Workshop held on Karnataka semicon policy

BANGALORE, INDIA: The government of Karnataka has launched the “Karnataka Semiconductor Policy 2010” on 25-02-2010 to give an impetus to the growth of Semiconductor Industries in the State. The Policy Document is available in the Departmental website www.bangaloreitbt.in.

In order to enable the Semiconductor Companies to avail the benefits enumerated in the Policy, and to create awareness among the industrialists a half-dayseminar has been organized by the Department of IT, BT and S&T, in coordination with ISA and MAIT, today in the Ball Room of The LaLiT Ashok Hotel, Bangalore.

Focus of the Policy is as follows:

a)Retain its edge in design by attracting fresh investments and expansion by existing companies within the state.
b)Attract manufacturing related investments by focusing on 3 key activities.
I. Promote Karnataka as a semiconductor design hub.
II. Attract investments in high-tech semiconductor manufacturing.
III. Promote generation and use of green energy – specifically, solar energy.
IV. Focus on manpower development.

Salient features of semicon policy
a) As a policy support to encourage innovation and R&D in chip design, product development, telecom, etc., the government will set up a fund known as ‘KARNATAKA FUND FOR SEMICONDUCTOR EXCELLENCE’ of Rs.10 crores. This fund will be available to the private companies covering up to 50 percent of their R&D expenses, subject to a limit of Rs 10 lakhs per unit.

b) Provide additional amount of Rs. 25 crores, toward 26 percent contribution to the KITVEN IT Fund for raising funds from the market to assist start up semi-conductor units engaged in design and embedded software.

c) Provide incentives set up in the state by lowering the threshold investment for ATMPs/ecosystem units with investment above Rs. 400 crores and up to Rs. 1,000 crores.

d) Provide assistance of 50 percent of the total cost toward purchase of proposed equipment, for augmenting the Orchid Tech Space in STPI to a Characterization Lab.

e) Provide financial assistance to firms for filing IP in accordance with the incentives provided in the Industrial Policy 2009-2014.

f) To encourage setting up of semiconductor units in Tier-2 cities including Mysore, Mangalore, Hubli an incentive of Investment Promotion Subsidy would be provided in accordance with the Karnataka Industrial Policy 2009-14.

g) Government to set up a focused school under IIIT at a cost of Rs. 10 crores and strengthen the Research Labs in the institute at a cost of Rs. 5 crores, with a contribution of 25 percent from the industry.

h) ATMP units will be encouraged with special incentives in the proposed ITIR near BIAL, Bangalore (Special incentives for the ITIR to be announced separately).

The following fiscal incentives would be provided to semiconductor units as per the Karnataka Industrial Policy 2009-2014:

1. Investment Promotion Subsidy.
2. Exemption from Stamp Duty to MSME, Large and Mega Projects.
3. Concessional Registration Charges to MSME, Large and Mega Projects.
4. Waiver of Conversion Fine to MSME, Large and Mega Projects.
5. Exemption from Entry Tax to MSME, Large and Mega Projects.
6. Incentives for Exported Oriented Enterprises to MSME, Large and Mega Projects.
7. Subsidy for setting up ETPs to MSME, Large and Mega Projects.
8. Interest Free Loan on VAT to Large and MEGa Projects.
9. Anchor Unit Subsidy to first two Manufacturing Enterprises with minimum employment of 100 members and minimum investment of Rs. 50 crore.
10. Special incentives for Enterprises coming up in low HDI districts only for large and mega Projects.
11. Interest Subsidy to Micro manufacturing enterprises.
12. Exemption from Electricity Duty to Micro and Small manufacturing enterprises.
13. Technology upgradation, quality certification and patent registration micro and small manufacturing enterprises.
14. Water harvesting/conservation measures to small and medium manufacturing enterprises in all zones.
15. Energy conservation for small and medium manufacturing enterprises in all zones.
16. Additional incentives to the enterprises following Reservation Policy of the state.
17. Refund of cost incurred for preparation Project Report for micro and small manufacturing enterprises.

Inaugurating the session, Aravind Jannu IAS, director, Directorate of IT & BT & MD, KBITS said:“Indian semiconductor design industry is expected to reach $7.5 billion in 2011. Karnataka is currently home to over 80 design companies and contributes significantly to the overall revenue. The Karnataka Semiconductor Policy 2010 is aimed at further strengthening Karnataka’s leadership in the chip design and embedded software. We now want to extend this strength into high tech manufacturing and the government is working closely with ISA and other industry bodies in creating industry friendly policies that will attract investors.”

Dr. Pradip K. Dutta, vice chairman, ISA and corporate VP, Synopsys Inc and MD, Synopsys (India) Pvt Ltd said: “By 2020 electronics consumption in India will reach $400 billion, today it stands at $45 billion and over 80 percent of it is imported. There is an urgent need to focus on domestic Electronic System Design and Manufacturing (ESDM) industry and work towards enabling this ecosystem. If not, import bill for electronics will soon exceed that of oil.”