Industries

INDUSTRY IN KARNATAKA

Karnataka has been spearheading the growth of Indian industry, particularly in terms of high-technology industries in the areas of Electrical and Electronics, Information & Communication Technology (ICT), Biotechnology and, more recently, Nano Technology. The industrial structure of Karnataka presents a blend of modern high-tech capital goods and knowledge intensive industries on the one hand and traditional consumer goods industries on the other. This chapter throws light on the industrial growth of Karnataka in 2019-20 as well as the industrial policy initiatives taken by the Government, among others.

 

TRENDS IN INDUSTRIAL PRODUCTION

Trends in industrial production can be analyzed by considering the changes in the Index of Industrial Production (IIP). Towards calculating the index, the weights of different sectors and sub-sectors are assigned based on their contribution to Gross Value Added (GVA) of industry in the base year. The manufacturing sector has the highest weight of about 81.1% followed by electricity sector (11.8%) and the mining sector (6.9%).

 

Index of Industrial Production (IIP) with base year as 2004-05 of Karnataka covering mining, manufacturing and electricity sectors and the General Index for current year 2019-20 stood at 203.45. The overall organized industrial sector of Karnataka has registered 1.20% growth in 2019-20 as compared to 2018-19. Within the organized industrial sector, Mining sector shows the highest growth of 4.35% followed by the Manufacturing sector 2.58% and Electricity sector registered negative growth of 9.24%. As a result of this moderate growth rate of 1.20% was observed. The compound average growth rate (CAGR) for this period for the entire organized industry was about 6.10% whereas it was 6.63% for manufacturing and 5.31% for electricity. A decline of 1.07% was seen in the output of the State's mining sector.

 

ALL INDIA QUICK ESTIMATES OF INDEX OF INDUSTRIAL PRODUCTION

The All India Quick Estimates of Index of Industrial Production with Base Year 2011-12 for the month of November 2020 stands at 126.3. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of November 2020 stands at 104.5, 128.4 and 144.8 respectively. These Quick Estimates will undergo revision in subsequent releases as per the revision policy of IIP. As per Use-based classification, the indices stand at 121.3 for Primary Goods, 84.6 for Capital Goods, 136.7 for Intermediate Goods and 135.5 for Infrastructure/ Construction Goods for the month of November 2020. Further, the indices for Consumer durables and Consumer nondurables stands at 115.9 and 149.1 respectively for the month of November 2020.

 

INDUSTRIAL GROWTH BY TWO DIGIT INDUSTRIAL CLASSIFICATION

At the two digit NIC-04 level, manufacturing industry sector has been sub-divided into 22 major industry groups. Among the major industry groups, Basic Metals have the highest weight of 119.93 followed by Chemical and Chemical Products (107.89) & Food Products & Beverages (71.30). These three groups contribute more than 1/3rd of total weight (811.36), for the base year 2004-05. During 2019-20, among the two digit level industries, highest index is observed in group 22- Publishing & Printing Materials (374.80) followed by group 20- Wood and Wood products (273.48), 34- Motor vehicles, Trailers and semi – Trailers (272.09), group 29- machinery equipment (263.10), group 35- Other Transport Equipment (248.54). It is observed that the growth rate has decreased during 2008-09 & has sudden shoot up in 2009-10 & observed a fluctuation in 2011- 12 & 2012-13, decreased during 2013-14, 2014-15, 2015-16 & marginal growth was observed from 2016-17 to 2019-20.

 

ORGANISED MANUFACTURING SECTOR

The Annual Survey of Industries (ASI) presents detailed statistics on the manufacturing sector of the organized industrial sector. Table 9.4 presents ASI statistics for registered factories for 2016-17 and 2017-18 for Karnataka and All-India. Karnataka accounted for 5.69% of the total registered factories in 2017-18 in the country. The contribution of registered factories of Karnataka stood at 5.79% of total fixed capital, 6.55% of total output and 6.97% of Gross Value Added in the same year. The share of Karnataka in total registered factories has marginally increased in 2017-18 as compared to 2016-17. However, the relative contribution of Karnataka's registered factories to the national industrial performance in terms of working capital, total input and output, gross and net value added and profits has marginally decreased, fixed capital has been increased during the same period. According to ASI 2017-18 with NIC-2008, the major industrial groups in the registered factory sector of Karnataka in terms of value of output are:

• Manufacture of Food Products - 16.75%.
• Manufacture of Basic Metals-13.33%.
• Manufacture of Coke and refined petroleum products - 11.75%.
• Manufacture of Motor vehicle, trailers & semi-trailers-9.04%.
• Machinery and equipment- 5.85%
• Manufacture of Electrical Equipment - 4.46%.
• Manufacture of Other manufacturing materials-4.34%.
• Manufacture of Wearing Apparels - 4.02%.

