Introduction

“Take up one idea. Make that one idea your life - think of it, dream of it, live on idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone. This is the way to success.”

Swami Vivekananda

For a State an idea means a manifestation, the conjunction of

the wish to reach out to the last person within a geographical

limit and the aspiration for complete well-being. Therefore, when

Swami Vivekananda speaks of an idea taking over ones very

existence, for a State it would mean a well-balanced, inclusive

approach, according to certain standards and ideals, where

governance and modernity are intrinsic.

This has been the story of the grand State of Karnataka in the

past two years, under the stewardship of Chief Minister

B S Yeddyurappa. To exemplify, the State’s Capital and showcase

city of Bangalore, according to the global list of cities compiled

by HR Consultancy Mercer for 2010, has climbed a couple of

notches and continues to be the best place to live in among

Indian cities.

Bangalore’s ranking is but the reflection of exemplariness and

distinction Karnataka has earned within the Union of India. In the

past two years the State has raked an impressive Rs. 5 lakh crore

industrial growth, in spite of the global financial crisis, to remain in

the forefront as one of the most-developed States in the country.

Karnataka’s renewed developmental thrust in the past two years

shows in its governance, driven by the technology of the times

and the best practices across the globe. In a short span, the State

Government has been able to make it clear on the ground that a

holistic intra-State approach is the only way to emulate its own

Bangalore and information technology success stories.

The Government has successfully put in place the new Industrial

Policy 2009-14, an effort to enhance industry’s share in the Gross

State Domestic Product to 20% by 2014, generate 10 lakh jobs,

double the State's exports from the current level of Rs. 1,30,000

crore, focus on providing quality infrastructure, focus on skill

development and entrepreneurship, and enhance the

development of micro, small and medium enterprises.

It is to the Government’s credit that the Global Investors Meet

2010 has already garnered investments worth Rs 3.5 lakh

crore,which in turn is expected to create 6.53 lakh employment

Mangaloreopportunities.

The new industrial policy is aimed at making the State

prosperous through development of human and natural

resources in a systematic, scientific and sustainable manner.

In Budget 2008-09, the State Government spelt out its intension

to implement Suvarna Karnataka Development Corridor

Programme embracing the entire State. Such a corridor will

possibly benefit many potential areas in the Karnataka region

from Bangalore to Belgaum and laterals of about 50 to 1500 km

from the National Highway and rail network, necessary freight

corridor for trade industry. Sectors such as energy, road and rail

linkages, inland container depots, free trade zones and urban

infrastructure are the major key segments to benefit from this

Corridor and make a significant impact on Karnataka’s economic

growth. The Corridor proposes to cover 11 district

headquarters and more than 20 major towns along the

highways/major roads and rail links.

Karnataka - The Knowledge Hub of Asia

Karnataka accounts for around 5% of India’s national income and

the State has been ranked No. 1 by the World Bank for its

investment climate in a study that analysed 16 States using 46

investment parameters. The fact that one new MNC invests in

the State every week is testimony for the fact that Karnataka is

the leading investment destination in the country. One of the

fastest-growing states in the country, Karnataka has a strong

industrial base and vibrant tertiarry sector. It’s services sector, has

in fact been, the engine of growth.

The reasons that make Karnataka an attractive destination for

investors are:

• Excellent infrastructure

• Readily available land

• Highly skilled technical manpower base

• Large number of technical and research institutes

• Techonology savvy work force with proficiency in English

• Cultural diversity and cosmopolitan urban centres

• Advanced healthcare facilities

• Connectivity through air, rail, sea and road network integrated

with the rest of the world

• A State with effective law and order

• Liberalised economy with single window clearance for investors

• Excellent logistics support

• Abundant primary resources

Home to 700 MNCs and 87 Fortune 500 companies, Karnataka

is a State with varied agricultural and mineral resources, and

strong manufacturing capabilities.

Karnataka is one of India’s leading industrial states, contributing

almost 8% to the national manufacturing income. It has a long

tradition of supporting entrepreneurs, and encouraging

innovation and research. Its strong and vibrant industrial base

combines the intrinsic strengths of large industrial public sector

undertakings, large and medium privately owned industries, a

wide range of small-scale units. While at one end of the

spectrum, the State is the aerospace hub of the country

operating on cutting-edge engineering and IT capabilities, on the

other end, its garment sector, dominated by small units,

contributes 20% to the national output.

Karnataka is also the State with an impressive number of

education and skill-development institutes and organisations - it

has one of the highest number of medical colleges, third-highest

number of engineering colleges, highest number of Industrial

Training Institutes in the country and is home to several premier

research institutes of international repute.

The State is the pioneer and global face for India in Aerospace

and Biotech. Brand Bangalore has become synonymous with

cost-effective and quality solutions. While at the beginning, this

represented off-shoring of low-end services in the BPO sector,

the latent strengths of the State has now made it the first-stop

destination for cutting-edge research and manufacturing centres.

Bangalore is the world’s fourth-largest technology cluster as it has

the perfect ecosystem fostering growth and development of

state-of-the-art technology. The city is also well known on the

global medical map as one with many super-speciality hospitals

providing excellent international quality health care.

The Karnataka State Government has strived to provide an

investor-friendly responsive administration. The Karnataka Udyog

Mitra, set up more than a decade ago, works as single contact

point for all investors - from receiving a proposal to ensuring its

implementation. KUM is actively working with the investors at all

stages. The State Level Single Window Clearance Committee and

the State High Level Clearance Committee (for investments

more than Rs. 50 crore) have been working to clear proposals in

a hassle-free manner.

The Government has put in place the all-new Karnataka State

Industrial Policy 2009-14, with various improvements over the

I have a dream, a vision for this one State with many opportunities. Vision 2020 for Karna-taka seeks to propel a holistic growth by promoting equitable development of sectors and districts, by providing employment to all sections of people and regions of the State. It will also focus on ensuring excellent infrastructure, quality education, decent living conditions and life security for all our citizens.

B.S. YeddyurappaChief Minister of Karnataka

one of 2006-11. The policy includes:

• One main policy measure intended to smoothen the path for

investors is the exclusive land acquisition policy and

development of a Land Bank – each district to have 2,000

to3,000 acres acquired by the Karnataka Industries

Development Board for industrial development.

• The Suvarna Karnataka Development Corridor Initiative has

been planned to connect cities in all districts through a

network of highways, with cluster development in designated

zones.

• Sector-specific industrial zones and SEZs have been identified

that match the natural resources and capabilities of a district

with industry requirements..

• There is a special focus on skill development to enhance

generation of technical manpower and ensure that Karnataka’s

lead in providing skilled workforce is sustained.

• Creation of world class infrastructure through investments in

power, roads, water, warehouse and logistic facilities,

connectivity through rails and ports etc. has been planned to

facilitate entry of investors.

In addition to the regular State industrial policies, Karnataka has

formulated sector-specific policies – IT, Biotech, Semiconductor,

Renewable Energy Policy, Suvarna Vastra Neethi for textiles,

Tourism Policy. Each of these policies targets a specific sector with

incentives, concessions and development schemes that are suited

to specific needs. The Semiconductor Policy 2010 deserves

special mention as it ties in with both the State IT and Renewable

Energy Policies by encouraging programmes like the Smart Grid

pilot project at the Electronic City, geared to raise energy

efficiency in the State.

The State government well understands the pressing need to

upgrade infrastructure, and Karnataka aims to double investment

in the sector to meet the needs of a fast-growing economy.

Private sector partnership is being actively sought by the

investor-friendly Government – more than 200 projects worth

Rs. 135,000 crore are in various stages of implementation.

Karnataka is a State known for its stable and forward looking

government, effective law and order and minimal disruption to

economic activity. In the India Today State of the States Ranking

2009, Karnataka has maintained its fourth rank in governance.

Karnataka is a State that has put its IT capabilities to optimum use

not just to attract global high-technology investment, but also to

raise domestic efficiency through e-governance initiatives.

The key factors that make Karnataka stand out as an investment

destination is the State’s rich resource base and progressive

policies that have combined over the years to create a rapidly

growing economy, attract global investment and make it a truly

Global State.

Karnataka is well set to lead the nation, showing the way through

effective public-private partnership. For investors in any field, the

two primary inputs that are vital for production are land and

labour; Karnataka leads the country in both. Karnataka’s new

Industrial Policy 2009-14 has provided for 50,000 acres of land

across 5 industrial corridors to facilitate project implementation,

especially for large projects facing land acquisition issues in other

States. In addition, Karnataka ranks first amongst all the States in

India in the labour supply ecosystem , providing access to a vast

pool of skilled manpower as well as research, engineering and

design capabilities in all frontier sciences, the State is in fact the

Knowledge Hub of Asia.

India and Karnataka

India’s impressive growth performance over the past decade has

made it a global powerhouse today, a force to be factored in all

the calculations of world growth and development. High

economic growth in a country that has a stable democracy and

free market has in fact made India the cynosure of the world in

the new millennium. Add to this a large stock of manpower, the

fastest growing population of workers and consumers, strong

spirit of entrepreneurship and innovation that has been given free

rein with the economic reforms over the past two decades, and it

is clear why India has attracted global investors from all sectors.

India ranks 13th in Global FDI flows ; but more importantly, it

ranks third on the list of most-favoured FDI locations, as is true

for the State of Karnataka. While India burst onto the global

scene by establishing its leadership in information technology, the

past few years have seen its stature rise in various sectors,

including Steel, Auto, Biotech and Pharma. India’s potential for

growth has been recognised time and again and the economy is

expected to grow in size from 7% of the US’s in 2007 to 88% in

2050. Going ahead, the strong boost for infrastructure and a

liberalised environment are a sure recipe to achieve India’s aim of

sustainable growth at 8.5% per annum for the next decade.

The country is in fact poised for greater achievements ahead as

India has bucked the global slowdown. While the developed

world was in a contraction mode following the global financial

crisis, India registered a 6.7% growth in 2008-09 and 7.2% the

following year ; the country continued to be the second-fastest

growing economy in the world for the fourth year in a row. The

twin engines of growth have been the service and the

manufacturing sectors, which have expanded at 7.5% and 10.3%

per annum over the period 2004-2009. The world now looks to

the developing economies for the much needed push to growth

as China and India power the world.

Karnataka, the eighth largest State in India, has contributed

significantly to India’s rising success . Karnataka, with its varied

agricultural and mineral resources and strong manufacturing

capabilities accounts for close to 10% of India’s product exports.

The capital Bangalore is in fact known globally as the IT capital of

India, the State’s software exports form more than 35 % of India’s

software exports. Karnataka is also the Knowledge Hub of the

nation – it has the highest number of medical colleges and third

highest number of engineering colleges in the country. The State

is the pioneer in two cutting edge industries, aerospace and

biotech, where it is the global face for India. Brand Bangalore has

come to mean cost effective and quality solutions in numerous

industries. While at the beginning, this represented off-shoring of

low-end services in the BPO sector, the latent strengths of the

State have now made it the first stop destination for

high-technology cutting edge research and manufacturing centres

of global majors. Bangalore is the world’s fourth largest

technology cluster as it has the perfect ecosystem fostering

growth and development of State-of-the-art technology.

The State economy has a sound base in its rich resources,

manufacturing expertise and proactive government policies that

have kept growth going in tough times.

