Situated at an altitude of 920 meter's above sea level, Bangalore
is the principal administrative, cultural, commercial and industrial
center of the state of Karnataka.
city, which is spread over an area of 2190 square kilometers, enjoys
a pleasant and equable climate throughout the year. Its tree-lined
streets and abundant greenery have led to it being called the 'Garden
City' of India.
However, since local entrepreneurs and the technology giant Texas
Instruments discovered its potential as a high-tech city in the
early 1980s, Bangalore has seen a major technology boom. It is now
home to more than 250 high-tech companies. Including homegrown giants
like Wipro and Infosys. Consequently, Bangalore is now called the
'Silicon Valley' of India.
Telecommunication Infrastructure in Karnataka
An extensive transmission infrastructure of optic fiber cable and
digital microwave routes has been planned through out Karnataka
with the involvement of three major organizations.
Benefits to Investors
The Karnataka Government offers special assistance, incentives and
concessions for the Information Technology industries which have investments
in fixed assets up to Rs. 100 Crores. The explosive growth of IT in
Karnataka has been helped in no small measure by the progressive policies
of the Government. Some of the benefits that the Government offers
investors in the Information Technology sector in Karnataka are listed
Sales Tax Exemption
Information Technology Industries, irrespective of level of investment
and location of the unit, will be offered Sales Tax exemption for
a period of 10 years or deferment for a period of 12 years, subject
to a ceiling of 200% of the value of fixed assets. Such exemption
/ deferment will also cover turnover tax payable by the unit.
Entry Tax Exemption
Information Technology Industries will be exempt from payment of
Entry Tax and Purchase Tax on computer hardware, computer peripherals
and other capital goods including captive power generation sets,
during implementation stage which can be extended up to 5 years
from the date of commencement of implementations.
Power Tariff Concessions
||Software industries will be treated as industrial (and not
commercial) consumers and electricity tariff applicable to the
industrial consumers will be levied on such industries.
||Software industries, which need electrical power up to 5 KVA,
will be permitted to be established without any local restrictions
and will be made eligible for all incentives and concessions.
||As continuous uninterrupted and quality power supply is one
of the prime requirements of sustenance and growth of Information
Technology Industries, these industries will be given priority
in the sanctioning and servicing of power. The IT industries
will also be exempt from power-cuts without any time limit.
||Captive power generation sets installed by the Information
Technology Industry will be eligible for the following incentives:
Total exemption from payment of electricity tax without any time
Total exemption from payment of Sales Tax on fuel used for captive
power generation without any time limit.
Quick Clearances from Pollution Control Board
Karnataka State Pollution Control Board has simplified the procedure
for seeking clearances under the Air Act and the Water Act for the
software companies that use captive DG Sets.
Concessions on Company Registration Charges
IT companies taking up expansion, diversification, and modernization
get concessions on registration charges.
Industry in Bangalore
The evolution of the IT industry in Bangalore
||1984 - Texas Instruments enters India for offshore development.
||1986 - DoE announces software policy.
||1991 - Software Technology Parks of India (STPI) is set up
||1992 - Exclusive satellite international gateway for export
industry is set up.
||1997 - Govt. of Karnataka announces IT Policy and Karnataka
becomes the first state in India to do so.
||1998 - Number of IT companies grows to 253, with total projects
worth US $840 Million.
||1999 - Indian Institute of Information Technology, Bangalore
(IIITB) and the KITVEN FUND are established.
||2000 - Number of IT companies grows to 782, with total projects
worth US $1.1 Billion.
||2001 - Number of IT companies grows to 928, with total projects
worth US $1.6 Billion.
Companies in Bangalore
There are more than 100 multinational companies in Bangalore.
In the year 2001 Bangalore has seen a cumulative investment of around
US$1.3 billion in the software industry. About 165 new software
industries have been established and the total number of software
professionals is about 80,000.