Karnataka has gone ahead of its immediate neighbours — Andhra Pradesh and Tamil Nadu — in realising the dream of setting up an Information Technology Investment Region (ITIR).
The state is set to become the first state in the country to establish ITIR to promote investment, augment exports and generate employment.
The state legislative assembly has passed a Bill to facilitate setting up of the ITIR here on Thursday. The Act will be called the Karnataka Information Technology Investment Regions Act, 2010.
The ITIR will be a self-sustainable integrated investment region, housing IT, ITeS and hardware parks, supported by residential townships, a mini airport, high-speed railway network, shopping malls, hospitals and educational institutions, among others.
The ITIR, to be developed in two phases and spread over 10,000 acres near Bangalore international airport at Devanahalli, about 40 kms from here, is expected to attract an investment of over Rs 2 lakh crore. The state government would involve the private sector for developing the infrastructure.
Ashok Kumar Manoli, principal secretary, Department of IT/BT, Science and Technology, Karnataka, told Business Standard: “Over 55 software and hardware companies, including leading ones like Infosys, TCS and Wipro, have shown interest in establishing their presence at the ITIR. It will be spread over 2,200 acres in the first phase. We have issued preliminary notification for acquiring 2,080 acres near Devananhalli. A management board will govern the ITIR and the apex body on all matters related to the project would be the State Empowered Committee, under the chairmanship of the chief minister.”
The Government of India had published a policy resolution for setting up information technology investment regions on May 28, 2008, to promote investment in the IT, ITeS, electronic hardware manufacturing units, which have proved to be significant economic growth engines.
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Apart from Karnataka, other states like Andhra Pradesh, Tamil Nadu and Orissa have also proposed to come out with an ITIR and have approached the Centre for approval.
“The setting up of an ITIR by the Karnataka government in Bangalore is a welcome move and I am sure it will bring further development to Bangalore. It will definitely help attract good IT companies to set up base and expand their operations in Bangalore. We will certainly explore opportunities to set up operations in the ITIR when it is ready,” said Infosys Technologies CEO and MD Kris Gopalakrishnan.
Manoli said the ITIR, once fully developed, was expected to provide employment — both direct and indirect — to three million people. The companies setting up shops in ITIR would enjoy similar kind of tax concessions as they enjoy at IT SEZs, he said.
Global consulting firm, Deloitte, has prepared the detailed project report for the ITIR and the proposal is awaiting the approval of the central government.
The ITIR would be an integrated township with modern amenities like the roads, railway network, metro rail and mini airport, to facilitate investors’ faster approach to the location.
Meanwhile, the Andhra Pradesh government is not looking at bringing out any legislation in this regard, as it plans to develop an ITIR under the existing Andhra Pradesh Urban Area Development Act. “The ITIR in Andhra Pradesh will be both greenfield and brownfield. Initially, it aims to expand its Cyberabad area and declare it as ITIR,” Andhra Pradesh IT Secretary Ratnaprabha said.
She added the Andhra government proposed to attract an investment of Rs 2.19 lakh crore and provide direct employment to 1.5 million people and indirect employment to 5.3 million people over a period of 15 years. It also expected to generate Rs 30,170 crore of indirect revenue to the state exchequer. she further said.