Agriculture sustains around 63 % of the population and the State

accounts for 6% of all food grains production in India and 14% of

India’s groundnut output. The State government is encouraging

horticulture and agro-processing to utilize the full potential of

resources. Karnataka is one of the country’s largest producers of

fruits and vegetables, it produces 12% of fruits and 8% of

vegetables grown in India. The State ranks second in the

production of flowers, it has in fact the largest area in the country

under horticulture. Karnataka ranks second in area and third in

production of plantation crops. Karnataka contributes 70% of

India’s coffee production and is also the largest producer of

spices, aromatic and medicinal crops. The State is the second

largest producer of tobacco in the country and the third largest

producer of sugar in the country, contributing 5.22% to India’s

sugarcane output. It contributes 6% of the total cotton produced

in the country, 65% of India’s raw silk and 12 % of India’s wool

production, making the State a leading centre for the textile and

garment industry.

Karnataka’s manufacturing sector is well-diversified, it contributes

8% to India’s industrial income, with firms in all sectors of

manufacturing - engineering, auto, chemicals, electrical and

electronic products, food processing etc. Industrial growth has

accelerated from 6.2% in the nineties to 8.9% per annum since

2000. Karnataka is India’s third largest producer of steel and

seventh largest producer of cement. It accounts for 20% of India’s

garment production and 8% of national apparel exports. The

State is India’s fourth largest automobile hub and the largest

contributor to the aerospace industry.

Karnataka currently contributes 5% to India’s service sector

income, however in certain sectors it is the undisputed leader.

Capital, Bangalore, has become the powerhouse of information

technology in the country. The State was the first in India to set

up a Software Technology Park in 1991 and reigns as the leader

in software exports, bringing in Rs. 67,400 crore in 2008-09. The

first State to bring the private sector into higher education,

Karnataka has the highest number of medical colleges in the

country. The State is one of the main centres for medical tourism

in the country, as its super speciality hospitals draw in patients

from abroad. Always on the forefront of innovation, the State is

the biotechnology hub of the country, home to 187 out of India’s

340 biotech firms, and is leading in nanotechnology research.

Currently ranking fourth in tourist destinations in India, the State

is set to become the leading destination for tourists, in fact the

State policy aims to make Karnataka the single largest sector in

the economy by 2014.

Karnataka – a resource rich and well connected State

These are the basic facts of the State – location, geography,

climate, demography, physical resources, connectivity for

transportation and communication have been attuned to the

State’s quest for development. For, Karnataka is a leader in

innovation -- a major contributor to the State’s strengths in global

outlook – a resource base that’s rich in scientific research and

training, and skilled manpower resources.

Karnataka: a resource rich State

• Rich in natural resources

• 5 National Parks and 21 Sanctuaries

• Fourth largest State in terms of forest cover

• The Silk State of India – 50% production in Karnataka

• The Coffeemaker of India -- State accounts for 70% of India’s

coffee bean production

• Second largest iron-ore reserves in the country and a quarter

of the nation’s limestone deposits

• State rich in platinum and other high-value minerals

• A Land of Gold: Kolar Gold Fields

• The Sandalwood State: 73% of the aromatic wood found here

• State grows all food crops, leads in horticulture and

floriculture

• Home to premier education and research institutions

• Strong focus on developing skills and employment

opportunities

Karnataka – A tradition for Innovation

Innovation has always dominated the academic, corporate and

decision making ethos of Karnataka. It has a number of firsts to its

credit and has a long tradition of public-private partnership:

• First major hydro-electric power generating station at

Shivasamudram in 1902 with the capacity of 42 megawatt.

• First aircraft producing company Hindustan Aircraft Ltd set up

base in Bangalore in 1940

• Cradle of Banking in India – seven of India’s leading banks

originated from Karnataka

• First to introduce private sector in higher education – highest

number of medical colleges in the country

• First to introduce the concept of a Software Technology Park

in India

• First State with an IT Policy and a Semiconductor Policy

• Country’s first private airport with State of the art

infrastructure in India at Bangalore

• Leader in biotechnology – home to 187 out of India’s 340

biotech firms

• Yeshaswini Health insurance scheme – Karnataka has become

a role model State with the introduction of this scheme. Any

farmer who is a member of co-operative society in Karnataka

can get the necessary surgical treatment by becoming a

member of the scheme.

Karnataka has always been a proactive State, which has today

made it into the most sought after destination for cutting edge

technology and manufacturing in the country. One of the main

advantages for investors in this State is the availability of a large

pool of technical and skilled manpower and the presence of

internationally renowned research institutions in every field. As

the home to many premier institutions (detailed in Section 9 of

this white paper), Karnataka is well known as the ‘Gateway of

Knowledge’, it is the Knowledge Hub of Asia.

Karnataka – An enduring strong economy

The State has witnessed economic growth over time, compared

to other States in the country. Indeed, there are challenges in

human development and infrastructure that are still to be met

with, especially in health and education, along with the

infrastructure requirements. What has been the enduring fact in

all this, however, is the positive stance of the government towards

partnering with the private sector to achieve these goals.

Karnataka’s Vision 2020 for growth is in synch with the quest.

Karnataka’s growing economy

• GSDP of Karnataka 2008-09: Rs. 1,81,338 crore

(US$ 40 billion)

• Average annual growth of more than seven percent since

1999-2000

• Per capita income Rs. 40,309 (US$ 880)

The sectoral composition of State income has changed over the

years as the primary sector has reduced in importance, giving

way to the tertiary sector. While this is a natural trend in

economic growth, it needs to be accompanied by a

corresponding shift in employment shares to enable higher levels

of income across all sections. The Karnataka Government Vision

2020 seeks to remove the sectoral and regional disparities by

encouraging diversified economic activity in all regions of the

State as well as through raising skills in the labour force through

vocational training and other institutes.

Sectoral Performance of Karnataka Economy

The primary sector in Karnataka has grown at 3.6% over the past

eight years. The State government has launched the Karnataka

Agriculture Mission to give the necessary boost to the agriculture

sector. Other agriculture oriented programs such as Farm

Mechanization scheme, Rashtriya Krishi Vikasa Yojana (RKVY) and

major irrigation projects are being undertaken to revive the

growth of primary sector.

The strong and vibrant industrial sector of Karnataka has been

the key growth driver for Karnataka economy. Buoyed by strong

fundamentals, industry friendly policies in the State and

infrastructure support, the secondary sector has been growing at

an average rate of 11 per cent during the past eight years.

The mining sector in this mineral rich State has clocked an

average annual rate of 14%. while construction activity has grown

at 13%. The employment oriented manufacturing sector

registered 11% growth rate during the 2000s, pushing the job

creation in the State.

The last decade has seen the emergence of Karnataka as the hub

of information technology which has rendered impetus to the

growth of overall services in the State. Karnataka is the leading

exporter of software in India. In the year 2009-10, IT exports

from Karnataka amounted to Rs. 70,375 crore, the highest in the

country, clocking a growth rate of 28%.

The services sector grew by more than 9% rate over the last

eight years in the State. Continuing with the same pace of growth

for the next ten years, Karnataka is set to become the global

services hub of India by 2020. Within the services sector, financial

services grew by 14 % annually and transport and

communication sector rose at 13% per annum. Trade, hotels and

restaurants have grown by 9.8% and real estate sector witnessed

growth in the range of 8-9%.

Infrastructure development: The presence of robust

infrastructure in a region is a prerequisite for sustained economic

growth. The State government has apportioned resources to

build adequate physical infrastructure comprising of road

network, transport and communication facilities and energy

availability to households. The status of infrastructure availability in

Karnataka is discussed below.

Roads: The road length of Karnataka has been growing at 7%

rate annually over the period 2003-04 to 2008-09. The density of

roads as measured by the proportion of length of roads to the

total area of the State is higher for Karnataka as compared to all

India average.

Transportation: The transportation system in Karnataka is well

developed comprising of road transport, railways and aviation

sector. The density of motor vehicles in Karnataka is higher than

the national average.

The total length of railway lines is relatively lower that other

industrial states. However, plans for expansion of rail network are

set to raise the access across the State within the next five years.

On completion of the ongoing projects, Karnataka will have

better rail connectivity and penetration, see table below for

comparison of rail network before and after completion of

ongoing projects

Karnataka being a global destination for business and commerce,

the passengers movement through air transport is one among

the highest in the country.

Households with electricity and LPG – Electricity and cooking

gas are basic utilities that indicate household access to

infrastructure and a better standard of living. The State performs

better than Maharashtra and Gujarat, but is a tad lower than

other southern States. However the State has to make significant

improvement in making the LPG connections available to the

households. With only 40% of households having LPG

connections, fulfilling the rest is a challenge.

Finances of Karnataka Government

Fiscal stimulus measures to mitigate the slowdown have led to a

rise in the fiscal deficit of the Karnataka State. According to the

revised estimates for the financial year 2008-09, the gross fiscal

deficit of the State was 3.5 of the State’s GSDP. This is highest

amongst all the industrially progressive States. The situation has

ameliorated to a certain degree. According to the Karnataka

State Budget for 2010-11, the fiscal deficit is estimated to be 2.96

% on account of increased revenue as well as capital inflows in

the State.

Karnataka has recorded maximum increase in the State

development expenditure in the year 2009-10. Yet, the State has

one of the lowest spending on development activities such as

health, education, housing, agriculture, rural development, labour

welfare etc.

Gross Fiscal Deficit as % of Gross State Domestic Product

States / Year 2006-07 2007-08 2008-09 (RE)

Andhra Pradesh 2.10 2.96 2.80

Tamil Nadu 1.51 2.55 2.70

Karnataka 2.49 2.83 3.50

Maharashtra 2.27 1.82 2.30

Gujarat 2.22 1.76 2.90

Source : State Finances, Reserve Bank of India

Note : RE -Revised Estimates , BE- Budgeted Estimate

Human Development in Karnataka

Economic progress of a region should have a positive impact on

the standard of living and State of human development which are

gauged by general health and education indicators. In general,

Karnataka performs better on these indicators in comparison to

national average situation and other States with a similar

economic profile. Social sector development has always been a

thrust of Karnataka government’s policies. Even as an average

Karnataka citizen lives a better life in terms of availability of health

and education facilities, significant efforts are required to further

improve the living conditions of the poor and the marginalized.

Health

The basic health indicators in Karnataka such as birth rate, death

rate, life expectancy suggest better development of health sector

in Karnataka as compared to average rate in India and other

States such as Maharashtra and Gujarat. However, the State

needs to put more emphasis on improvement in the healthcare

institutional mechanisms to bridge the gaps in delivery systems.

Karnataka has one of the lowest birth rate and death rate among

the industrially prosperous States and fares well when compared

to the national average. Other indicators like lower fertility rate,

trained birth assistance also provide a better picture of living

conditions and status for the women in Karnataka. The State

government has initiated the ‘Taayi Bhagya’ scheme aimed at safe

delivery, nutrition and diet and antenatal check up and

institutional delivery for women in BPL family.

Only 55 % of children under the age group 12 to 35 months are

fully immunized. While this performance is better than the all

India average of child immunization at 49.7 %, States like Tamil

Nadu have been able to fully immunize 81 % of the children.

