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December 24, 1997


No IT industry drain, claims Karnataka

The Karnataka government has denied that information technology industries are shifting their units from the state to competing neighbours like Andhra Pradesh and Karnataka.

Minister for Large and Medium Scale Industries R Deshpande has said that the turnover of the IT industry, which was around Rs 18 billion last year, is estimated to increase to Rs 50 billion by 2000 and to Rs 100 billion by 2002.

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The government has given priority to the industry and an investment of Rs 1 billion entitles a unit to be considered as a 'mega' unit, which can avail of certain concessions.

He said the IT sector in the state has achieved a growth rate of 118 per cent in the first half of this year compared with the corresponding period last year.

Deshpande said the government has not taken a final decision on the reintroduction of octroi. He said the chief minister had constituted an advisory board to suggest ways of promoting the IT sector.

New IT growth centres in the cities of Mysore, Magnalore and Hubli-Dharwad and other regions have been identified. Setting up IT industries in other parts of the state would be encouraged. The government has decided to set up two more satellite earth stations at Mysore and Dharwad to give a fillip to computer software industry.

The minister said a taskforce under the chairmanship of Department of Commerce and Industries Principle Secretary N Vishwanathan has been constituted for the IT industry.

Deshpande pointed out that software and hardware units have been exempted from power cuts. Although IT industries are not as power intensive as other sectors, they require a steady and continuous supply of electricity.

The state government has sanctioned a 30 MW plant to the Keonics Electronic City on the outskirts of Bangalore, which is being run by an association of the computer industry.

He said the state government is considering introducing computer education programmes at the secondary school level.

The aim is to introduce students to computers at an early age and enable them to enrol for computer courses later at the college level.

Deshpande said the Karnataka State Industrial Investment and Development Corporation, with the support of the Small Industries Development Bank of India would commence venture capital operations shortly.

It would largely be for the benefit of the small and medium industries and would have a corpus of Rs 300 million.

At an informal meeting organised by the minister recently, the chief executives of a number of leading computer companies in the state agreed to participate in the government's project to establish an Indian Institute of Information Technology at Bangalore. The Rs 500 million project is expected to start programmes in about two years.

Deshpande has also launched a manual giving information about the incentives and concessions and rules and procedures of the new industrial policy.

Karnataka Law Journal Publications and the State Industries and Commerce Department have brought out the publication, designed to help entrepreneurs.

Earlier: Who's afraid of Chandrababu Naidu?

- Compiled from the Indian media

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