 

These eight industry groups together accounted for more than 72% of the total value of output of registered factories of Karnataka in 2017-18. Karnataka compares favorably with allIndia in terms of all the indicators – per factory employment, output and gross value added. Though registered factories of Karnataka, on an average are more capital intensive than that of all-India, they are also more employment-intensive and generated more value added as well as output.

 

MICRO, SMALL & MEDIUM ENTERPRISES: Micro, Small & Medium Enterprises (MSMEs) form an important and growing segment of Karnataka's industrial sector. As per the MSME amended Act, Micro, Small and Medium Enterprises (MSMEs) are classified based on two factors - investment and annual turnover as follows: 97232 MSME Units have been registered in the State during 2019-20 with an investment of Rs.1859727 lakhs by providing employment to 702325 persons. Registration of Small Scale Industrial units in Karnataka (Cumulative) is shown in Appendix 9.4. As compared to 2018-19, there is a 40% increase in the number of units registered, 25% increase in investment and 20% increase in number of persons employed during 2019-20.

 

Out of 97232 units that were registered in Karnataka during 2019-20, about 9.03% (i.e. 8782 units) of the units were related to manufacturing of Food Products which occupied the top position followed by Manufacturing of Textiles 6.50% registration. During 2019-20 - Manufacturing of Food Products, Other manufacturing, Textiles, Machinery and Equipment and Other professional, scientific and technical activities have occupied the top 5 positions in terms of investment. Manufacturing of Food Products being the first among top 10 is accounting for about 11.21% of the total investments followed by other manufacturing being 8.41% of the total investment. In terms of employment Manufacturing of Food Products, Wearing Apparel, Textiles, Other manufacturing and other professional, scientific, and technical activities are in top 5 positions. Manufacturing of Food Products being in first position is generating about 8.39% of the total employment and is closely followed by Manufacturing of Wearing Apparel with about 6.83 % employment.

 

SELECTED INDUSTRIAL SECTORS

Status of Implementation of Food parks Food Karnataka Ltd., has been nominated as the nodal agency to look after the implementation at the following Food Parks in the State.

 

M/s. Innova Agri Bio Tech Park Limited, Malur: This Food Park has been developed in an area of 87 acres of land in KIADB Industrial Area Malur, Kolar District. To complement the activities in addition to the food processing, a gamma irradiation facility has been installed and accredited from USFDA. 50.48 acres in the park has been allotted to 22 food processing units. An amount of Rs. 400 lakhs each (Total Rs. 800 Lakhs) has been released by the State and Central Governments. Totally 14 food processing units are currently functioning in the park. Mangoes are being exported to USA and Australia by utilizing the Gamma Irradiation facility.

 

M/s. Green Food Park Limited, Bagalkote: This Food Park is being developed in an area of 100 acres of land at Navnagar KIADB Industrial Area, Bagalkote. 52.5 acres of land allotted for 18 food processing units/ companies. An amount of Rs.700 lakhs (State: Rs. 400 lakhs and Central: Rs.300 lakhs) has been released. Totally 06 food processing units are currently functioning in the park.

 

M/s. Akshaya Food Park Limited, Hiriyur: The Food Park has been developed in an area of 106 acres and 37 guntas of land at Huchavanahally village, Hiriyur Taluk, Chitradurga District. An amount of Rs.400 lakhs unsecured loan has been disbursed by State and Central Government. Totally 08 food processing units are currently functioning in the park

 

M/s. Jewargi Agro Food Park Limited, Jewargi: This Food Park is being developed in an area of 105 acres of land. An amount of Rs.796 lakhs (State: Rs. 400 lakhs and Central: Rs.396 lakhs) has been released. Totally 03 food processing units are currently functioning in the park.

 

Food Parks under the State Scheme: In the Budget 2008-09, 6 food parks are approved. They are Bengaluru (Rural), Tumkuru, Shivamogga, Davanagere, Vijayapura and Belagavi

 

 

TEXTILES INDUSTRIES:

To establish the textile and garment industries in Karnataka, as a producer of internationally competitive value added products thereby maintaining dominant presence in the growing domestic and international market and contributing to the sustainable employment and economic growth of the State. To support the industry with skilled human resource and to create employment opportunities in the State. The Department will support skill development activities to the unemployed youth and up-gradation of skills for the people employed in the textile sector.

 

There are 944 powerloom co-operative societies (728 handloom and 216 powerloom) in the state of which only 610 (483 handloom and 127 powerloom) are functioning. Further, out of 11 co-operative spinning mills in the state only 4 are functioning.

 

Weavers Special Package: An amount of Rs.127.18 crores has been utilized for the following activities during 2019-20.

2. a) Rs.2.85 lakhs for Medical Reimbursement for 8 Weavers.
3. b) Rs.5.15 lakhs for funeral expenses to 103 Weaver families.
4. c) NABARD Reimbursement Scheme-2 Co-operative societies Rs.0.58 lakhs. d) Rs.4.50 lakhs for Weavers' Study Tour for 9 Co-operative societies.

