.
Industries like Telecommunica-
tions, Consumer Electronics, IT and
office automation are providing the
growth impetus and require raw/
finished semiconductor material for
proper functionality of end products.
The domestic growth drivers for the
semiconductor sector are mobile
handsets, desktop PCs and notebook
PCs, GSM base stations, TV set top
boxes and energy meters.
Bangalore is the home to approxi-
Out of 200 semiconductor
companies in India, nearly
80 of these are based out
of Bangalore, Karnataka.
Bangalore is the home to
approximately 70% of the
country’s chip designers
and contributes
approximately 80% of
the sector’s revenues in
design.

mately 70% of the country’s chip
designers and contributes approxi-
mately 80% of the sector’s revenues
in design. To further promote invest-
ment in the areas of semiconductor
design, high tech manufacturing and
to focus on increased use of solar
energy, the state government has
come up with its own Semiconductor
Policy 2010.
Industries like Telecommunica-
tions, Consumer Electronics, IT and
office automation are providing the
growth impetus and require raw/
finished semiconductor material for
proper functionality of end products.
The domestic growth drivers for the
semiconductor sector are mobile
handsets, desktop PCs and notebook
PCs, GSM base stations, TV set top
boxes and energy meters.
Bangalore is the home to approxi-
mately 70% of the country’s chip
designers and contributes approxi-
mately 80% of the sector’s revenues
in design. To further promote invest-
ment in the areas of semiconductor
design, high tech manufacturing and
to focus on increased use of solar
energy, the state government has
come up with its own Semiconductor
Policy 2010.
Figure 8: Revenue Share for VLSI, Board Design and Embedded Software
Incentives for the Semicon-
ductor Sector
• The Karnataka Information
Technology Venture Capital Fund
(KITVEN Fund) was set up to
provide financial assistance to IT
companies. To benefit semicon-
ductor startup companies, the
state government would provide
additional amount of US$ 5.55
million, towards 26% contribu-
tion to the KITVEN IT Fund to
help raise further funds from
the market to assist start up
semi-conductor units engaged in
design and embedded software.
Many fresh graduates from the
state’s engineering colleges opt
for VLSI and embedded design
specializations to take up a career
in the field and some have shown
interest in venturing into entre-
preneurship. KITVEN is one such
initiative to help entrepreneurs
partially meet their capital invest-
ment needs.
• The Orchid Tech Space Inte-
grated Incubation Center at STPI
Bangalore, with the support of the
state government is designed to
create opportunities for entrepre-
neurs. With this up to 10 startups
Source: Industry
13%
6%
81%
n Embedded Software
n VLSI Design
n Board Design

SPECIAL REPORT
can use the facilities like high-end
desktop PCs, servers, data center
and an international gateway with-
out worrying about the capital ex-
penditure. The government is now
planning to augment this facility
to add a characterization lab with
all the latest equipment needed
for hi-end design work. The main
feature of this facility is its unique
Public Private Partnership (PPP)
business model between govern-
ment and industry. Currently
approximately 8 to 10 startups are
working out of the Orchid Tech
Lab.
• Assembly, testing, marking and
packing process (ATMP) and
setting up a chip manufacturing
unit demands high investment
normally in the range of US$ 100
to US$ 500 million. To encourage
setting up of ATMPs, the state
government announced incentives
by lowering the threshold invest-
ment for ATMPs. For ecosystem
units with investment above US$
8.88 million and up to US$ 22.22
million the incentives would be
based on employment generation
potential and on a case-to-case
basis.
• To facilitate development of the
semiconductor ecosystem and to
encourage innovation and R&D in
Chip Design and Product Develop-
ment, the state government plans
to set up the ‘Karnataka Fund for
Semi Conductor Excellence’ of
US$ 2.22 million. This will cover
up to 50% R&D expenses of pri-
vate companies, subject to a limit
of US$ 22,222 per unit.
• To meet the domain specific
human resource needs of the sec-
tor, the state government would
establish a specialized school
under IIIT at a cost of US$ 2.22
million and strengthen the existing
Research Labs in the institute at
a cost of US$ 1.11 million, with a
25% contribution from the indus-
try.
• Various fiscal incentives will be
offered to MSME, Large and Mega
projects ranging from Investment
Promotion Subsidy, Exemption
from Stamp Duty & Entry Tax,
concession in Registration Charg-
es, Special Incentives for Export
Oriented Enterprises, interest free
loan on VAT and special incen-
tives for setting up units in low
Human Development Index (HDI)
districts. For more information,
investors are encouraged to refer
to the State Semiconductor Policy
2010 and Karnataka Industrial
Policy 2009-2014.