Health status of Karnataka and other states

The status of health infrastructure in Karnataka as determined by

the presence of adequate number of hospitals in the State

renders a positive positioning of the State at national level and at

inter-state comparison as well. The number of rural and urban

hospitals in Karnataka is far more than the peer States. An

average government hospital in Karnataka serves 64,518 people

in a year as compared to more than a lakh people served at India

level. The corresponding figure for other States is even higher.

Karnataka also has a well developed primary healthcare system

for rural areas. Established and maintained by the State

government, Primary Health Centres and their sub-centres are

the first referral point for rural patients. Karnataka has the highest

number of Primary Health Centres per lakh rural population

among the progressive States.

Education

The literacy rate in Karnataka is higher than the national average

as per the Census 2001. However Maharashtra, Tamil Nadu and

Gujarat have higher literacy rates. The State government spends

around 15 % of its total disbursements on education which is

higher than all India average as well as that of Andhra Pradesh

and Gujarat.

Education Status of Karnataka and other States

Literacy rates does not indicate the quality of education which

becomes clearer through factors such as proportion of trained

teachers and number of students being allocated to a teacher on

an average. Karnataka is one of the few States in India to have

100% trained teachers in higher secondary, middle as well as post

basic schools. However, in terms of pupil teacher ratio, Karnataka

trails behind other industrialised states as well as national average

rate. In order to improve the State of primary education, the

government has increased recruitment of teachers in government

as well as private schools.

Development of economic and social landscape should be in

alliance with the economic and industrial growth of the region.

The benefits of the economic growth need to percolate to the

social sector to ensure balanced human development in the

State. The growing economy has also put pressure on demand

for physical infrastructure, and the government has tied up with

the private sector for building, financing, execution of

infrastructure projects of huge size under the Public Private

Partnership arrangements, the details of these projects are

discussed in Sections 7 and 8.

The Karnataka government fully understands the challenges

ahead to raise the State to greater heights and is working

towards meeting a set of targets by 2020 through a

comprehensive and coordinated strategy. The government is fully

committed to orienting its policy measures in an effective manner

to achieve these goals as set out in the table below.

2. Karnataka - A leading investment destination

Karnataka’s performance in attracting investments, both domestic

and FDI, highlight the State’s robust financial network.

Karnataka, India’s eighth largest economy, accounts for around 5%

of its national income. The State has been ranked first by the

World Bank for its investment climate in a study that has analysed

16 States using 46 investment parameters (see accompanying

image from the report ). The fact that one new MNC invests in

the State every week is testimony that Karnataka is the leading

investment destination in the country.

The reasons that make Karnataka an attractive destination for

investors can be summarised in brief here, as details follow in

separate sections later.

• Excellent infrastructure

• Readily available land in a land bank

• Highly skilled technical manpower base

• Large number of technical and research institutes

• Techonology savvy work force with proficiency in English

• Cultural diversity and cosmopolitan urban centres

• Advanced healthcare facilities

• Connectivity through air, rail, sea and road network integrated

with the rest of the world

• A State with effective law and order

• Liberalised economy with single window clearance for

investors

• Excellent logistics support

Home to 700 MNCs and 87 Fortune 500 companies, Karnataka

is a State that is already well known on the global investment

space. In fact, the term ‘Bengalored’ used to denote jobs moving

from the US to India due to the presence of the first outsourcing

centres in the nineties. Since then, however, the city has moved

up the value ladder to become the first stop destination for

cutting edge research in high technology areas like aerospace

engineering design, biotechnology, nanotechnology etc. With

more than 5300 patents filed from centres in this city, Bangalore

now forms the fourth largest technology cluster in the world.

In terms of FDI inflows, Bangalore centre which accounts for FDI

investment in Karnataka, ranks third in the country after Mumbai,

India’s financial capital and Delhi, the national capital. Contributing

to 6.35% of the total FDI flows to India over the period April

2000 till December 2009, Bangalore has brought in $ 6.7 billion,

an amount higher than the Ahmedabad, Chennai and Hyderabad

centres.

In terms of foreign technical transfer approvals, over the period

2001-2009, Karnataka stands fourth in the country, accounting for

a 6.51% share. Maharashtra with Mumbai as the country’s

financial and business capital leads in this regard, while Tamil Nadu

and Gujarat rank marginally ahead of Karnataka in foreign

technical collaborations.

Even with respect to domestic investment, the State is amongst

the leading destinations. Amongst the 35 States and union

territories, it ranks sixth in India in terms of the number of

Industrial Enterpreneur Memorandums filed during the period

April 1991 till January 2010 , an indicator of the investment

intentions in the State. From January 2006 till January 2010, a

total of 927 investment proposals were approved in the State

amounting to more than Rs. 4.5 billion – this comprises 9.1% of

the total investment proposed in the country during this period.

Karnataka has an investor friendly supportive government. The

Karnataka Udyog Mitra, set up more than a decade ago, works as

single contact point for all investors - from receiving a proposal

to ensuring its implementation KUM is actively working with the

investors at all stages. The State Level Single Window Clearance

Committee and the State High Level Clearance Committee (for

investments greater than Rs. 50 crore) have been working to

clear proposals in a speedy manner.

The vibrant, growing economy also generates considerable

resources internally. The State has a wide network of banks, the

number of branches has been growing to cross 5,600 in 2008. All

major domestic and foreign banks have their branches in the

State, to tap the funds flows and credit needs of the economy.

RBI’s - Regional Office2

State covered Amount (Rs. in crores)

FDI Inflows US$ in million

Percentage with FDI inflows (in rupee terms)

(from April 2000 to December 2009)

Mumbai Maharashtra, Dadra & Nagar Haveli, Daman & Diu

168,442.62 37,803.12 35.89

Delhi Delhi, Part of UP and Part of Haryana

91,077.15 20,144.47 19.4

Bengaluru Karnataka 29,789.25 6,736.95 6.35

Ahmedabad Gujarat 27,927.48 6,328.95 5.95

Chennai Tamil Nadu, Pondicherry

23,819.42 5,299.34 5.07

Hyderabad Andhra Pradesh

20,043.49 4,531.91 4.27

The amount of deposits in scheduled commercial banks in the

State exceeds that in other States like Tamil Nadu, Gujarat and

Andhra Pradesh, standing at Rs. 209,609 in March 2008. Bank

credit that had been growing faster than the deposits during the

boom years, slowed its rapid rise in 2008 (see graph) and stood

at Rs. 197, 630 lakh in March 2008.

Investment from domestic and foreign sources is set to rise

rapidly in 2010-11 as the State government has put in a series of

measures to smooth the progress of implementation of projects.

One of the most important steps taken has been the creation of

a 50,000 acre land bank in various locations across the State that

will ease the path of investors who are struggling with land

acquisition problems in other States. In addition, the boost to

infrastructure is another part of the government’s comprehensive

and coordinated strategy to facilitate investment in the State.

Karnataka, already on the global radar for its positive investment

climate, will maintain its lead compared to other States as the

No.1 investment destination in the country.

Karnataka: A thriving industrial State

The State’s industrial profile, in terms of growth in production,

investment approvals et al is well-charted, from manufacturing

units in various sectors, to district-wise distribution of industrial

activity.

Karnataka is one of India’s leading industrial States, contributing

almost 8% to the national manufacturing income. It has a long

tradition for supporting industrial entrepreneurs and encouraging

innovation and research and its strong and vibrant industrial base

combines the intrinsic strengths of large industrial public sector

undertakings, large and medium privately owned industries and a

wide range of small-scale units. While on one hand, the State is

the aerospace hub of the country operating on cutting edge

engineering and IT capabilities, on the other, its garment sector

dominated by small units contributes 20% to the national

garment output.

Karnataka’s industrial sector, as measured by the Index of

Industrial Production IIP, rose by 4.72% in 2008-09, lower than the

previous two years due to the global slowdown. The IIP

comprises mining, manufacturing and electricity production and

these three sectors grew at 7.4%, 5.51% and 0.08% respectively.

The low growth in electricity generation has been a cause for

concern, given the demand stemming from the rapid growing

economy. The State government has therefore planned power

projects that will enable the State to be energy sufficient by

2013-14.

Looking at the sub-sectors in the IIP, 8 of the 22 sub-sectors

recorded high growth of more than 20% in production in

2008-09, a year in which the economy had been hit by the global

slowdown:

Manufacture of Publishing and Printing Materials, Manufacture of

Furniture, Manufacture of Leather Goods, Manufacture of

Rubber & Plastic Products, Manufacture of Office, Accounting &

Computing Machinery, Manufacture of Coke, Refined Petroleum

Products & Nuclear fuel, Manufacture of Paper & Paper Products,

Manufacture of Food Products & Beverages.

Investment intentions slowed down considerably in 2008-09

(see tables below) as the global financial crisis followed by the

recession around the world hit investment plans. However, by

March 2010, there were clear signals of a firm recovery in the

Indian economy and capital investment plans shelved during the

crisis have since picked up steam once again. Karnataka will

therefore see a revival in investment in the current year 2010-11

as the basic fundamental strengths of the economy – rich

resources, progressive policies, stable State, supportive ecosystem

for entrepreneurship and investment- continue to stay in place.

The compound annual growth rate of investment proposals

above the value of Rs. 3 crore has been 25% over the period

2001-02 to 2007-08 and with the renewed vigour of the State

policies and support, this growth is set to rise further in the next

five years.

According to estimates based on NSSO data, the Indian Industrial

Skyline shows that the sector registering the highest value of

production is refined petroleum products, followed by basic iron

and steel. This reflects the presence of the Mangalore Refinery

and Petrochemcials Ltd. in Mangalore, which has a design capacity

to process 9.69 million metric tonnes per annum. It is the only

Refinery in India to have 2 Hydrocrackers producing Premium

Diesel (High Cetane) and also the only Refinery in India to have

2 CCRs producing Unleaded Petrol of High Octane. The State is

the third largest producer of steel in the country, as it has the

second largest iron ore reserves in India. Karnataka has the

capacity to host a manufacturing steel base for more than 100

Million Tons capacity per annum and is gearing up to provide all

the infrastructure support to enable full utilisation of its

resources.

The sector producing the third highest value of production

includes firms involved in manufacturing meat, fish, fruits,

vegetables, oils and fats & other food products. With fertile soil

and six agro climatic zones the State has high volumes and variety

of produce, while marine produce is abundant along the long

coastline. Karnataka has large resources that support the food

processing industry - almost 6% of India’s livestock, 12% of India’s

fruits, 8% of vegetables, 14% of groundnut etc. Karnataka has the

potential to merge as the largest hub for food processing in the

country.

In terms of the number of manufacturing units, the largest sector

involves tobacco products, followed by wearing apparel(except

for fur) and manufacturing of meat, fish, fruits, vegetables, oils and

fats and other food products. The State is the second largest

tobacco producer in the country, contributes 20% to India’s

apparel industry and 8% of India’s garment exports. All these

sectors have a large presence of small scale firms; in fact textiles

and food products have the largest number of MSME units in the

State.

The table below detailing the industry profile of the State shows

the wide range of products being manufactured in Karnataka.