 

Under Thrift Fund Scheme 52 Cooperative Societies were assisted with an amount Rs.1.60 crore.

• 10 Lakhs is released to KHTI, Gadag and Jamakhandi.
• Subsidy of Rs.13.69 lakhs for purchase of Raw Material to 30 cooperative societies.
• 4.69 crore rebate facility is extended to 91 Handloom societies.
• 40.43 Crores are released to various ESCOMS as Power Subsidy of 32668 Powerloom Societies.
• 91.50 lakhs to 62 beneficiaries & Rs.137.25 Lakhs to 57 beneficiaries was released for purchase of Electronic Jacquard.
• 34 lakhs released for 4 beneficiaries under Wool Sector Development Scheme.
• 480.79 lakhs Power Subsidy was provided to 4 Co-operative spinning mills. Rs.8.63 lakhs subsidy has been given to Co-operative spinning mills for purchase of cotton from Cotton Corporation of India (CCI).

 

Under SCP/TSP an amount of Rs. 2189.68 lakhs for 102 SC beneficiaries and Rs.1321.66 lakhs for 66 ST beneficiaries has been released to take up weaving activities. An amount of Rs.2000 lakhs has been released to Karnataka Handloom Development Corporation of which Rs.346 lakhs for SC programmes, Rs.1512 lakhs for general programmes and Rs.142 lakhs for ST programmes. During 2019-20 an amount of Rs.10,000 lakhs has been spent for the following programmes.

 

226 MSME units

• 2699.16 lakhs has been released to 1 mega projects for capital subsidy, power subsidies and EST/EPF contribution.
• 127.60 lakhs has been released.
• 330.89 lakhs has been utilized for 27547 beneficiaries which includes 1146 scheduled caste 3717 scheduled tribes and 12684 general category beneficiaries. Employment oriented training was imparted to 27862 persons.

 

Progress of 2020-21:

The amount provided for 2020-21 is Rs.36498.00 lakhs of which an amount of Rs.20227.86 lakhs is incurred as expenditure up to December 2020 as against the release of RS. 25125.48 crores towards weavers’ package and implementation of Garment policy.

 

SERICULTURE

Sericulture is one of the major employment generating sectors particularly in rural Karnataka. The area under mulberry cultivation in the State is about 110209.18 hectares as at the end of November 2020, which is higher than the area under mulberry cultivation in 2019-20. From 2017-18 to 2020-21 up to November 2020 32.057 metric tonnes of raw silk was produced in India.

 

During 2019-20 an amount of Rs.9900.68 lakhs has been incurred as expenditure as against the allocation of Rs.9923.11 lakhs provided under state and central plan schemes. During this period 42,595 Sericulture Beneficiaries were covered. Similarly during 2020-21 an amount of Rs.8677.65 lakhs is incurred as expenditure up to November 2020 as against the allocation of Rs.12343.00 provided under various state and central schemes. 5531 beneficiaries were covered up to November 2020. To cover more farmers under sericulture the beneficiaries are being provided with Seed cocoon bonus/incentive, Bivoltine / MSC chawki cost, Rearing Equipment, Raw silk incentive produced in Automatic Reeling Machines and financial assistance for construction of rearing houses/mounting halls, establishment of chawki rearing centers, drip irrigation etc. At present there is a shortage of skilled labourers. In view of this government has proposed to establish new technology reeling machinery in Santhemarahalli silk factory to impart training to youth of this region and make them self-reliant. An amount of Rs.2 crore has been provided for this purpose. During 2020-21 a new programme has been announced to establish a Silk Worm Processing Centre with public-private partnership, in Kanva Farm in Ramanagara District, to process 30-32 metric tonne of silk worm larvae daily for the production of value added sub-products. The silk yarn reelers would be greatly benefitted by this.

 

Karnataka Silk Marketing Board Ltd.: The Karnataka Silk Marketing Board Ltd. was established in 1979. It purchases Silk yarn in the open auction in all the Silk Exchanges & maintaining the stability in the prices of silk yarn thereby protecting the interest of silk reelers and farmers. It gives fair price to the reelers & to make available twisted silk to weavers at reasonable rate. It has marketing network in the states of Karnataka and Tamil Nadu.

 

It caters to the requirements of Primary Cooperative Societies, weavers, National Handloom Development Corporation, Karnataka Handloom Development Corporation. During 2020-21 the Board has made a turnover of Rs.3225.00 Lakhs up to November 2020. The Government has also provided an amount of Rs.300.00 lakhs to the board for current year. During the current year the Board has made a trading profit of Rs.80.00 lakhs as on November 2020. During 2020-21 the Board has purchased 68 tons of silk valued @ Rs.1587.00 lakhs and silk yarn pledge 56 tons valued Rs.9.23 lakhs and sold 32 tons valued @ Rs.750.00 lakhs upto November 2020. Rs.0.67 Lakhs towards gratuity policy premium is provided in the books of accounts.