To cater to the growing demand from
industry and to provide all basic
necessities in one place, the Govern-
ment of India in partnership with the
Government of Karnataka has come
up with the idea of Information Tech-
nology Investment Region (ITIR).
These region will be demarcated
areas with excellent infrastructure
(including work space, educational
institutes, health facilities etc) and
will provide an investor friendly
ecosystem.
Salient features of ITIR
• The region would come up near
Bangalore International Airport
(BIAL) with employment potential
of approximately 255,000 directly
and over 857,000 indirectly. The
targeted investment is pegged at
US$ 20 Billion by 2030.
• The region’s main focus will be
on IT services BPO/ITeS and EHM
(Electronics Hardware Manu-
facturing) units. ITIR will have a
minimum area of approximately
40 square kilometers. This may
include Industrial Parks, Free
Trade and Warehousing Zones,
SEZs and Export Oriented Units
(EOUs).
• Internal infrastructure for this will
be built and managed by a devel-
oper or a group of co-developers.
Role of the State Government
• The State Government will play
Information Technology
Investment Region (ITIR)
a lead role in setting up this ITIR
and identify a suitable site (prefer-
ably non-agricultural land). The
Government will also conduct a
techno-economic pre-feasibility
survey for the project. The project
will be developed in two phases
and a separate urban local body
may be constituted to govern the
area if found necessary at a later
stage.
• The state government will ensure
adequate power, water supply,
sewerage and effluent treatment,
besides maintaining state roads,
environmental issues pertaining to
the region and the social infra-
structure. The state government
may also notify additional incen-
tives or benefits.
Investment opportunities in
IT/ ITeS SEZs, IT Parks
Karnataka has in principle ap-
proved 38 SEZs and currently 47 IT
Source: STPI
Figure 9: Growth of Software Exports
from Karnataka IT/ITeS SEZ units (US$ million)
0
200
400
600
800
1000
12001200
1000
800
600
400
200
0
289
1012
2007-08 2008-2009

SPECIAL REPORT
units are housed in 14 operational
IT/ITeS SEZs. The area allotted to
these is approximately 1.292 million
sq. mtrs. with a total built up space
of more than 1.884 million sq. mtrs.
The operational IT/ITeS SEZs provide
direct employment to over 34,000
and indirect employment to nearly
14,000 people.
Software exports from Karnataka
SEZ units saw an unprecedented
growth of nearly 250% during year
2008-09. Available estimated figures
up to December 2009 are approxi-
mately US$ 777.77 million. One of the
main developer companies located in
the SEZs is Wipro Limited with three
operational units in Dodda Kannena
Halli SEZ and two units in Electronics
City Bangalore SEZ. Infosys Limited
and ITPL also have one operational
unit each in their Mangalore and Ban-
galore SEZs, respectively.
The STPI have also set up IT Parks
in Mysore, Mangalore, Hubli and Ma-
nipal similar to the one in Bangalore,
equipped with all modern amenities
and IT infrastructure. These IT parks
witnessed positive trends and saw
increased participation from industry
majors like Infosys and Wipro among
others. For example Mysore SEZ soft-
ware export revenues were estimated
at US$ 168.88 million in 2008-09
and it is emerging as an alternative
destination for the Services and Tour-
ism sectors. 49 firms are registered
with the STPI in Mysore. Mangalore
saw software export revenues of US$
151.33 million in 2008-09 and is fast
emerging as a hub for logistics, manu-
facturing and services, with 24 firms
currently registered with Mangalore
STPI. It also has the added advantage
of an international airport and seaport.
Hubli is also becoming the choice of IT
and ITeS firms with 13 firms regis-
tered with the STPI unit in the city and
revenues estimated at US$ 0.2 million
for 2008-09.