While industrial activity is spread out across all districts of the

State, the top ranking districts are Dakshin Kannada, Bangalore,

Mysore, Bangalore Rural, Belgaum and Bellary. These six districts

account for more than three-fourths of the total value of

industrial production as the large, capital intensive industries are

based in these districts. Thus, in terms of the number of

manufacturing units, activity is less concentrated and the top five

districts account for just 40% of total units. Looking at the

employment generated, the top six districts contribute to 50% of

the total manufacturing employment in the State : Bangalore,

Dakshina Kannada, Shimoga, Bangalore Rural, Chikmagalur, Tumkur.

This reflects on the smaller more labour intensive units in districts

like Shimoga, Chikmaglur and Tumkur, centres of various

agro-based industries, auto component units etc.

The Government of Karnataka data estimate that Karnataka has a

strong base of over 3.89 lakh registered units in Small Scale

Industries with investments of about Rs 100 billion, employing

more than 22 lakh persons. Despite the global slowdown in 2008,

MSME investment rose by 8.4% in 2009-10. While textiles and

apparels form the largest product segment, food products,

articles of wood and cork, maintenance and repair of vehicles

and motorcycles and fabricated metal products form the next

four largest segments in Karnataka, complementing the

well-diversified industrial landscape in the State. The very fact that

global procurement centres are located in Bangalore is indicative

of the concentration, quality and strength of Karnataka

endowments. There are 20 MSME Industrial Clusters that focus

on various products – food products, leather goods, light

engineering, power looms, dal and oil mills, garments, machine

tools etc. There are 10 handloom clusters located in Bagalkote,

Chitradurga, Dharwak, Udupi, Koppal, Tumkur, Mysore, Bangalore,

Kolar, Gulbarga and Belgaum districts and more than 140

handicraft MSME clusters

Key industrial clusters in Karnataka

• IT/ITeS cluster in Electronic City and Whitefield, Bangalore

• Biotech park/cluster in Electronic City, Bangalore

• Machine tool cluster at Peenya industrial eState

• Textile cluster at Doddaballapur

• Foundry cluster at Belgaum

• Industrial valve cluster at Hubli-Dharwad,

• Auto component cluster at Shimoga,

• Coir clusters at Hassan

• Coffee production & processing cluster in Madekeri.

Karnataka, as mentioned earlier, is one of India’s leading industrial

States and the following table presents the relative importance of

the State in various industries, compared to the other industrial

States of the country. Compared across 10 industries, the State

performs well on each count, showing the well-diversified

industrial base.

Karnataka – A robust infrastructure

The status and proposed projects in the infrastructure in the

State: Power sector, Irrigation network, Transportation covering

roads, rail network, air and ports and SEZs growth and projects

underway, are pointers to a State ‘hungry’ to achieve milestones

in development. And there’s more – From urban development

to the Development Corridor Initiative.

Karnataka aims to double investment in infrastructure to meet

the needs of a fast growing economy.

Private sector partnership is being actively sought by an

investor-friendly government – more than 200 projects worth Rs.

135,000 crore are in various stages of implementation.

Power: The State has a long and enviable history in power

generation – Asia’s first major hydro-electric generating station

was set up at Sivasamudram as early as 1902 for commercial

operation, at a time when technology was still in its infancy. The

longest transmission line at then highest voltage in the world, was

constructed to meet the power needs of mining operations at

Kolar Gold Fields. Karnataka has maintained its tradition of being

at the forefront of technology and the Government of Karnataka

has always emphasized development of renewable energy, with

Karnataka Renewable Energy Development Corporation Ltd

(KREDL) as its nodal agency championing the green agenda in

the energy sector. The three pronged strategy: Energy Sufficiency,

Energy Efficiency and Green Clean Power – drive the power

policy of the State. Karnataka, a pioneer in wind power projects,

stands fourth in the country in wind energy generation. One of

the first States to undertake significant reforms in the power

sector in the nineties, Karnataka is now pushing for innovative

high technology ways to generate electricity efficiently – the

Electronic City in Bangalore is India’s first pilot project in Smart

Grid, leveraging Karnataka’s IT capabilities to the hilt. The State’s

Semiconductor Policy 2010 is one more step that reflects on

Karnataka’s commitment to new technology driven efficient

energy solutions in the State.

In accordance with the Industrial Policy’s Suvarna Karnataka

Corridor Development Initiative, power generation zones are

being set up in Raichur, Bellary, Bijapur and Chitradurga districts,

while sugar and co-gen zones proposed in Bidar, Belgaum,

Bagalkot, Shimoga and Mandya districts will aim to effectively tap

the natural resources in these areas to the maximum. In order to

address the problem of energy shortage, on going projects

planned are slated to bring about energy sufficiency by 2013-14

with a capacity addition of 23,523 MWs in the next four years.

An additional 4200MW is planned through tapping

non-conventional energy sources. The State’s proactive and

investor friendly government is working in tandem with the

private sector to ensure that Karnataka’s growing energy

requirements are met with ease and efficiency. Karnataka today is

a power deficit State. At peak hours in the summer months, the

power shortage ranges from 1,000 MW to 1,500 MW.

Energy Shortage

In order to facilitate private investment in development of

conventional energy resources, Power Company of Karnataka

Limited (PCKL) was formed in the year 2007. PCKL facilitates the

entry of private players in power projects in the State and also

take up Energy Trading on behalf of all Distribution Companies.

The main source of energy in Karnataka is thermal with the two

main power plants at Raichur and Bellary. Hydel power projects

on the rivers of Sharavathi, Kalinadi, Varahi, Ghataprabha, Almatti

etc. form the second most important source, contributing 37% to

total power generation in the State. The State has also been

successful in harnessing wind energy, that makes up 6% of power

generation. Kaiga Generating Station in Uttar Kannada district is

one of India’s six atomic power plants; in operation since 2000,

the plant has four units and in November 2009, approval was

granted by National Power Corporation for expansion in the

Second Phase that will generate 1400 MW of power when

completed.

TRANSMISSION: The power requirement of the State are met

through drawing power from the grid and is handled entirely by

Karnataka Power Transmission Corporation Limited (KPTCL)

which transmits this power from 400 KV and below up to 66 KV.

Beyond 66 KV distribution companies handle the transmitted

power and distribute to the consumers. Karnataka has the

privilege of first transmission line of 78 KV in India from

Shivanasamudram generating station to Kolar Gold Fields (KGF)

in the year 1902 and has built up a transmission network of

36,492 Ckms with 874 stations.

DISTRIBUTION: Karnataka was the first State in the country to

separate distribution from transmission and 4 distribution

companies namely BESCOM, MESCOM, HESCOM & MESCOM

were started and later CESCO was started. The power

transmitted to the distribution companies are distributed to 1.7

crore consumers across various categories.

The distribution companies have 324 33 kV sub-stations, 2,00,452

kms HT lines, 4,47,013 km of LT lines and 3,24,757 distribution

transformers. Over the years, Karnataka has built up an efficient

and robust distribution in the State which is considered one of

the best in the country.

Non-conventional energy sources are also being tapped for

optimal power generation in the State, an additional 42,00MW is

planned through these sources.

During 2008-09 a number of initiatives were taken up by the

government to address the severe power shortage resulting from

inadequate monsoon

• MOU was signed with Chhattisgarh State for putting up 1200

MW planned at the pit-head in Zanzgir, Champa District and

a 1600 MWs plant at the pit-head in Jangir,Champa District.

• Work started on 400 MW hydro electric plant at Gundia.

• KPCL in joint venture with BHEL started work for 2400 MW

Coal based power plant at Yermarus & Edlapur.

• 3 MW Solar power projects each at Kolar, Belgaum and

Raichur were undertaken by KPCL.

• Commissioning of 500 MW of Bellary Thermal Power Station

(BTPS) unit-I.

• 230 MW of Varahi Hydro Electric Power Plant Commissioned.

• Renovation and modernization Unit IV of Nagazari Hydro

power house which has started producing 15 MWs.

• Agreement with NTPC was signed to put up 4000 MW Ultra

mega power project at Kudgi and land acquisition process

initiated.

• Power Company of Karnataka Limited got the approval for

setting up plant through private investors at Jewargi in

Gulbarga District for 1320 MW and process of land

acquisition started.

• Government land was allotted in Ghataprabha of Belgaum

District for establishing 1320 MW power plant through

Private Investment.

• PCKL invited bids for 2500 MW of power plant for

procurement of energy on long term basis through

competitive bidding route (Case-I) under Merchant power

plants.

• It also invited bids for 5 MW power plants at Taluk level for

decentralised power production in each taluk.

• Wind power project of 500 MW also put up by NTPC in

collaboration with KPCL under joint venture.

• Power was purchased from IPPs and through energy

exchange.

• All the distribution companies went for roistering of power

supply and supplied a minimum of 6 hours of 3 phase and 6

hours of single phase to rural areas during this period.

• From the non-conventional energy sources 422 MW capacity

was also added.

The State’s proactive investor-friendly policies have attracted

many investors in the recent past as well:

• Two gas pipeline projects of Relogistics Infrastructure and Gas

Authority of India Ltd have got in-principle approval from

Karnataka State government.

• Reliance (Relogistics) will lay 455-km of gas pipeline through

Chennai-Bangalore-Mangalore at a cost of Rs 6,796 crore,

GAIL will lay 746-kms of gas pipeline from Dhabol to Belgaum

and Bangalore at a cost of Rs 4,544 crore. These pipelines are

expected to help the industries as well as the State's

proposed gas-based power plants along the pipeline route.

• Oil refinery project at Rs 8,655 crore in Dakshina Kannada is

mooted by Mangalore Refinery and Petrochemicals Ltd,

• Solar energy producer Azure Power plans to start a solar

plant each in Kolar and Bagalkot and add 12 MW to the grid

in 18 months. Azure would invest between Rs 200 crore and

Rs 225 crore in both the plants.

• Karnataka Power Corporation may build a 2.5 million metric

ton-a-year liquefied natural gas import terminal at Karwar

port in Karnataka to help fuel a new plant. The terminal will

supply gas to the planned Tadadi plant, which is expected to

have a capacity of 2,100 megawatts that will later be doubled

to 4,200 megawatts.

• In June 2009, the government also approved two captive

power plants - M/s. Athani Farmers Sugar Factory Ltd. in

Belgaum for a 24-MW co-gen power plant and M/s.

SriKumarswamy Mineral Exports in Bellary District for a 12

MW captive power plant.

• Shree Renuka Infra Projects has been given approval to set up

a thermal power plant at an investment of Rs 5,500 crore

• Engineering and construction major Larsen & Toubro (L&T)

plans to set up a 1,600 MW power plant in Karnataka and has

bid under the PPP model along with KPCL for a coal-based

power plant involving an investment of Rs 10,000 crore.

• Bharat Heavy Electricals has been contracted by KPCL to set

up an eco-friendly grid-interactive solar power plant of 3MW

capacity, on turnkey basis. The company will invest Rs. 420

million in the solar photovoltaic power plant at Yapalaniddi

village in Raichur district. The scope of work in the contract

envisages engineering, manufacture, supply, erection and

commissioning of the equipment, besides operation and

maintenance of the plant for three years thereafter. The plant

will be completed in a schedule of eight months .

Under the Annual Plan 2010-11, details of the proposed power

projects are as follows:

• Raichur Thermal Power Station - KPCL has taken up the new

unit of 250 MW capacity plant for implementation by utilising

the infrastructure facilities available in RTPS at a project cost

of Rs. 1046 crore. The annual energy generation would be

1752 MU.

• Bellary Thermal Power Station Unit – II - KPCL is adding

another unit of 500 MW capacity at BTPS by utilizing the

infrastructure facilities available in BTPS at a cost of Rs. 2261

crore. The gross energy generation would be 3504 MU per

year.

