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KARNATAKA THE SILICON VALLEY OF INDIA MARCH 2017 (As of 24 March 2017) For updated information, please visit www.ibef.org 1 KARNATAKA THE SILICON VALLEY OF INDIA ❖ Executive Summary………………….…. 3 ❖ Advantage State………………………... 5 ❖ Karnataka Vision 2020………………….6 ❖ Karnataka – An Introduction……………7 ❖ Karnataka Budget 2016-17……..….…20 ❖ Infrastructure Status………………..….23 ❖ Business Opportunities…………....….44 ❖ Doing Business in Karnataka………...79 ❖ State Acts & Policies.......................... 80 MARCH 2017 For updated information, please visit www.ibef.org 2 KARNATAKA THE SILICON VALLEY OF INDIA EXECUTIVE SUMMARY … (1/2) • At current prices, the gross state domestic product (GSDP) of Karnataka was about US$ 156.23 billion in 2015-16. Strong growth in GSDP • The per capita GSDP increased to US$ 2,557, growing at a CAGR of 12.91% between 2004-05 and 2015-16. • Karnataka is the IT hub of India and home to the fourth largest technology cluster in the world. Karnataka has 47 IT/ITeS SEZs, three software technology parks and dedicated IT IT hub of India investment regions. • Exports of IT and electronic products from the state reached US$ 10.38 billion by the end of December 2015. Exports of IT and electronic products accounted for around 38% share in India's IT and electronic products exports and 52.89% share in Karnataka’s overall exports by the end of December 2015. • Karnataka has vibrant automobile, agro, aerospace, textile & garment, biotech and heavy Vibrant industrial base engineering industries. The state has sector-specific SEZs for key industries such as IT, biotechnology, engineering, food processing and aerospace. One of the preferred • The cumulative FDI inflows in the state from April 2000 to March 2016 were recorded at US$ 20.24 billion, the fourth highest in India after Maharashtra, Delhi and Chennai, and investment destinations accounted for a share of 7% in India’s cumulative FDI inflows. Source: DIPP, Visvesvaraya Trade Promotion Centre, Karnataka Economic Survey 2015-16 Department of Industrial Policy & Promotion MARCH 2017 For updated information, please visit www.ibef.org 3 KARNATAKA THE SILICON VALLEY OF INDIA EXECUTIVE SUMMARY … (2/2) • As of September 2015, the total exports of the state were recorded at US$ 19.63 billion. Strong growth in export During 2015-16, exports contributed about 40 per cent in the state’s economy. Sectors such as biotechnology, computer software and electronics are major contributors in the overall exports from the state. • Karnataka has 44 universities, 4,519 pre-university colleges, 206 engineering colleges Strong knowledge and 293 polytechnics, 47 medical colleges and 38 dental colleges. infrastructure • The state also houses 401 R&D centres; around 400 of the Fortune Global 500 companies outsource their IT services to firms in Bengaluru. • Sugarcane is the major crop of the state with production estimates of about 40.5 million tonnes in 2015-16. The state’s total food grain production is estimated to be 11 million Significant agriculture tonnes in 2015-16. Karnataka is also the third largest producer of plantation crops in the base country. • Karnataka boasts of a diverse flora and fauna and a 320 km natural coast line, which Strong growth in makes it a nature tourist's paradise. Tourist arrivals in the state increased from 25.2 million in 2005-06 to 120.5 million in 2015-16. The state has world heritage sites at Hampi and tourism sector Pattadakal. The sector contributes 14.8% to GSDP of Karnataka; plans are afoot to expand to 26% by 2020. Source: Indian Minerals Yearbook 2014, Economic Survey of Karnataka 2015-16 Karnataka State Budget 2016-17 MARCH 2017 For updated information, please visit www.ibef.org 4 KARNATAKA THE SILICON VALLEY OF INDIA ADVANTAGE: KARNATAKA HighGrowing economic demand growth Rich talent pool 2022 June 2016 • GSDP expanded at a CAGR of • Karnataka is termed as the target 13.59% between 2005-06 and Knowledge Capital of India. 2015-16. • The state has successfully • Buoyant services (IT, tourism) and attracted skilled labour, especially, Solar energy Capacity industries driving economic growth. in the knowledge sector. share in total allocated for • Sector specific SEZs and SIRs Karnataka is among the states energy that produce a large number of Solar energy- facilitating growth. consumption doctors, engineers and medical is expected to 2,320.50 MW technicians in the country. reach 3% Advantage Karnataka Infrastructure Policy support • Well-developed social, physical • Wide range of fiscal and policy incentives for businesses under the and industrial infrastructure. Karnataka Industrial Policy, 2014-19. • Good road, rail, water and air • Investor-friendly sector-specific connectivity and substantial port policies to promote