 

Karnataka Information Technology and Biotechnology Services: The Information Technology Revolution in Karnataka has began initially in Bengaluru.

 

e-Governance initiatives relating to the Department of Personnel and Administrative Reforms (e-Governance) Karnataka has an exclusive e-Governance Division in the Department of Personnel & Administrative Reforms, headed by secretary to Government. This was set up in the year 2003 with a view to accelerate the process of IT enabling eg. Government processes for the benefit of citizens and to improve transparency and efficiency in administration. The Department of Personnel & Administrative reforms (e-Governance) has created the necessary infrastructure for implementing e-Governance initiatives in the state. The Schemes of e-Governance Department are as follows:

 

1. Karnataka State Wide Area Network: The Karnataka State Wide Area Network is in operation since December 2009. It is serving as a state information high way for various departments of Government of Karnataka, providing video & data services and secured internet services. Though more than 4800 Government offices are connected to KSWAN, and Bandwidth for these offices are upgraded time to time as per need basis, as per KSWAN 2.0, CeG will facilitate secured connectivity to most of the Government offices in the state (about 6400 government offices). Initially, KSWAN was built on BOOT model and declared operational in December 2009, Since its operation, KSWAN is meeting the requirement of secured network connectivity to important Government departments like Treasury, IR, Health, RTO, Bhoomi etc. Some of the critical applications like Kaveri, Khajane, e-Hospital, Bhoomi, eProcurement, e-Office are running on KSWAN. More than 3000 Government offices are connected to KSWAN. KSWAN Control Rooms (PoP) are Operational at District and Taluka HQ and serve as aggregation point for network traffic. Bandwidths are taken from BSNL & Airtel for all District and Taluka PoPs, depending on actual need and are upgraded from time to time to meet requirement of traffic demand.

 

Government of Karnataka upgraded KSWAN to more robust and secure network namely KSWAN 2.0., which ensures end to end secured WAN services using MPLS technology within the network and that of the bandwidth service provider and LAN services in important Government buildings.

 

• Video Conferencing Solution was implemented as part of KSWAN1.0 project in the year 2009. 31 number of Video Conferencing end points units were provided to District Commissioner (DC) offices and #313 Committee room Vidhana Soudha and #122, Vikasa Soudha.

 

• In the year 2015, under the project Taluka video conferencing project, the central VC infrastructure was upgraded with higher capacity units and 219 video conferencing end points were procured to cover 141 Tahsildar offices, 29 DC offices, 23 District Court, 7 Prison Departments, and 19 HoD offices in Bengaluru.

 

• In the year 2018, due to additional demands, 104 additional video conferencing end points were procured to cover second VC end point unit in each DC offices, 1 VC unit in each ZP offices and 39 end points at DSERT offices and added to the existing video conferencing system.

 

• The video conferencing solution is widely used by 68 departments including boards and corporations.

 

2. E-Procurement: e-Procurement is aimed to enhance transparency, accountability and reliability and responsiveness in all Government procurement activities. The E-Procurement is implemented on an 'end to end' solution. Credit of the project is that it is a less-paper office. This project has been extended to 338 procurement entities as on 30th November 2020. A total of 8,84,460 tenders and 39,529 auctions have been published in e-Procurement portal and 22,58,280 bids have been received against these published tenders. This platform has enabled competition among the bidders. As on 30th November 2020, 1,29,309 suppliers are registered on the platform.

 

3. Human Resource Management System (HRMS): The Human Resource Management System covers automating all the Human resource functions like leave, transfer, payroll, administration and service procedures of the government and also provides a unified view of deployment of human resources across the state. Human resource Management System helps to create an exhaustive and accurate database of Government employees for effective administration, improving productivity and efficiency. HRMS is completely adopted in the state. The status as at the end of November 2020 is as follows:

 

1. Pay, D.A., Advance, arrears, etc., paid through electronic platform.
2. Immediate availability of salary component of Budget to the Finance Department.
3. An interface is provided to Accountant General Office for updating the Leave balance of Gazetted officers.
4. HRMS application is integrated with State Treasury application- Khajane-2.

 

4. Karnataka State Data Centre (SDC): Government of Karnataka (GoK) is committed to providing a secure, resilient, reliable and scalable information infrastructure for all Government Departments for hosting & running their eGovernance applications/Initiatives in a secure manner for providing faster and reliable citizen services.

 

To realize above objectives, 1st State Data Centre of Government of Karnataka was set up during 2004-05 as part of the core common technology infrastructure, at Khanija Bhavan (Khanija SDC) & is operational till date. This State Data Centre (SDC) provides infrastructure required for consolidating & hosting state level applications at a central location.