India has proved itself as a global BPO/
ITeS hub and has been ranked highest
in terms of both Human Resource
availability and Quality. Bangalore has
been a hub of the BPO sector from the
very initial stage during early 2000s.
Due to the global slowdown the sector
saw single digit growth for the first time
in 2008-09. According to NASSCOM
(National Association of Software
and Services Companies) figures, the
Indian BPO sector is estimated to have
touched US$ 12.4 Billion in 2009-10,
a growth of 6% over the previous fis-
cal. With increasing competition from
other developing countries, Indian
firms have now focused on process
automation, opting FOR industry best
practices and by offering domain spe-
cialization services in addition to their
low cost advantage.
Government Initiatives in
Rural BPO
The Government of Karnataka now
has plans to bring IT revolution to Tier
II and Tier III cities like Hubli, Mysore,
Manipal and Shimoga to benefit local
communities. The state government
has also come up with the novel idea
of starting BPO revolution in rural
regions. The strategy has a long term
view of planning for infrastructure and
skill development in these areas and
to increase employment by roping in
local entrepreneurs. As a backdrop to
this initiative the state government set
up computer training centers in 224
RevolutionizingTierII,TierIIICitiesand
RuralAreaswiththehelpofITandBPO
locations across the state during 1999-
2000 and provided computer training
to nearly 100,000 youths at subsidized
training and infrastructure cost. With
this basic training, these youth can
hone their skills in a particular opera-
tion and will be ready to join main-
stream activities with little investment.
• For this the state government will
provide US$ 88,889 to entrepre-
neurs (preference to women).
At first, US$ 44,444 per unit will
be given for setting up the infra-
structure like computer, internet,
furniture requirements, telephones
etc; then for training a workforce
of nearly 100 employees a sum of
US$ 22,222 will be given. Another
US$ 22,222 divided into equal US$
11,111 per annum will cover rental
and other operational costs based
on their real costs.
• For benefitting from this scheme,
entrepreneurs have to run the
unit for a minimum of 2 years in
any rural area with population less
than 100,000, with 100 employees
trained and employed. The scheme
has already 16 units running.
• The state government has cleared
another 26 proposals from 134
applications for rural BPOs. Most
of their work involves PDF conver-
sion, raising donations, form filling
etc. It is a pure business model
where they can bring business from
any customer except government
departments.
The Government
of Karnataka now
has plans to bring IT
revolution to Tier II and
Tier III cities like Hubli,
Mysore, Manipal and
Shimoga to benefit
local communities. The
strategy has a long term
view of planning for
infrastructure and skill
development in these
areas and to increase
employment by roping
in local entrepreneurs.

SPECIAL REPORT
Major IT Initiatives of
Karnataka State Government
Information Technology has
changed the scene in villages and
rural areas in the state. Projects like
Bhoomi, BangaloreOne, Khajane,
Saarige and many more have simpli-
fied the process of application for
various government services in a
transparent and effective manner.
The total expenditure on e-Govern-
ance projects for the year 2009-10
was around US$ 88.88 million. This
is expected to touch US$ 133.33
million for the year 2010-11.
e-Governance Initiatives
As a part of the vision from the state’s
Millennium IT Policy, the Government
of Karnataka is committed to improve
the standard of living of all people
and increase women’s participation in
decision making processes, espe-
cially those related to their income
and overall economic, physical and
social emancipation. For achiev-
ing this, the e-Governance and IT
and BT departments of the state are
involved in several rural development
projects. Karnataka won the annual
National Award for e-Governance in
January 2010 that is presented by the
Department of Administrative Reforms
& Public Grievances of the Govern-
ment of India. ‘Anytime, anywhere’
is now becoming old and the state
government is now planning ‘anytime,
anywhere, any device’ services. The
major projects run by the state gov-
ernment are:

• Bhoomi (land records compu-
terization): The project aims to
establish clear ownership of land
titles, recording succession of
ownership, recording agricultural
crop details and helping farmers
obtain loans from banks in a fast-
er and transparent manner. The
complexity of the project can be
judged just by noticing that it now
covers all 6.7 million rural land
holders with more than 20 million
records of rights, tenancy and
certification (RTC); the system is
operational in all 177 talukas in
Karnataka.
• BangaloreOne (urban citizen serv-
ices): This is an online govern-
ment service interface covering
services like payment of utility
bills like electricity, telephone
and water, payment of stamp and
registration duty, application for
passports, train and flight book-
ings in coordination with con-
cerned departments and authori-
ties. The BangaloreOne system
received 10.6 lakh logs in a
February 2010 resulting in trans-
actions worth US$ 577.77 million.
BangaloreOne has 60 centers and
the state government plans to in-
crease these to 100 (the number
for the same type of service for
any other state capital is approx
34). BangaloreOne covers 43
transactional facilities covering
both G2C and G2B processes and
covers 748 sq. km. of land area.
The state has the highest number
of footprints from citizens for
availing services under initiatives
similar to BangaloreOne. Shimo-
gaOne, MysoreOne, TumkurOne
and GulbargaOne have already
been operationalised bringing the
total number of cities under this
initiative to nine.
• The Government of Karnataka has
implemented Human Resource