• Grid Connected Solar Photo Voltaic Power Plants- KPCL is

establishing Grid connected Solar Photo Voltaic power plants

in three districts viz. Kolar, Raichur and Belgaum each of 3

MW capacity.

• Gundia Hydel Scheme (400 MW) - The proposed Gundia

Hydel scheme with an ultimate installed capacity of 400 MW

is located in Hassan / Dakshina Kannada District. It would

generate 1002 MU of energy per annum. The cost of the

project is Rs.1333.00 crore

• Yeramarus (2 x 800 MW) & Edlapur (1 x 800 MW)Thermal

Power Stations

• Bellary Thermal Power Station, Unit-3, (1 x 500 MW)

• Gas Based Tadadi Combined Cycle Power Plant, (2100 MW)

• Shivanasamudra Seasonal Scheme : (345 MW)

• Additional Unit at Munirabad Hydro Power Station: (10 MW)

• Wind energy project : (500 MW)

Irrigation: About 28.3% of Karnataka’s net sown area is served by

irrigation facilities, mainly tube wells and canals. While 31.32 lakh

hectares were irrigated in 2007-08, the cumulative irrigation

potential created under major, medium and minor irrigation (only

surface water) up to the end of 2009-10 is 34.84 lakh hectares, as

against an estimated total irrigation potential of 45 lakh hectares

comprising of 35 lakh hectares under major and medium

irrigation and 10 lakh hectares under minor irrigation projects. So

far 47 Major and medium projects which have been completed

have created irrigation potential of 8.96 lakh hectares. 25 major

and 53 medium irrigation projects which are under

implementation, have so far created 15.32 lakh hectares of

irrigation potential. An additional irrigation potential of 0.65 lakh

hectares is anticipated during 2010-11 through major and

medium irrigation projects, consisting of 0.48 lakh hectares under

plan projects and 0.17 lakh hectares under projects pending

approval. Through the Upper Krishna project alone, a potential of

0.10 lakh hectares is anticipated in 2009-10. Under minor

irrigation (surface water), the additional potential, which will be

created this year, is 0.10 lakh hectares, leading to a total of 0.75

lakh hectares from the three categories .

The Minor Irrigation Department has established the Karnataka

Jala Samvardhana Yojna Sangha for monitoring and speedy

implementation of minor irrigation works with aid from the

World Bank. Under this project, the department will rejuvenate

2000 tanks in nine districts namely, Kolar, Tumkur, Bidar, Bellary,

Chitradurga, Bagalkote, Haveri, Raichur and Koppal. Water Users

Co-operative Societies have been established in the command

areas and they are empowered to collect water rates.

During 2010-11, 14 major and medium irrigation projects

including Upper Krishna Project Stage-I and II, Karanja,

Bennethora, Amarja, Ghataprabha 3rd Stage, and

Ubrani-Amrutapura would be completed and 56,000 hectares

of land (more than 1.35 lakh acres) would be provided

with additional irrigation. Besides, field channels would be

constructed in 2 lakh hectares of land. In 2010-11, Rs. 4,256

crore would be provided for major and medium irrigation

projects including Accelerated Irrigation Benefit Programmes.

Transportation

Road Network: Karnataka is a State well connected to all parts

of India through 14 National Highways (NH), accounting for

about six per cent of total NH network in India. District centres

are connected to each other through 114 State Highways (SH)

and the total road network of NH, SH and district roads is about

52,000 Kms.

The Government intends to upgrade all the State Highways from

single lane roads to double lane roads in the coming three years,

a plan that calls for total expenditure of Rs. 3000 crore.

Factors such as high growth in traffic, movement of High Load

Vehicles, need for increased connectivity with interiors as well as

other States, risk of road accidents, high transit time due to traffic

jams etc. have precipitated the need for high investment in road

development. The Task Force set up by the Karnataka government

in 2000 had recommended higher level of private sector

participation in construction of new road links, bypasses and

reconstruction of bridges. The ‘Policy on Road Development’

formulated in 1998 has been replaced by a new policy in 2009

which stresses the need for capacity building, institutional

strengthening and facilitating public private partnerships.

Under the present programmes, development of 66,000 km of

core roads has been planned in three phases:

• Phase I - 10,000 kms that are organised in 52 packages

• Phase II - 40,000 kms

• Phase III - 16,000 kms

Further, 12600 Km village roads have been earmarked for

development.

Under the policy, the State Highways Authority has development

and planning rights over a length of 1 km on each side for 2L

carriageway, 2 kms on each side for 4L carriageway and 3 km on

each side for 6L carriageway. The first rights of development

should be given to the developer at the rate of one acre for

every 5 kms to provide for way side amenities. In addition

• A corpus fund of Rs. 500 crore to KRDCL is being proposed

• Multilateral Agencies will be tapped for funding

• Banks being roped in to fund the investment.

• KRDCL will work as a partner with a concessionaire for

66,000 km Core Road Network.

• KPWD, KRDCL, IDD will provide all necessary support for

implementation of project.

• An amount of Rs. 50 crore will be provided to make a

four-lane road between the twin cities of Hubli -Dharwar.

PPP in road sector development - Public Private Partnership

models such as ‘Build-Operate-Transfer‘ (Tumkur-Nelmangala,

Elevated Expressway to E-City) and Annuity projects (Bangalore-

Maddur) are being proposed for road development. Karnataka

government is also planning to open the work of rural roads to

private sector .

Ports: Karnataka has a coastline of around 300 kms between

Karwar (at the north) and Mangalore (at the south) flanked by

Uttara Kannada and Dakshina Kannada districts, with favourable

and strategic port locations. The entire coastal belt as well as the

adjacent districts are rich with mineral and natural resources and

hence offer very good scope for industrial investment. This belt is

well connected by National Highway and the Konkan Railway

broad gauge line, both running parallel to the coastline.

The 10 minor ports of the State are Karwar, Belekeri, Tadri,

Honnavar, Bhatkal, Kundapur, Hangarkatta, Malpe, Padubidri and

Old Mangalore. Out of these ten ports, Karwar is the only all

weather port while the other nine are the reverine anchorage

lighterage ports.

The Karwar port being one of the best natural harbors, is being

upgraded under Port Development Project and on its

completion will offer better and increased berthing and docking

facilities to large sea faring vessels.

Karnataka Port Policy aims at the development of port

infrastructure and facilities creation through private investment

which would in turn boost the industrialization and support

maritime related industries. While the policy lays down the

privatization programme through BOOST model and provides

full freedom for fixing and revising tariffs, the Government will

undertake acquisition and allotment of land and provide package

of incentives and concessions on case to case basis.

While the traffic handled at Karnataka ports declined in 2008-09

due to the global slowdown, the economic recovery in 2010 has

brought back the urgent need to upgrade the capacities at ports

in the State.

Tadadi seaport project – An all-weather multi-purpose port is

proposed at Tadadi in Uttara Kannada district on a public-private

partnership model. About 1,400 acres of land have been

earmarked for the Tadadi Port project of the 1,820 acres available

with the Government. The port is slated to have a design capacity

of 34.25 million tonnes (MT) per annum. KSIIDC is the nodal

agency for the implementation of the project and the project is

expected to cost Rs. 3,000 crore.

Air Transport

Bangalore and Mangalore are the key airports in the State.

Presently, international flights from Mangalore International

Airport operate to countries located in Middle East, while the

main airport, the Bangalore International Airport, is well

connected to domestic and global destinations. The Bangalore

International Airport (BIAL) developed under a Public Private

Partnership framework at Devanahalli, in the outskirts of

Bangalore started operations in May 2008. A State-of-the-art

international airport, BIAL is the first airport to be built in the

country on a PPP mode and has been a resounding success.

Major ports

New Mangalore Port

Karwar Port

(in ‘000 tonnes)

Name of the Port

2005-06 2006-07 2007-08 2008-09 2009-10 (upto Sept. 2009)

Karwar Port 2477.908 2383.2 2715.76 2956.081 828.641

Belekeri Port 1335.939 4054.61 6084.98 1908.474 1151.353

Malpe Port 16.031 16.228 14.281 6 404

Mangalore (Old) Port

82.762 119.05 75.617 88.036 13.463

Total 3912.64 6573.09 8890.63 4958.591 1993.861

Source: Karnataka Ports & Inland Water Transport

The Bangalore Airport has been handling an increasing number

of aircraft, passengers and freight, as economic activity has raised

demands for higher traffic.

Minor Airports/Low Cost Airports: New minor airports

proposed at Hassan, Mysore and Gulbarga are at various stages

of approvals/ completion. Government and private sector

companies have proposals for low cost airports costing about

US$4.8 million per airport at multiple locations in State. The

government plans to develop 10 airports, 13 airstrips and 28

heliports in the State, covering the entire State with quick access

to air transport.

The status update on Minor Airports in Karnataka is as follows:

Mysore Airport: 175 acres of land in Mandakalli near Mysore has

been handed over to AAI for revival and expansion, the MOU

was signed in 2005 between the Airport Authority of India /

Government of India and Government of Karnataka. While

addditional land is being acquired for shifting of National highway,

construction of the airport is under progress.

Mangalore Airport: 187 acres of land has been handed over to

AAI for expansion and development, up gradation work is under

progress and the government is committed to acquiring

additional land for extension of the runway and construction of

approach road, if needed. A new runway for operation of AB-320

type of aircraft in all weather conditions is under construction.

Gulbarga Airport: 567 acres have been acquired near Sreenivasa

Saradagi village in Gulbarga.

Hassan Airport: 474 acres and 10.5 guntas of land have been

allotted in Bhuvanahalli village near Hassan abutting the

Bangalore-Mangalore National Highway. Land acquisition has

been completed and the Public Works Department of

Government of Karnataka has been assigned to develop this

airport on PPP basis and to seek approvals/clearances from GOI

and other statutory authorities.

Belgaum Airport: Government Order was issued in October

2006 to acquire 370 acres of additional land for expansion and

development. While the land acquisition is under progress, AAI is

upgrading the Runway,Terminal Building and Apron Taxiway.

Bijapur Airport: The Karnataka government has signed a

memorandum of understanding (MoU) with infrastructure

development company, Marg, for developing a green field airport

at Bijapur. The airport will initially cater to smaller aircraft like ATR

72 or ATR 42.

The government has already initiated steps to develop another

greenfield airport at Shimoga and upgraded Mysore airport.

Steps are also on to expand Hubli and Belgaum airports in north

Karnataka. The State government is also in talks with the Indian

Air Force to give permission to use airport at Bidar.

Railways: With the rail network of 3000 kilometers, Karnataka is

well connected with other parts of the country. Intra State rail

connectivity, especially on the key lines for passenger and freight

movements, needs to be augmented. There are extensive projects

being developed under the PPP mode in the State for the

expeditious development of key railway lines such as gauge

conversion of Hassan-Mangalore freight line, Hubli-Ankola lines etc.

K-RIDE is a Special Purpose Vehicle between Sate Government,

Railways and other investors with the objective of developing and

implementing rail infrastructure projects in Karnataka with a

private sector participation wherever found feasible / viable.