Karnataka State Data Centre located at Vikasa Soudha (Karnataka SDC) was set up in 2012 & is operational till date which is second Data Centre offering services to all Departments of Government of Karnataka. Both the Data Centres run on 24 X 7 basis & serve as State Data Centres catering to all Government of Karnataka Departments.

SDC currently provides the following types of services/facilities namely Equipment Hosting, Application Hosting and Data Hostingto departments of the Government of Karnataka:

 

Management Services

Monitoring: SDC has 24/7 operations & Management staff who continuously monitor the health of systems & assist in early detection of possible problems. The physical entry & access to systems is also closely monitored & logged.

 

Maintenance: 24/7 Operation & management staff can assist in regular or on demand maintenance activities such as data backup, installing system/ security patches & updates etc. The Data Centre operations at KSDC (Vikasa Soudha) & RSDC (Khanija Bhavana) is being provided by M/s Orange Business Private Ltd. 150 + physical servers, 2000+ VMs, 1950TB of SAN storage are deployed in both the Data centres. KSDC is ISO27001 & ISO20000 certified. As on date, 270 applications of 171 departments are hosted in KSDC & RSDC.

 

5. Unique Identification Numbers (UID): Aadhaar is a 12-digit unique Identity number issued to all Indian residents based on their Biometric and Demographic Data. The aim of the project is to provide Aadhaar number to all the residents of Karnataka. As on date 651 Lakhs Aadhaar numbers have been issued. Apart from this, many beneficiary schemes of Government of Karnataka has included Aadhaar based authentication which in-turn to help out to identify the right beneficiaries.

Presently 1,408 Aadhaar Centers has been deployed at various locations as detailed below:

1. Centre for e-Governance – 127
2. Atalji Janasnehi Kendra – 769

• Benguluru One – 258

1. Karnataka One – 113
2. BBMP – 141

 

1. Since majority of the residual population is within the age group of 0- 5, intensify the enrolments of residence in the age group of 0-5 years, a total of 2000 Tablets have been provided to Women and Child Welfare Department and suitable instructions have been given to complete the enrolments of all Children. Addition to this, CeG has provided 20 Tablets to Health and Family Welfare department for new born children enrolments.
2. Since the population in Bengaluru is high, the number of people to be enrolled is higher than other districts, an additional 258 Aadhaar enrolments have been provided to Bengaluru One centres and provided 141 Enrolment Kits to EDCS directorate for BBMP use.
3. Since the left out population contains Bed ridden, specially abled and physically challenged, the Home based Aadhaar enrolments are being carried out as per their requests.
4. Apart from these, Post offices, BSNL and Banks have started Aadhaar enrolments in many branches.
5. A dedicated call centre is operational for resolution of queries and complaints of Residents of Karnataka.
6. Proposed to Set up 2000 Aadhaar enrollment Centres across the state through CSC, SPV along with RDPR and UDD departments.
7. Additional 3 kits have been deployed 3 times in all the districts for the period of 3 months due to the demand and requests from District Administrations.

 

6. Karnataka Resident Data Hub (KRDH)
7. On-board Department for ASA/AUA

Pre-production: 7 departments.

Production: 14 departments.

 

• Name matcher App Software Support/ Maintenance on Annual basis Namescape software will contain functions namely string to string comparison, bulk string to string comparison for English to Kannada names and vice versa. The web services will be hosted at State Data Centre. On boarded departments for Name Matcher: 9 departments have been on boarded.
• C-DAC AUA-ASA Security Audit AUA-ASA Web services are in preproduction and Production status and transactions are being carried out successfully by various departments/ applications. C-DAC (Hyderabad) has conducted security audit on AUA – ASA for KRDH project services in the URLs.

2. KRDH as ASP for e-Sign Services e-Sign enables digital signing of documents and / or application forms electronically and online by leveraging Aadhaar. C-DAC (Pune) is selected to develop the application for CeG to become the ASP for e-Sign Services.

• Creation of e-Sign as a service for Digital signing of the e-Document using Aadhaar based e-KYC.
• After Consuming 50 lakh e-signs additional 1 crore e-Signs were procured on 18-07-2020.
• e-Sign services was integrated with eOffice as separate ASP ID . 42,967 have been used for the same.
• e-Sign ASP application security audit was done in September 2020.

Department Implemented e-Signs: 44 Departments have been on-boarded. The total e- Sign consumed till date is 70 lakhs. Departments in the process of implementing e-Signs: 8 departments.

 

7. DigiLocker: DigiLocker, one of the key initiatives under the Digital India Initiative, aimed at eliminating the usage of physical documents and enable sharing of edocuments across Government agencies via a mechanism to verify “authenticity” of the documents online. Residents can also upload their own e-Documents and Digitally Sign them using the e-Sign facility. These Digitally Signed Documents can be shared with Government Organizations or other entities. 16 departments/Boards/BESCOM/MESCOM/GESCOM have implemented the digilocker.