SPECIAL REPORT
Management System (HRMS) and
approximately 620,000 govern-
ment employees use the same.
The project was launched in
January 2007 with a total invest-
ment of US$ 0.97 million. In
future, the state is also planning
to extend this service platform to
Municipal Boards and Municipal
Corporations.
• The Government of Karnataka
e-Government System (EPROC)
platform has received wide appre-
ciation and the state is providing
services to Government of India
PSUs, for example, HAL uses the
EPROC to meet their e-procure-
ment needs. The World Bank
has also shown interest in this
platform for its operations in the
country. The project was started
with a total investment of US$
2.10 million and 40 state govern-
ment departments currently use
this service.
• Others notable e-Governance
initiatives of the state government
are - Mukhya Vahini -To develop
a database on Karnataka for
developing a sophisticated deci-
sion support system for decision
makers. Khajane (Treasury) - To
computerize treasuries all over
Karnataka state, using which the
government can check the avail-
ability of funds at any moment
in real time and act accordingly.
With the help of ‘Agricultural Price
Information’ system the prices
of commodities are easily avail-
able to farmers all over the state.
Computerization of Municipal
Corporations to simplify payment
of property tax, issuance of birth
and death certificates and griev-
ance redressal is already under
place. Saarige concentrated on
computerization of all the trans-
port offices in Bangalore. Other
notable projects include Reshme
- to introduce online transactions
in the silk market, and Police IT to
enhance Police Intelligence.
SWAN, SDC and CSC
To connect all offices and villages
through voice and video network, the
Government of Karnataka is building
a State Wide Area Network (SWAN),
State Data Center (SDC) and Com-
mon Service Centers (CSCs) across
the state.
SWAN was initiated in December
2009 with a total estimated cost of
US$ 9.60 million. The state SWAN
is first in the country to be on Multi
Protocol Label Switching (MPLS),
virtually bringing down the network
downtime to zero. Till April 2010,
it had reportedly connected 3,000
offices (compared to any other SWAN
in the country, which normally covers
up to 300 offices); the SWAN is soon
expected to cover all regions in the
state. 176 Government Business
Centers have also been started to
assist in the IT needs of offices at
taluka headquarter level. The SDC
will act as central data repository,
which can be accessed not only
through the Internet but also through
IP phones. Latest technological ad-
vancements like servers, storage and
networking devices are being set up
with Central Government assistance
of US$ 12.22 million. The total budg-
et for the project is US$ 2.20 million.
In case of CSCs, 79% of the Gram
Panchayats are connected through
wired broadband connections.
The state SWAN is first
in the country to be on
Multi Protocol Label
Switching (MPLS),
virtually bringing down
the network downtime
to zero

Karnataka State Government has
various plans for overall development
of the IT and BPO/ITeS sector and to
deal with the problems which could
restrict the growth of the industry.
The state is not only looking at the IT
sector but plans for the semiconduc-
tor sector and the animation sector
are also on the anvil.
• The Government of Karnataka
after implementing the Millen-
nium IT Policy is now mulling
over the possibility of adding the
Telecom sector into future policy
initiatives. Hence, the future
policy may be named Information
and Communications Technology
(ICT) Policy. In this direction the
state government has already held
two or three rounds of discus-
sions with industry representa-
tives and policy experts. This may
include issues related to labour
department like women working
late nights (currently allowed in
BPOs but not in IT companies).
Karnataka may be one of the first
states in the country, which has
combined IT and Telecom sector
together into a single policy initia-
tive.
• For the animation sector, the
Government of Karnataka plans to
formulate the ‘Animation, Gam-
ing and Special Effects Policy’.
The animation sector has seen
a steady growth in recent years
with MNCs like DreamWorks and
Technicolor having set up their
facilities in Bangalore. However,
availability of quality human
Future Initiatives
resources is still a concern area
that needs to be addressed. Other
problems with the sector are that
parents and the young generation
still do not consider animation as
a full time career. For increasing
awareness the ‘Karnataka Anima-
tion, Visual Effects and Gaming
Summit’ was organized during
March 2010 by the Karnataka An-
imation Industry Association and
was partly organized and funded
by the state government. Rural ar-
eas like Channapatna (famous for
its hand painted wooden dolls),
Srirangapatna and other regions
between Mysore and Bangalore
have an excellent base of human
resource in painting, sketching
and wall painting because of their
inherited artistic skills. To nurture
them and make them aware of
the opportunities in the animation
sector, the state government plans

