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Business News/ News / India/  Karnataka approves new IT policy, incentives for proposed ESDM cluster
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Karnataka approves new IT policy, incentives for proposed ESDM cluster

The Karnataka cabinet on Thursday approved a new Information Technology (IT) policy to help the state increase its contribution towards the goal of a trillion dollar digital and create six million jobs during the policy period

The new policy from 2020-25, the government said, would help in Karnataka retaining and leveraging its position in technology and innovations Photo: Priyanka Parashar/MintPremium
The new policy from 2020-25, the government said, would help in Karnataka retaining and leveraging its position in technology and innovations Photo: Priyanka Parashar/Mint

Bengaluru: The Karnataka cabinet on Thursday approved a new Information Technology (IT) policy to help the state increase its contribution towards the goal of a trillion dollar digital and create six million jobs during the policy period.

The new policy from 2020-25, the government said, would help in Karnataka retaining and leveraging its position in technology and innovations.

The policy outlines its goal to enable “the State’s IT industry to contribute 30% to India’s goal of becoming a trillion-dollar digital economy".

Karnataka’s economy is centered around its IT ecosystem that is one of the biggest contributors to the central coffers. But the covid-19 induced lockdown has further exacerbated Karnataka’s fledgling finances and acute fund crunch. The reduction in cash inflows from the centre has forced the state into more debt and also amending laws on industries, labour and land to attract more investments into the state.

The new policy also aims to boost IT penetration & innovation, enable a remote, distributed labour force beyond Bengaluru and evolve a Cyber Security policy, the government said in a statement.

The cabinet also cleared special incentives for the newly proposed Electronics System Design and Manufacturing or ESDM cluster. The cabinet approved capital investment subsidy of 25% on land, complete reimbursement on costs like stamp duty and registration, land conversion rate. It also proposed 1 per unit for five years from the month of commercial production, 100% exemption from duty on electricity. The cabinet also approved 1% of annual turn.

“An investment of over 5,000 crore is expected by the state through this scheme, with a potential to generate 43,000 direct employment over next 5 years," the government said in a statement.

The cabinet also approved Rs600 crore watershed rejuvenation project that includes 420 crore financing from the world bank across 20 districts that would impact a total area of around 10 lakh hectares.

Calamity-prone Karnataka has oscillated between floods and droughts affecting livelihoods in the state.

State revenue minister R.Ashok said that a team from the centre will visit Karnataka on 7 September. He added that the state has sought an interim relief of 4800 crore to help provide relief for floods, landslides and rain-related damage in the state this year.

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Published: 03 Sep 2020, 08:38 PM IST
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