 

8. E-Office: e-Office is a Mission Mode Project (MMP) under the National e-Governance Program of the Government. The product is developed by National Informatics Centre (NIC) and is aimed for conducting office procedures electronically which is expected to transform government functioning to a more efficient, effective and transparent intra-government transactions and process. The product is built as single reusable system by bringing together independent functions and systems under a single framework to enhance transparency, increase accountability and transform the Government work culture and ethics.

Currently, e-Office has been successfully implemented in 457 offices in the state of which 158 are District offices. 19,992 officers and officials are using e-office and correspondence is carried out through 793516 e-office files with 44,74,446 receipts.

12629 officers and officials were trained on capacity building of which 65% constitute taluk and district level officers/officials and 35% constitute Secretariat, Boards, Corporations and Head Offices.

 

E-Par: The Electronic Annual Performance Appraisal Report (SPARROW) is an online system based on the comprehensive performance appraisal dossier that is maintained for each member of the Service by the State Government/Central Government. The aim of this system is to facilitate the electronic filling of PAR by officers in a way that is not only user friendly but also allows to fill from anywhere anytime as per their convenience. Similar convenience will be available to the officers at different Stages in the workflow hierarchy of filling and submission process. The system is also expected to reduce delays in submission of completely filled PARs. 20,073 e-par during 2018-19 and 15842 e-par during 2019-20 were generated.

 

9. Capacity Building: Government of Karnataka is in the forefront in initiating and implementing successfully several e-Governance projects of national importance in order to improve delivery of public services. Imparting of specialized training and enhancing the knowledge, skills of the employees in various facets of e-Governance and ICT is envisaged. The Department is providing consultants to other Departments for the implementation of e-Governance initiatives. For this purpose State e-Mission Team (SeMT) is established in the Department and it is interacting with other Departments.

 

Future Plan (Up to March-2021)

• It is Proposed to conduct e-initiatives training programs at all District Training Centers in coordination with ATI, Mysuru up to March-2021. (Programmes started).
• More than 3,00,000 Government employees will be taking online Computer Literacy Test.
• e-Procurement trainings will be conducted for nearly 1,000 vendors and various departments officers and Government employees.

 

10. Kannada Computing: Hon'ble Chief Minister has announced Kannada Computing Project in 2015-16 budget. In this regard “e-Kannada Workshop” was organised on 2019-20 approved the following projects. e-Kalika Kannada Academy was established in 2020 to develop a Digital platform to practice Science and Technology through Kannada language and for non Kannadigas to learn Kannada. e-Kalika Kannada academy digital platform is in the final stage of development. As regards PadaKanaja and Desikarana, it is already in the final stages of bringing various Glossary and dictionaries in single digital platform.

Technical Standards for Kannada: Government Order comprising of 29 standard list, has been issued in order to follow the standards while developing software related to kannada. For all these programmes 2019-20, has been utilized as against the allocation of Rs.52.00 lakhs.

 

11. State Scholarship Portal (SSP): An Integrated State Scholarship Portal (SSP) is developed by Centre for e-Governance, Government of Karnataka for sanctioning of Pre-Matric & Post-Matric Scholarship under various Schemes of Government of Karnataka. SSP directly transfers the amount to Aadhaar Seeded Bank Account of the Student.

 

12. Direct Benefit Transfer (DBT): Direct Benefit Transfer is a major reform initiative to re-engineer the existing delivery processes of Government using IT. Vision of DBT enables department to transfer benefits directly into Aadhaar seeded bank accounts of accurately targeted beneficiaries. DBT is intended to resolve the issues related to wrong inclusion/exclusion of beneficiaries, inaccurate beneficiary identification and unreliable database which resulted in fakes, duplicates and nonachievement of objectives. DBT will improve targeting, plug loop holes etc.

 

As on today 89 schemes pertaining to 20 departments have been on-boarded on to the DBT platform. The Major Schemes which have been on-boarded are Scholarship Schemes, Minimum Price Support schemes, PM-Kisan State Scheme, CM-Relief Fund, Housing Schemes, Milk Incentive scheme. During the FY 2019-20 Rs.5280.78 crores were disbursed through this platform to 2.47 crores beneficiaries. Cash Benefit of COVID-19 relief package under various scheme were transferred to the beneficiary's Aadhaar seeded bank account using this DBT platform.

 

 

13. Family ID: As per the announcement of the budget speech 2018-19 e-Governance department has taken up Family ID project creating Golden Records of all the members of the family taking family as a unit. Family ID will be created to provide different familyoriented facilities by extending PDS data bank. This is useful for housing facility, health insurance, student scholarship, programmes of different departments, widow pension etc. This system is useful for the citizens to get benefits of different programmes or subsidies automatically without submission of application. As against each citizen Family ID Golden record, their personal information (Name, Date of Birth, Education, Gender, Occupation, Gender) and family information (Caste, Income, Land, House, etc.,) is connected by integrating database of various Departments. Ration card number is the Family ID number. For those citizens who does not have Ration Card, facility to create Ration Card has been provided in both Aahara and Seva Sindhu portal.