SPECIAL REPORT
to set up a ‘Finishing School’.
Plans for an Animation City or
Animation Park on the lines of IT
Parks are also on the anvil, which
could provide a common resource
pool for all companies to minimize
the huge cost involved in software
and rendering activities.
• Karnataka has identified the
future prospects of nano technol-
ogy. In India, nano technology
is already being used in textiles,
chemicals and cosmetics. Reli-
ance Industries is the biggest user
of nanotechnology in India. While
the state has wherewithal in terms
of technological R&D, it has not
been able to convert the same
into a successful commercial
model. Government of Karna-
taka organized ‘Bangalore Nano’
event in 2007, 2008 and the next
edition is planned for December
2010 to increase the awareness
about the applications of nano
technology. The state has also
formed a Vision Group comprising
of industry and academic experts.
In addition, 14 acres of land near
the Banaglore-Tumkur highway
have been sanctioned for setting
up the Indian Institute of Nano
Science and Technology and the
project is already in implementa-
tion phase.
• To increase business with non-
English speaking countries, the
Government of Karnataka has
signed Memorandum of Under-
standing (MOUs) for collaboration
with state and city nodal agen-
cies such as Bavaria (Germany);
San Francisco and now Georgia
(both USA) have shown interest in
transfer of technology. Last year
Mexico was the BangaloreIT event
partner. The state government in-
directly facilitates such countries/
states to enter into partnership
with large Indian industrial houses
to benefit from each other’s tech-
nological expertise.
• To deal with the problem of land
allocation for growth of industry the
Karnataka Industrial Areas Develop-
ment Board (KIADB) has created a
land bank in various regions of the
state. Currently they have 35,000
to 40,000 acres of land and plan to
increase this to 100,000 acres in
different parts of the state.
• To augment power supply the
government is establishing ap-
proximately 11,000 MW of power
projects based on Coal, Gas and
Combined Cycle Power Plants
in Kudgi, Yeramarus, Gulbarga
and Ghataprabha, Belgaum,
Gadag, Harapanahalli and Bidadi.
Karnataka also plans to reduce its
carbon footprint by adding about
4,000 MW capacity in the next 5
years through renewable energy
sources. Hence, power generation
by biomass and wind turbine is
being explored.

M The Karnataka Government is drawing up a new ICT Policy,
combining telecom with IT to give a fillip to infrastructure
development across the state.
M The Semiconductor Policy, Animation, gaming and Special
Effects Policy and plans to set up a Hardware and Animation
City are on the anvil to propel growth in these emerging sectors.
M Information Technology Investment Regions (ITIR) and IT parks
across the state projected to invite an investment of more than
US$ 20 billion by 2030.
M Tier II and Tier III cities hold the future for the development of
the IT services and ITeS sector due to the availability of skilled
manpower and infrastructure facilities at comparatively lower
costs.
M To augment power supply, the Government of Karnataka is
establishing approximately 11,000 MW of power projects and
plans to reduce the state’s carbon footprint by adding about
4,000 MW in the next 5 years through renewable energy
sources.
M ‘Anytime, anywhere’ is now becoming an old concept, the state
government now plans to introduce ‘anytime, anywhere, any
device’ services for Karnataka citizens.
Key Highlights

SPECIAL REPORT
For Information and assistance, please contact
Principal Secretary to the Government
Department of Information Technology, Biotechnology and Science & Technology
Government of Karnataka
6th Floor, 5th Stage, M.S. Building, Bangalore - 560 001, Karnataka, India.
•Ph: +91-80-2228 0562 / 2226 5943 •E-mail: itsec@bangaloreitbt.in
Managing Director
Karnataka Biotechnology & Information Technology Services
# 9, 2nd Floor, UNI Building, Thimmaiah Road, Vasant Nagar
Bangalore - 560 052, Karnataka, India.
•Ph: +91-80-2220 7006 / 2237 0309 •Fax: +91 80 4132 7510
•E-mail: mdkbits@bangaloreitbt.in
Visit : www.bangaloreitbt.in

Karnataka GIM_Dataquest-IDC IT Sector Report_June2010

Recommended

Recommended

More Related Content

What's hot

What's hot (17)

Viewers also liked

Viewers also liked (12)

Similar to Karnataka GIM_Dataquest-IDC IT Sector Report_June2010

Similar to Karnataka GIM_Dataquest-IDC IT Sector Report_June2010 (20)

Karnataka GIM_Dataquest-IDC IT Sector Report_June2010