Ongoing projects: Presently 6 projects at a cost of Rs. 2029.00

Cr. (969 km) are under implementation by Railways

• Sholapur – Gadag (GC)

• Shimoga – Talaguppa Gauge Conversion Project.

• Kottur-Harihar New Railway Line

• Bangalore-Ramangaram-Mysore Railway Doubling

• Bidar-Gulbarga New Railway Line

• Munirabad-Mehboonagar New Railway Line.

• Road over Bridge / Road under Bridge (RoB/RuB)

In addition, Hassan Sakhleshwar Mangalore line gauge

conversion is under progress.

The Karnataka Budget 2009-10 also proposed the extension of

BARL Railway Network to implement a super fast train from the

city to Bangalore International Airport under PPP mode. In

addition to the projects above raising the rail network in the

State, other related projects include those in urban infrastructure:

Metro rail and mono-rail projects in Bangalore that are already

underway and the Mysore Metro Rail Project where the

preliminary feasibility has been considered.

Special Economic Zones (SEZ) are specifically delineated

duty-free enclaves for promoting exports. The SEZ Act 2005,

enunciated by the Government of India and the consequent SEZ

Rules 2006 govern the establishment of SEZs in the country. The

Karnataka State SEZ Policy 2009 has been detailed in section 10

and shows the commitment of the government to support and

facilitate setting up of SEZs in Karnataka. So far, the Board of

Approval has granted formal approval to 52 SEZ projects in the

State with investment of around Rs 29700 crore and

employment potential of about 11 lakh.

• Out of 52 SEZs, 41 are IT/ITES, 3 are B.T and 8 are Product

Specific SEZs.

• 28 SEZs have been notified and 15 are operational.

• Investment made in notified SEZs is Rs 8560 crore, which

includes Rs 2600 crore of FDI.

• Exports from the SEZ during 2007-08 totalled Rs 1673 crore

and during 2008-09 were Rs 7227 crore.

Important SEZs in the State include :

• Sector-specific SEZ for Pharma & Biotechnology at Hassan

• Sector-specific SEZ for Food Processing and Agro-based

industries at Hassan

• Sector specific textile SEZ at Hassan

• IT SEZ at Mangalore

• Coastal SEZ at Mangalore

Karnataka - Its urban infrastructure

This section examines the urbanisation scenario in the State

and presents data on the cities in Karnataka – demography,

consumer markets, employment trends etc. It highlights the

plans of the government to develop infrastructure in Tier II and

III cities and in the major cities and also briefly presents

Bangalore as the Expo-Hub of the country.

Karnataka ranks the fourth most urbanised State in India, 34 % of

the State’s population lives in urban areas. Karnataka’s urban

population is likely to grow by 35% in the next 20 years and

reach 2.8 crore in 2026 from the current 2.08 crore. The three

major cities of the State Bangalore , Mysore and Mangalore

account for over 40 per cent of its urban population:

• Bangalore, the capital and largest urban metropolis of the

State

• Mysore, emerging as an alternative destination to Bangalore in

service and tourism sectors

• Mangalore, with its ports, educational institutes, hospitals and

banks, is fast emerging as a hub in services, logistics and

manufacturing.

Bangalore stands out as the most affluent city of the State, with

14% of its population in SEC A category. Not only is the market

size of Rs. 40,008 crore ten times more than other cities in

Karnataka, the population is in tune with global standards and

consumer products. As the main economic centre of the State,

Bangalore has seen the highest employment generated compared

to other States over the decade 1991-2001. However, this has

led to a significant burden on the urban infrastructure and the

proposed projects to cater to the increased demand are detailed

in the section below.

Profile of key cities in Karnataka

City / Indicator

Population Urban Households

Annual Total Household Income

Annual Total Household Savings

(Number) (Rs. Crore)

Bengaluru 6,763,073 1,749,845 60,185 19,177

Belgaum 1,109,580 238,954 5,880 1,509

Mysore 1,075,977 253,988 7,038 2,376

Gulbarga 1,007,125 185,079 4,551 805

Mangalore 851,843 181,682 5,644 1,734

Source: City Skyline of India 2008-09, Indicus Analytics

Note: Savings and Income are for Urban Households

Bangalore, the most affluent city of Karnataka

Socio- economic SEC SEC SEC SEC

Classification A B C D & E

Bengaluru 14% 23% 30% 33%

Mysore 11% 21% 29% 48%

Mangalore 5% 20% 27% 40%

Consumer Market Size

City Market Size* Market Size Growth Rate#

Rs. crore %

Bengaluru 41,008 13

Mysore 4,662 12

Belgaum 4,371 12

Mangalore 3,910 12

Gulbarga 3,746 11

Source: City Skyline of India 2008-09, Indicus Analytics

Note: *Market Size-Total annual consumption expenditure (in Rs. crore) of all urban households. # Growth rate between annual total expenditure of urban households between 2006-07 & 2008-09

Employment Trends

Under the Suvarna Karnataka Development Corridor

Programme, industrial corridors and zones have been planned

across the State, with the objective of accelerating development

of industrial growth through infrastructure support. These

corridors will benefit many smaller urban areas by raising the

core infrastructure such as energy, road and rail linkages and

urban infrastructure. The corridor proposes to cover 11 district

headquarters and more than 20 major towns along the

highways/major roads and rail links.

Emerging Industrial Centers of Karnataka and their features:

Mangalore

• Salubrious climate, congenial environment, rich culture,

cosmopolitan lifestyle, excellent health care and education

facilities

• Located on the coast of Karnataka at a distance of 357 kms

west of Bangalore

• Connected to Bangalore, Cochin and Mumbai by National

Highways

• Connected to Bangalore, Cochin and Mumbai by broad gauge

railway.

• A Software Technological Park has been established in

Mangalore to cater to the needs of IT Industries.

• Presence of IT Giants - Infosys, Wipro.

• Coastal SEZ - ONGC with an investment of 25,000 crore

• Presence of Sector Specific IT SEZ .

• Presence of multinationals and petrochemical giants- BASF

India Ltd and Elf Gas Ltd.

• Oil transportation infrastructure - A pipeline for carrying

petroleum products from Mangalore to Bangalore.

• Presence of international quality hotels.

• International airport at a distance of 12 KM from Mangalore.

• New Mangalore port provides excellent shipping facilities

• 6 medical colleges, 4 dental colleges, 5 engineering colleges, 6

polytechnics, 70 degree colleges provide skilled manpower.

National Institute of Technology, one of the premium

institutions of the country, at Suratkal provides excellent

skilled training and research facilities.

• Agri resources - cashew, rubber, cocoa, areca nut, tobacco

grown on large scale.

Mysore

• A well-equipped export centre will be established at Mysore

for exporting industrial products

• Royal City- Salubrious climate, congenial environment, rich

culture, cosmopolitan lifestyle, excellent health care and

education facilities.

• City of palaces with great potential for heritage tourism and

wild life tourism.

• Located 135 kms south west of Bangalore connected by 4

lane express highway. Also connected by broad gauge railway

line.

• Bangalore Mysore Infrastructure Corridor project - 6 lane

highway under implementation.

• Air strip located at a distance of 7 KM from Mysore and

domestic air port under implementation.

• Nearest port – Mangalore at a distance of 265 kms

connected by rail and road. Chennai port is at a distance of

460 kms.

• 6 industrial areas with 3872 acres of developed land in the

district. Two more new industrial areas being developed

around Mysore city.

• Availability of water in plenty and quality power.

• More than 10 private SEZs under implementation.

• Availability of skilled manpower - 5 engineering colleges, 2

medical colleges, 2 dental colleges, technical institutes.

• Presence of IT giants like Infosys, Wipro, L&T etc

• Presence of Research Institutes - CFTRI,DFRL, CIPET.

• Major Industries- Vikrant Tyres, BEML, L&T, TVS, Reid and Taylor,

AT&S, Chamundeshwari Silks, Jubilant Organosys Ltd.

• Presence of Five Star Hotels, clubs, water parks, amusement

parks, getaways and other recreational facilities.

• Agri resources-Tobacco is grown on large scale

Hubli –Dharwad

• Salubrious climate, congenial environment, rich culture,

cosmopolitan lifestyle, excellent health care and education

facilities.

• Located on the Bangalore-Pune 4 lane National Highway, at a

distance of 410 kms from Bangalore and 675 Kms from

Mumbai. National Highway No 63 connects to Karwar and

Hyderabad. National Highway 218 connects to Solapur.

• Hubli airport at a distance of 10 kms from Hubli. Belgaum

airport at a distance of 50 Kms and Goa airport at a distance

of 135 kms.

• Shipping facilities - Karwar port at a distance of 140 Kms is

connected by a national highway. Goa port at a distance of

135 kms. Broad guage rail connectivity to Bangalore, Mumbai

and Hyderabad and Goa.

• Hubli has an STPI and an electronic city to cater to the needs

of electronics and IT industries.

• Education hub- Presence of Karnataka University and the

University of Agricultural sciences. 3 engineering colleges, 2

medical college, 1 dental college, 8 polytechnics, and number

of graduate and post graduate colleges provide skilled

manpower.

• Presence of industries like Kirloskar Electric, Telcon,

Murdeshwar Ceramics

• 8 Industrial Areas with 3294 acres of developed land in the

district including Growth Centre at Belur, 12 kms from

Dharwad on NH-4.

• Presence of star hotels.

• Agri Resources-Red chilli grown in abundance.

Belgaum

• Salubrious climate, congenial environment, rich culture,

cosmopolitan lifestyle, excellent health care and education

facilities.

• Excellent Connectivity - Located on Bangalore - Pune 4 way

National Highway at a distance of 506 kms from Bangalore.

Connected to Goa by National high way.

• Connected to Mumbai, Bangalore and Goa by broad gauge

railway line.

• Connected by air - Airport at a distance of 20 kms from

Belgaum city.

• Good shipping facilities - Nearest port, Goa is at a distance of

135 kms. Karwar port at a distance of 160 kms and Mangalore

port at a distance of 445kms.

• Foundry Cluster at Belgaum offers excellent scope for

Engineering Industries

• Good infrastructure - 4 industrial areas in the district with 289

acres of developed land.

• Availability of skilled manpower- 4 engineering colleges, 2

medical college, 1 dental college, 2 management institutes ,12

polytechnics, and other degree colleges provide necessary

skilled manpower.

• Presence of major industries -INDAL Aluminium Factory, Tata

Power, Forbes Gokak, many sugar industries.

• Agri Resources- Sugarcane, Cotton, Tobacco

Tumkur

• Tumkur district is located north-west of Bangalore at a

distance of about 70 kms. The district is bounded by Mandya

district in the South; Chitradurga and Hassan districts in the

west; Chikamaglur in the northeast and Ananthapura district

of Andhra Pradesh State in the southeast direction.

• Tumkur town is the administrative head quarters of the

district and is a centre for commercial, business and

educational activities.

• It is home to Tumkur University, 4 engineering and 1 medical

college and other institutions of importance.

• The district consists chiefly of elevated land intersected by

river valleys. The district is famous for its iron ore deposits.

• Tumkur has good networks of rail and road. The city is

situated on the National Highway No.4.

• The city is on the broad gauge train route from Bangalore to

Shimoga and Hubli via Kadur.