 

Family ID helps Government to identify eligible citizens for efficient planning and implementation of schemes. Helps in creating automatic entitlement based system by which Departments can prepare list of eligible beneficiaries on their own and make Aadhaar based payment. It helps to weed out ineligible beneficiaries thus saving expenditure to the Government. Helps in finding out families/citizens not covered by Government schemes. FID can make Impact assessment of benefits due to potential policy change. Family ID data enables annual verification of Pensioners and issue life certificate on the basis of “Live photo” thus overcomes the dependency on biometrics. Government can connect to people during natural calamities/ make announcement of new policy using mobile numbers available in Family ID database. At present the process of integrating verified data from various Department database is under progress. Government intends to implement this project by beginning of next Financial year.

 

14. Farmer's Registration and Unified Beneficiary Information System (FRUITS): “FRUITS” is an e-Governance initiative to have common database facilities for Registration of farmers, and other beneficiaries who wants to avail benefits from the Government. It also facilitates various departments in providing assistance to the beneficiary by connecting to DBT portal and therefore also acts as a repository of benefits provided. “FRUITS” is aimed at bringing departments like Agriculture, Horticulture, Sericulture, Animal Husbandry & Veterinary Sciences, Fisheries, Backward classes and Social welfare on to single platform.

“FRUITS” helps in Registering Farmers and non-farmers and provides a unique ID. The Registration is once in life time activity, as a result beneficiary need not carry his/her documents to each department and for every scheme. Benefits given to a person can be tracked using Registration ID which is mandatory for all the departments to capture before providing benefits. This would not only stop multiple benefits reaching same beneficiary but also helps in comprehensive growth.

 

“FRUITS” is integrated with state DBT portal and through DBT portal it is also integrated with Khajane II (K2) Financial Management System. Facilities provided under FRUITS are:

1. Beneficiary Registration.

• Facility for departmental hierarchy to register and approve (Maker-Checker concept).
• Facility to citizen to register himself online and choose department to get approved.

1. Modifications to existing data.

• Facility to department hierarchy to modify the registration details.
• Facility to add land parcels to an existing farmer.

1. FRUITS connects to DBT portal (of e-Governance department) and eases out the process of integration with K2 by individual departments and also avoid creating recipient ID for individual beneficiary.
2. Facilitates data exchange with different departmental application to maintain common beneficiary database.
3. Online registration for availing benefit.

• Beneficiary can register their request for availing benefit for a scheme under any of the stake holding departments.

1. FRUITS is connected to crop survey data base and crop details are also available.
2. Tills now more than 65 lakh citizens have been registered in FRUITS
3. Major beneficiary schemes where benefits were provided to beneficiaries through FRUITS.
   • PM KISAN State Contribution.
   • Financial Assistance to Maize growers under Covid-19 relief.
   • COVID-19 Relief Assistance to Flowers, Fruits and Vegetable Growers (Comprehensive Horticulture Development).
   • National Food Security Mission.
   • MSP for Tur (MARKFED), Ragi, Paddy, Maize, Jowar, Groundnut, Green Gram & Horse Grams.
4. Karnataka Open Data Initiative (KODI): This project aims to utilize the Open Data Architecture that enables efficient and transparent governance and strengthens democracy by systematically recording, archiving, making available all data generated by public funds into a publicdomain. In the current year, the state data policy on Data sharing and Open Data would be framed and the data sets of state departments would be published on the Karnataka instance of the Open Data platform of Government of India.

 

CeG is in the process of finalizing the Karnataka State Data Policy. Currently CeG is working with Planning and RDPR department to identify and upload data on the KODI website. More departments will be added in due course.

 

16. MyGov: It has been decided to launch the Karnataka instance of MyGov portal. Project Monitoring Unit (PMU) has been established in Centre for e-Governance and the said PMU would be working directly under monitoring and supervision of Chief Minister's office. The PMU would handle the day to day activities while Centre for e-Governance would provide the technical support including hiring of resources. It has been decided to launch the Karnataka instance (https://www.karnataka. mygov.in) in Kannada and English. And a steering committee is formed under the chairmanship of ACS to CM to monitor the MyGov Karnataka Project.
17. RTI Online: The State has launched an RTI Online portal on 04-02-2020 exclusively for accepting, appeal and disposal of applications through the Right to Information Act 2005 in the same format as Central Government. As per the government order the RTI Online project was handed over to the Centre for e-Governance by the Department of Personnel and Administrative Reforms on 11.11.2020. The following eight departments have been brought under the scheme.
18. Department of Revenue.
19. Department of Personnel and Administration Reform.

• Department of Public Works.

