Karnataka will give capital investment subsidy of 25% on industrial plots to attract investments in the electronics system design and manufacturing (ESDM) sector, deputy chief minister CN Ashwath Narayan said on Wednesday.
The incentives would be applicable for industrial plots across Karnataka except Bengaluru urban and rural districts only for investments in the ESDM sector, and up to 50 acres on the guidance value/purchase value from the government-owned entities such as KIADB and KSSIDC, and 20% on plant and machinery. The incentives are applicable for investments in the ESDM sector over the next five year period, Narayan, who is also the IT/BT minister, said in his inaugural address at the India Electronics & Semiconductor Association (IESA) Vision Summit-2020.
Other incentives include full reimbursement of stamp duty and registration fee, and land conversion fee, and power tarriff subsidy of Re 1 per unit for a five-year period. The government will also give a production linked incentive for new investments as well as expansion of 1% of annual turnover during the policy period of five years.
The products/activities eligible for incentives under the special incentives scheme for the ESDM sector include manufacturing and/or design of electronics products, semiconductor manufacturing and design, electronic manufacturing services, solar cell manufacturing. LED and any other electronics verticals/products covered by the national policy on electronics (NPE) / national manufacturing policy (NPM).
The government has, in consultation with the industry, set up a Karnataka Digital Economy Mission to promote digital industry and attract investments. The mission will handhold companies and suggest policy initiatives. This will act as a bridge between the government and industry, the deputy chief minister said.
The ESDM has the potential to play a huge role in the nation’s economic recovery, with the major driver being the private sector and government playing the role of an enabler in creating the right policy ecosystem, he said.
Karnataka has been a pioneer in innovation and technology. The state has an estimated GSDP of $220 billion and contributes 64% to India’s ESDM exports and 10% to India’s electronic industrial output. The State is India’s largest chip design hub, with 85 plus chip design companies and 70% of India’s chip designers are based here, the depuy chief minister said.-The Economic Times