• Good infrastructure- 7 industrial areas in the district with

1240 acres of developed land.

• Existence of major industries –HMT Watch factory, TVS

Electronics, Wipro, Karmobiles, Johnson Tiles, Mysore Cements,

Kirloskar Electrical Limited etc.

• Agri Resources- Coconut, Groundnut and Ragi

Kolar

• A landlocked district, Kolar is the eastern gateway to

Karnataka. Kolar is popularly known as the golden land of India

owing to its famous Kolar Gold Fields.

• Kolar district is located in the southern region of the State of

Karnataka. It belongs to the semi-arid drought-prone region of

the State.

• The district is bounded by the districts of Bangalore and

Tumkur on the west and on all other sides by the districts of

the adjoining States of Andhra Pradesh and Tamil Nadu. On

the north, it is bounded by Anantapur district; on the east by

Chittoor district of Andhra Pradesh and on the south by the

districts of Krishnagiri and Vellore of Tamil Nadu.

• Kolar has no airport. The nearest air port to the town is at

Bangalore. Bangalore International Airport is at a distance of

85 kms.

• Good shipping facilities- Nearest port, Chennai is at a distance

of 330 kms.

• Good infrastructure- 4 industrial areas in the district with 617

acres of developed land.

• Availability of skilled manpower- 2 engineering colleges, 2

medical college, one dental college, two management

institutes, 12 polytechnics, and other degree colleges provide

necessary skilled manpower.

• Food Park in the district.

• Cultivation of vegetables is becoming more popular in the

district. The main vegetables grown in the district are potatoes,

tomatoes, brinjal, beans, beetroot, carrot, chow-chow and

cabbage. Malur is the prime vegetable growing taluk.

Chickballapur taluk is well known for potato cultivation in the

State.

.Shimoga

• Salubrious climate, congenial environment, rich Malenadu

culture, and good education facilities.

• Located 278 Kms north east of Bangalore connected by

National Highway 206. Also connected by broad gauge

railway line.

• Airport is proposed at Shimoga.

• Nearest Port - Mangalore, at a distance of 186 kms connected

by National Highway 13 and broad gauge rail, Karwar at a

distance of 211 kms connected by National Highway 206.

• 3 industrial areas with 463 acres of developed land in the

district developed by KIADB. 3 industrial eStates in district

developed by KSSIDC.

• Special Economic Zone for auto components promoted by

KIADB is coming up at Machanalahhi, 9 kms from Shimoga on

Shimoga - Bangalore National highway.

• Availability of skilled manpower - 1 engineering college, 1

dental college, 8 polytechnics and other colleges & technical

institutes. New government medical college sanctioned for

Shimoga.

• Major Industries - Mysore Paper Mills, Vishweshwaraiah Iron

and Steel Industries, Perfect Alloy Components, Shantala

Ductile and Grayiron Foundry Pvt Ltd, Pearlite Liners Pvt Ltd

and other alloy casting industries and auto component

industries.

• Agri resources - Areca nut, paddy, sugar cane – great potential

for areca nut based industries.

Hassan

• Salubrious climate, congenial environment, rich culture,

cosmopolitan lifestyle, excellent health care and education

facilities.

• Located at a distance of 190 km north west of Bangalore on

National Highway 48, connecting Bangalore and Mangalore.

• Famous heritage sites - Belur, Halebid and Shravanabelagola

around Hassan city known for world famous sculptures.

• Nearest port - Mangalore, at a distance of 170 kms.

• Land acquired for airport at Hassan. Nearest airports are at

Bangalore and Mangalore

• Ideal destination for investment – Presence of sector specific

SEZs viz 1.Pharmaceuticals & Biotechnology 2.Food

Processing and Agro Based Industries 3.Textiles

• 4 industrial areas with 2184 acres of developed land in the

district.

• 2 engineering colleges, 1 dental college, 1 ayurvedic college, 3

polytechnics and 20 other degree colleges provide a large

pool of skilled manpower.

• Technology hub - ISRO Master Control Facility at Hassan.

• Spice Research Institute at Sakleshpur.

• Agri resources - Coffee and potato grown on large scale.

Raichur

• Congenial environment and good education facilities.

• Abundant mineral resources like quartz , soap stone offer

great potential for mineral based industries.

• Located 416 kms north of Bangalore connected by good road

and by broad gauge railway line. Also connected to Mumbai

and Hyderabad by rail.

• Nearest airport - Hyderabad at 200 Kms, Hubli Airport at a

distance of 324 kms.

• Nearest Port – Goa and Karwar ports at distance of around

500 kms. Mangalore port at a distance of 595 kms.

• 3 industrial areas with 2350 acres of developed land in the

district .

• Availability of skilled manpower - 2 engineering colleges, 1

agricultural science college and other colleges and technical

institutes.

• Major industries- Raichur Thermal Power Plant with annual

generation of 10,000 million units, Hutti Gold Mines, Mysore

Petro Chemicals Limited, Raichur Solvents, Vishal Cotspin etc.

• Agri resources- Paddy, cotton and horticultural crops,

tremendous potential for agri based industries

Gulbarga

• Gulbarga is located on the northern side of the State. The

entire district is situated in the Deccan Plateau and the

general elevation ranges from 300 to 750 meters above mean

sea level. Two main rivers, Krishna and Bhima, flow in the

district.

• Gulbarga is an industrially backward district, but presently is

showing signs of growth in the cement, textile, leather and

chemical industries.

• It is also very important from tourism point of view, with

the most popular tourist destination being the Gulbarga Fort.

• Hyderabad Airport is the nearest airport to Gulbarga city

(225kms).

• Gulbarga is an important station on the Central Southern

Railway line. There are daily trains from Bangalore, Mumbai,

Delhi and Hyderabad.

• There are frequent buses from Bangalore and Hyderabad

to this city. Bangalore and Hyderabad are 610 kms and 225

kms away from Gulbarga respectively.

• Gulbarga has a university and availability of skilled

manpower is not a problem with 4 engineering colleges, 6

medical colleges, 8 polytechnics and other colleges & technical

institutes.

• Major Industries- ACC Cement Limited, Vasavadatta

Cements, Zawar Cements Private Limited Rajashree Cements,

Renuka Sugars Pvt Ltd, The Ugar Sugar Works ltd.

Projects under implementation in the State in urban

infrastructure:

Bangalore Megacity Scheme - The Megacity Project envisages

the overall improvement in the quality of life of citizens by

providing developed infrastructure facilities, modernized

transport, road safety, environmental improvements, slum

upgradation, easing of traffic congestion by construction of

flyovers and under ram, pedestrian subways etc. A total of 54

projects amounting to Rs.800.07 crore have been sanctioned for

the Megacity Project. So far, 16 projects have been completed.

Subsequently the Megacity Scheme was subsumed in JNNURM.

Accelerated Urban Water Supply Scheme (AUWSP): An

upcoming project that the Karnataka Government has given its

nod for is the US$ 163 million drinking water project. The

Government has decided to extend the 24x7 water supply

scheme to the entire city corporations of Hubli-Dharwad,

Belgaum and Gulbarga. water supply will be augmented in

Hubli-Dharwad City Corporation by taking water from

Malaprabha river and from Ghataprabha river for Belgaum city.

The major focus of the project is on physical investments in the

system, and strengthening of institutions for service delivery.

Another set of projects to be cleared by Central government

under JNNURM include remodelling of storm water drainages in

Byatarayanapura (Rs 117 crore), Krishnarajapura (Rs 118 crore),

Rajarajeshwari Nagara (Rs 142.74 crore) and development of 17

lakes (Rs 191.43 crore).

The Chief Minister’s Small & Medium Towns Development

Programme was launched in 2009-10 to provide additional grants

to smaller ULBs like City Municipal Councils and Town Municipal

Councils to improve infrastructure and urban governance in tier II

and tier III cities. The total outlay of the programme is more than

Rs. 1,400 crore and is expected to be completed within a two

year period.

JNNURM – Bangalore and Mysore are the two cities being

developed under the central government programme, Jawaharlal

Nehru National Urban Renewal Mission.

The Draft Urban Development Policy 2010 for Karnataka has

suggested the establishment of the Karnataka Urban Renewal

Mission to focus on infrastructure development in small and

medium cities as not all the cities in the State are eligible for

funds under the Jawaharlal Nehru National Renewal Urban

Mission (JNNRUM) scheme. In such a situation, a Karnataka

Urban Renewal Mission would help give proper attention to

those cities that are now outside the ambit of JNNRUM. The

draft policy has also suggested the establishment of metropolitan

planning committee for Bangalore, Hubli-Dharwad and Mysore,

and district planning committees in other areas.

Bangalore Metro Project, implemented by the Bangalore Metro

Rail Corporation Ltd, covers a length of 33 kms, costing Rs.5,453

crore. The project will be completed by 2011 and will provide

the much needed transport infrastructure to the city of

Bangalore. The Bangalore Metro has been designed for a capacity

of 40,000 PHPDT. The number of passengers expected to travel

on the metro everyday is estimated at 10.20 lakh in 2011 and

16.10 lakh in 2021.

ABIDe - Agenda for Bangalore Infrastructure and Development

Task Force is an initiative of the Chief Minister Dr. B.S.

Yeddyurappa and the Government of Karnataka to build a better

Bangalore for its citizens by adopting a new urban planning

model, upgrading infrastructure and improving social facilities to

create a better environment for a good quality of life.

ABIDe TASK FORCE DELIVERABLES:

• Comprehensive Integrated Development plan for entire

Bangalore, wardwise

• (Plan Bangalore 2020) with immediate (2008-2009), medium

(2008-2012) and long

• term (2008-2020) objectives and budgeting and financing

perspectives as well.

• Review all various existing plans.

• Budget and Financing Plan for Plan Bangalore (Finance

Bangalore) that will include increasing Revenues (by increasing

per capita revenue of City) and by minimizing dependence on

government funds for long term financing (Private Public

Partnership, raising of direct funds, Government funding etc).

• Regular Reviewing and overseeing the implementation of the

various projects of Plan Bangalore and the agencies involved.

• Make recommendations on the Bangalore governance

restructuring (Govern Bangalore).Objective is to reduce

multiplicity in planning and create a coordinate structure for

execution and financing of Plan Bangalore including the

restructuring of Planning. Investment/Financing, Project

Execution and Public service Delivery/maintenance of

organizational structures of Bangalore City with a view of

ensuring better costs, better services, transparency and citizen

involvement. Ensure government accepts recommendations.

• Create a permanent platform for “citizens-government”

interaction-Involve Bangalore)

a. Website and News letter (English and Kannada)

(Bangalore.gov)

b. 6 monthly State of City survey, State of city summit /

progress report.

Scope and Coverage of Plan Bangalore 2020

• Road, Traffic Management and Transportation

• Water and Sanitation

• Urban Poor

• Citizen Centric Governance

• Heritage and Environment

• Education & Health

• City Facilities

• Policing, Law and order and Enforcement

• Power

• Airports & Railway Stations

Bangalore: Bangalore is recognized as the Knowledge Capital of

India and has emerged as the most preferred destination for

frontier technologies like Information Technology and

Biotechnology. Bangalore is the city to showcase technology now.