industries such as IT, biotechnology, tourism and infrastructure. manufacturing. • Well-developed telecom • Simplified procedures for investment. infrastructure. • In January 2017, Karnataka department of Commerce and • Excellent healthcare facilities. Industries introduced an NRI policy to attract investments from non- resident Kannadigas. Source: Karnataka Udyog Mitra, D&B Cluster State Overview, Karnataka Vision 2020, Department of Industrial Policy and Promotion, Visvesvaraya Trade Promotion Centre, MARCH 2017 For updated information, please visit www.ibef.org 5 KARNATAKA THE SILICON VALLEY OF INDIA KARNATAKA VISION 2020 • Build infrastructure to boost • Develop the state as a vibrant productive potential of the knowledge society. economy. • Focus on job oriented growth • Various metro rail and mono through skill development of the rail projects are in progress. workforce. • Increase rural incomes • Better governance through Education/ through greater viability of Infrastructure wider participation and deep Skill agriculture and allied activities. democratic decentralisation. development • Bridge the gap between • Encourage transparency and Poor and accountability. socially backward and backward Governance vulnerable groups and rest classes of the people. Vision 2020 • Build and sustain Bangalore’s Healthcare/ Industry leadership in science, Social technology and knowledge amenities • Improve access and based industries. Women availability of quality Tourism • Achieve a sustainable and healthcare for all. empowerment orderly process of industrialisation and urbanisation. • Preserve and promote • Enhance opportunities and Karnataka’s rich heritage. empower women across • Karnataka Tourism Vision economic, social and Group (KTVG) was set up in political spheres. October 2013 to advise on promoting tourism in state. Source: State Planning Department MARCH 2017 For updated information, please visit www.ibef.org 6 KARNATAKA THE SILICON VALLEY OF INDIA KARNATAKA FACT FILE Some of the prominent cities in the state are Ankola, Bengaluru, Bagalkot, Belgaum, Bidar, Bijapur, Chikmagalur, Chitradurga, Dandeli, Hubli-Dharwad, Mangalore, Mysore and Shimoga. Karnataka has a tropical climate with three major seasons: warm and dry from February to May, monsoon from June to October and winter from November to January. Parameters Karnataka Capital Bengaluru Source: Maps of India Geographical area (sq km) 192,000 Karnataka is located in the southern region of India. The state is surrounded by the Arabian Sea in the west, Goa in Administrative districts (No) 30 the northwest, Maharashtra in the north, Andhra Pradesh in the east, Tamil Nadu in the southeast, and Kerala in the Population density (persons per sq km) 319 southwest. Total population (million) 61.1 Languages spoken are Kannada, Tulu, Kodava, Hindi and Sex ratio (females per 1,000 males) 973 English. Literacy rate (%) 75.6 Male literacy rate 82.5 Female literacy rate 68.1 Source: Economic Survey of Karnataka 2015-16, Census 2011 Office of Registrar General, India. MARCH 2017 For updated information, please visit www.ibef.org 7 KARNATAKA THE SILICON VALLEY OF INDIA KARNATAKA IN FIGURES … (1/2) Parameter Karnataka All states Source Economy 2015-16 2015-16 Directorate of Economics & Statistics of Karnataka, GSDP as a percentage of all states’ GSDP 7.66 100.0 Central Statistics Office Directorate of Economics & Statistics of Karnataka, GSDP growth rate (%) 13.05 8.71 Central Statistics Office Directorate of Economics & Statistics of Karnataka, Per capita GSDP (US$) 2,532 1,546 Central Statistics Office Physical Infrastructure Installed power capacity (MW) 17,333.92 305,554.25 Central Electricity Authority, as of August 2016 Telecom Regulatory Authority of India - as of Wireless subscribers (No) 64,447,332 1,078,422,215 October 2016 Ministry of Communications & Information Internet subscribers (No) 23,960,000 367,480,000 Technology - as of September 2016 NHAI & Karnataka Roads and Building National Highway length (km) 6,502.29 100,087.08 Department, 2015-16 Major and minor ports (No) 1+10 13+187 India Ports Association Airports (No) 5 125 Airports Authority of India MARCH 2017 For updated information, please visit www.ibef.org 8 KARNATAKA THE SILICON VALLEY OF INDIA KARNATAKA IN FIGURES … (2/2) Parameter Karnataka All states Source Social Indicators Literacy rate (%) 75.6 73.0 Census, 2011 Birth rate (per 1,000 population) 18.5 21.6 SRS Bulletin Investment Department of Industrial Policy & Promotion, FDI equity inflows (US$ billion) 20.24 288.51 April 2000 to March 2016 Industrial Infrastructure Department of Economic Affairs, Ministry of PPP projects completed & operational (No) 129 1,246 Finance, Government of India, July 2016 Department of Commerce, Ministry of Operational SEZs (No) 25 186 Commerce