Karnataka to introduce rural IT policy

Source: http://www.business-standard.com/india/storypage.php?autono=335173

In first such initiative by any state government in the country, the government of Karnataka is in the preparatory phase of bringing out a ‘Rural IT policy’ to attract IT investment to the tier-II and tier-III cities in the state.

While the basic framework of the proposed policy has already been laid, the government is involving the IT industry in seeking their suggestions and guidance in finalising the incentives to be given to IT companies in the proposed policy.

“We are in the process of coming up with a rural IT policy to specify the incentives for the industry to go to the tier-II and tier-III cities. The policy will come as a boost for the company in setting up operations in eight cities in the state, which have been identified by Nasscom as emerging IT destinations in the country,” Karnataka IT secretary Ashok Kumar Manoli said.

He said the state is ensuring to involve the IT industry in devising the policy, and the first phase of discussion has already been over.

“We are also talking to industry body Nasscom to take their suggestions,” the IT secretary said adding, this is extremely important for the IT sector to go to tier-II, tier-III cities when the whole industry is talking about cost reduction to remain competitive. The draft policy is expected to be ready in the next couple of months.

Earlier, Karnataka IT Minister Katta Subramanya Naidu had sought the assistance of Infosys Technologies’ chief mentor N R Narayana Murthy in developing the rural IT policy.

Even though Karnataka government has been promoting cities like Mysore, Mangalore, Hubli, the large chunk of the IT exports from the state is coming from state capital Bangalore, which houses most of the global and Indian top-tier IT firms.

However, the last two years have seen the IT exports from some of the emerging cities including Mysore and Hubli are growing over 90 per cent year on year.

Among the cities other than Bangalore which is contributing the state’s IT exports, Mysore tops the list followed by Mangalore.

The state also expects that the SEZs once become operational will work as a catalyst for the IT firms in setting up shop in smaller cities. Of the 41 SEZs that have been formally approved in the state with a proposed investment of Rs 20,000 crore, 30 will be in the IT and ITeS space.

Eighteen of the proposed IT SEZs will be in cities other than Bangalore, according to the state IT department.

Meanwhile, a huge IT park called ‘Aryabhatta Tech Park’ has been inaugurated in Hubli which is expected to be a big boost for companies planning to go to the city.

Tech park has been built up on an area of 56 acres, in public private partnership basis.