Bangalore IT and Bangalore Bio are recognized as India 's leading

events in their fields. The new initiative of launching Bangalore

Nano by Dept of IT, Biotechnology and Science & Technology,

Government of Karnataka is the first step in fostering a business

environment for the development of Nanoscience and the

Nanotech industry. Bangalore Space Expo 2008 was India’s first

space exhibition organised by ISRO, CII and Antrix Corporation

Ltd. Huge participation from domestic and foreign companies –

Hindustan Aeronauticals Ltd. Arianespace (France), Infinisat

(USA), European Space Agency, Israeli Space Agency etc.

The Bangalore International Automotive Expo, the largest in

Southern India, showcases over 500 global automotive brands,

designs and technology to more than 100,000 visitors comprising

buyers, industry leaders, suppliers, government officials and the

media.

Bangalore is in fact the expo hub of the State and the country,

organising conventions on State of the art technology front.

BIEC( Bangalore International Exhibition Centre) is India’s first

‘LEED Certified’ Green conference and exhibition facility.

Sprawled over 34 acres, near Peenya Industrial township of

Bangalore, the beautifully landscaped complex has 40,000 sqm of

covered column-less air-conditioned exhibition space (three

exhibition halls), a multi-facility conference centre spread over

5,600 sqm including 4 Conference Halls, a Helipad, an

Amphitheater, VIP Lounge, Food Court of 7500 sqm, a Machine

Tool Training Centre, and large outdoor area. It also has an

infrastructure to distribute 11 MW of power supply. With the

above facilities BIEC has been able to cater to well over 20,000

business visitors per day on several exhibition days. BIEC is today

the first choice of all major exhibitions/events/conferences

organizers from all over the world. BIEC caters to all industry

segments such as engineering, auto, furniture, medical, energy,

tourism, biotechnology, food processing, agriculture, textiles,

printing, logistics and material handling, industrial automation,

electronics, IT and other sectors.

Some of the leading exhibitions already held and scheduled at

BIEC are IMTEX, EXCON, BANGALORE BIO, INDIA ITME,

BANGALORE IT.COM, INDIA WOOD, IETF & IHF, DIEMOULD,

EXPODENT, ELECTRONIC INDIA, INTERNATIONAL

COMMERCIAL VEHICLE EXPO, ELCA, MDA, INDUSTRIAL

AUTOMATION & CeMET INDIA, STONA, VIV, ASIA PRINT

EXPO, BUILDARCH & BUILD UP, BANGALORE SPACE EXPO,

INSTORE ASIA, etc.

Its international standards have received much acclaim and BIEC

is a member of UFI- The global association of exhibition industry

and IAEE - International Association of Exhibitions and Events.

Deutsche Messe AG - the owners of the world's largest

exhibition facility in Hannover, Germany, has a partnership

arrangement to promote BIEC globally.

Bangalore boasts amusements parks, a planetarium, a water park

and an aquarium – all of which are of interest to tourists and for

residents of the city. Bal Bhavan is one of the city’s most popular

amusement parks. Amusement parks provide excitement and a

way to cool off while having fun. Bangalore is the best place to

experience adventure sports in India. From waterfalls to rough

terrain, lakes and centuries old caves, Bangalore has lots to offer

explorers. There are ample opportunities to enjoy aero sports,

river rafting, rides at amusement parks, boating on lakes, fishing, go

karting, para gliding, cave exploration, cycling etc. The hills in

Ramnagara are located around 20kms from Bangalore, and are

very popular among rock climbers. The Sri Revanna Sideshwara

hills are the biggest draw; and the forested area that surrounds

the hills has been proposed as a wildlife sanctuary. The unique

wildlife found in this scrub jungle vegetation and also the

prehistoric rock formations are a popular attraction for tourists

and adventure enthusiasts.

The cities of Karnataka are not just centres for industry and

commerce but also major sites for tourism and sports. For

instance, another innovative experience coming from Karnataka

in recent times is the Toyota Karnataka Golf Festival, another

example of the partnership between the tourism department

and the private sector in boosting novel forms of tourism in the

State. Sponsored by Toyota Kirloskar Motor Pvt. Ltd. the

tournament brought more than 250 amateur and corporate

golfers on the course in October 2009. Golf courses in Karnataka

have been upgraded at a cost of Rs. 20 crore and apart from

Bangalore, Mysore, Chikmaglur and Belgaum are other towns

where the sport is popular.

Karnataka - A workforce that delivers

Skilled manpower base in the State has attracted global and

domestic majors. The State leads all the others in India in its

labour supply ecosystem and this section also describes the

government’s efforts to maintain this lead through a pro-active

strategy.

The Labour Supply Ecosystem Index created by Teamlease

Services and Indicus Analytics as part of the India Labour Report

2010 ranks Karnataka no.1 in the country on labour supply

parameters or the employability of the workforce. Ranked at 1

together with Goa in the previous study in 2005, Karnataka has

moved up to secure No. 1 place alone, with an index value 107

points above Delhi, ranked 2 in 2009.

Karnataka State has a long tradition in higher education

institutions that has created a steady source of skilled workforce,

providing a strong base for all economic activity. There has also

been an unfailing emphasis over the years on innovation and

research in cutting edge fields. The Indian Institute of Science, IISC,

India’s premier institution in research and post graduation

education in science and engineering, began in 1909, the first

private-public partnership in the country spread over 400 acres

of land in Bangalore. A pioneer in advancing science and

technology, in 1942 the Institute started the first two year

programme in aeronautical engineering, creating a nucleus of

graduates to serve in the fledgling aerospace industry at that time.

The first State in the country usher the private sector into higher

education, one of the most striking features of higher education

in Karnataka is the extremely high growth in private sector

educational institutes. In university education, the gross enrolment

ratio is at 14% which is higher than the national average.

Karnataka has the third highest number of engineering colleges in

the country and the highest number of medical colleges in the

country. While engineering colleges have an intake of more than

50,000 students per year, general bachelor courses in arts,

commerce and sciences have a total enrolment of more than

200,000 students in the 648 general colleges across the State.

The State has a number of excellent higher education institutions,

set up with public support, that span the entire gamut of

educational disciplines. The universities in Bangalore, Mysore and

Gulbarga have been rated 5 stars by National Assessment and

Accreditation Council while IIISc ranks among the top fifteen

global institutions in the country. National Institute of Technology

Karnataka(NITK) at Suratkal, which is celebrating its golden

jubilee in 2009-10, and Visvesvaraya Technology University (VTU)

in Belgaum are leading centres for engineering excellence,

providing high-quality graduates.

Some of the other well known institutions in the State span

diverse fields:

• Indian Institute of Management (IIM)

• National Law School of India (NLSIU)

• National Institute of Fashion Technology (NIFT)

• Indian Institute of Social and Economic Change

• National Institute of Mental Health and Neuro Science

(NIMHANS)

• National Institute of Advanced Studies (NIAS)

• National Institute of Biological Sciences (NIBS)

• National Institute of Animal Nutrition & Physiology (NIANP)

• National Dairy Research Institute

• National Tuberculoses Institute (NTI)

States Values 2005 Rank 2005 Value 2009 Rank 2009

Karnataka 478 2 607 1

Delhi 450 4 500 2

Andhra Pradesh 439 5 476 3

Gujarat 418 6 470 4

Goa 478 1 464 5

Kerala 417 7 458 6

Maharashtra 416 8 448 7

Tamil Nadu 475 3 432 8

Bihar 276 18 429 9

West Bengal 343 11 426 10

Punjab 324 14 419 11

Haryana 318 15 415 12

Rajasthan 337 12 363 13

Uttar Pradesh 334 13 359 14

Orissa 318 16 356 15

Himachal Pradesh 373 9 347 16

Madhya Pradesh 362 10 334 17

Assam 272 19 207 18

Jammu & Kashmir 284 17 100 19

• Centre for Liquid Crystal Research

Industrial development in Karnataka has strong linkages with the

educational infrastructure in the State. For instance, Wipro’s entry

into Karnataka in the early eighties was due to collaborative

efforts with IISc, Bangalore. This relationship holds for other non

IT manufacturing entities too, creating an ecosystem in which

growth flourishes. The Central Food Technological Research

Institute which was established in 1950, chose to locate in

Mysore largely due to the academic environment, the University

of Mysore, proximity to the IISc and the R&D strengths of

Bangalore and the Nutrition Research Laboratories at Coonoor.

The presence of CFTRI in the State has attracted not just

agro-processing firms but also the high-technology biotech

industry to Karnataka.

Karnataka also has the largest number, 1162, of Industrial Training

Institutes in India, making up 15% of the country’s total. These

institutes provide a valuable resource in skilled technicians.

According to an ILO study of these institutes in Karnataka and

Tamil Nadu, ‘The standards at the Karnataka institutes appear to

be higher than those in Tamil Nadu, with more up-to-date

equipment and better training.

Karnataka took up Skill Development as a major development

policy in 2008-09 and a State level corporation, the Karnataka

Vocational Training and Skill Development Corporation was set

up in August 2008 as a special purpose vehicle to implement the

recommendations of the Skill Commission. The Corporation has

the target of providing training and jobs to 10 lakh people in 5

years; an objective it is working towards through organising Skill

N Job Fairs, establishing Help Centres in Employment Exchanges,

establishing e-learning labs in SC/ST post matric hostels in the

State, in association with NIIT and the Social Welfare

Department, introducing an ‘Internship policy’ under the PPP

mode with medium and small scale industries etc.

The State Government has planned to increase the intake

capacity in ITIs to 5 lakh from the present 1.37 lakh, by starting

new ITIs under the PPP mode, establishing 100 Skill

Development Centres at most backward talukas to give training

to rural persons etc. The government has partnered with

Non-Resident Indians to start new State-of-the-art ITIs,

production cum training institutions etc. to utilise the skill and

expertise of the diaspora.

Under the Government of India’s Skill Development Initiative, the

Modular Employable Skills Scheme has been initiated in

Karnataka. In 2009-10, 340 modules were developed in 32

professions for training of unorganise labourers, with priority

given to automobile, construction of building, hospitality and

electronic fields. Under this scheme, the government plans to

train ten million persons, by providing training in the ITIs/ITCs and

at any other location having facilities. More than 400 centres in

the State have registered as Vocational Training Providers under

this programme to impart training through courses in auto

repair, electronics, fabrication, process instrumentation, plastics,

information and communication technology, material

management, soft skills etc.

Karnataka had more than 20 million people in the age group of 5

to 24 years in 2006, pointing to the huge demand for school and

college education. By 2020, there will be on an average 4 lakh

new job entrants every year, add to this the growing aspirations

of a middle class with more purchasing power and the demand

for higher education and hi-technology skills grows in size. The

government recognizes that this demand can be met only

through private sector investment and is giving full support

through its policies to create an enabling environment and

maintain its lead in providing the most employable workforce in

the country.

Karnataka – proactive and effective government

The State government policies encourage investments, as well as

governance achievements on broad parameters such as effective

law and order, e-governance initiatives etc.

The Karnataka State government has always provided an

investor-friendly responsive administration. The Karnataka Udyog

Mitra, set up more than a decade ago, works as single contact

point for all investors - from receiving a proposal to ensuring its

implementation KUM is actively working with the investors at all

stages. The State Level Single Window Clearance Committee and

the State High Level Clearance Committee (for investments

greater than Rs. 50 crore) have been working to clear proposals

in a speedy manner.