1. Department of Food and Civil Supplies.
2. Department of the Interior.
3. Department of Urban Development.

• Department of Rural Development.
• Home Department.
• 516 officers and staff have been trained in the first phase to implement the RTI Online system effectively.
• More than 8,675 public information officers have been identified by 08 departments, and necessary steps are being taken to extend them to all departments of the state government.
• More than 3959 applications have been received through the software, 2074 applications have been disposed and 1885 applications are in the process of being disposed.
• The project will play an important role in increasing transparency in governance so that the public can access the information easily.

 

18. Crop Survey: In Karnataka, estimation of Crop Area Statistics was earlier done manually by Agriculture, Revenue, and Irrigation Departments together. The manual survey at times did not give accurate picture. Therefore, there was a need to bring in a system for effective capture of survey/ sub survey number wise crop information.

During the year 2017, to alleviate the problems of data collection and accurate data availability, the State Government decided to take up Crop survey work using mobile software application developed by the DPAR (e-Governance) with the help of officials of the Revenue, Agriculture, Horticulture and Sericulture departments. Later in the 2018-19, the crop survey was conducted during Kharif season using educated youth (private residents-PR) of the village using the mobile application. Since 2019-20 the Crop Survey is being conducted by the Department of Agriculture in collaboration with the e-Governance Department using the Mobile App. In 2020-21 both farmers and private residents are involved in crop survey.

 

The Government is providing Rs.10/- as remuneration to the Private Residents to conduct a crop survey in a plot. However, if more than one crop surveyed in a single plot additional remuneration is provided. In total the government is paying maximum of Rs.20/- for each plot based on the number of crops in that plot to the private residents.

 

Wide publicity has been given through posters, radio, television and newspapers about crop survey. Training has been provided to PRs and Supervisors through video conferences at state level and by Master Trainers at Taluk Level. The DPAR (e-Governance) has also developed the Bele Darshak App to allow the farmers to view the details of the crop survey of his plot and raise their objections if any about the crop survey. The objections raised by farmers about Crop survey are disposed off by the Departmental Officers appropriately.

 

1. Uses of data collected under Crop Survey Project:
2. Crop area enumeration by DES (Agriculture and Horticulture).

• Input subsidy.

1. Crop Insurance scheme.
2. MSP operation.
3. Sanction of beneficiary oriented schemes of Agriculture and Horticulture based on parameters.
4. Karnataka State Web Portal (KSWP): Karnataka Web Portal of Government of Karnataka is an integrated solution project providing a single point of information and interaction, for all citizens, visitors and businesses. The websites of various Departments are enabling the Government to bring G2C, G2G and G2B services to the citizens and external agencies. Activities of Web Team are as detailed below:

• Guidelines have been created with an objective to make the Karnataka Government Websites conform to the essential pre-requisites of Usability, User-Centricity and Universal accessibility.
• Till date, the Web Portal team has hosted 193 Government of Karnataka Websites related to various Secretariats, Departments, Boards, Corporations and the Government Agencies and another 190 websites are under the progress of being upgraded.
• The Web Portal Team has provided training to about various Government Department and Agencies. Till date about 332 training sessions have been conducted by Centre for e-Governance.
• Commonly acceptable Domain Name Service (DNS) has been adopted to ensure departments establish their online identity.
• The team is responsible for developing a new API based dashboard for COVID-19 and reports for the same.
• Web Portal team has developed and designed a new DULT website and DULT-SUTF application for the Directorate of Urban Land Transport.
• The team has Developed Karnatakaguest application for DPAR-AR used for maintenance of VIP visitor database.
• Web Portal team also developed a new Application for National Urban Livelihood Mission (NULM).
• Few of the websites that are redesigned and revamped include:

1. APPSTORE - An umbrella website to notify all government-related websites to its citizens. (Till date 115 Apps have been added).
2. Redesign and revamp of the Mysuru Palace website.

• New video manuals have been created to assist people in using our CMS. This apart, PDF manual exists both in Kannada and the English language.
• The team has also developed e-office citizen portal to help citizens to followup on their applications status online.

 

20. Karnataka Government Secretariat LAN (SECLAN): The Administrative Department offices in Vidhana Soudha, Vikasa Soudha and M.S Building are provided with Local Area Network enabling various departments to access high speed internet and intranet based applications for better and efficient governance. At present there are 5784 nodes present in the LAN. Considering the strategic importance of network, action has been initiated by CeG to upgrade the existing SecLAN network to a robust, reliable and secured wireless based SecLAN 2.0 network at the approved budgetary cost of Rs. 30 Crores.

 

21. Bharat Net: Government of Karnataka is planning to setup Karnataka Optical Network under Bharat Net which aims to connect all the Government offices spread across the state upto Gram Panchayat Level. The Center of e-Governance (CeG), Government of Karnataka, is in the stage of preparing a Detailed Project Report (DPR) for setting up Bharat Net and for this, CeG has engaged PWC as consultant to draft DPR. At present the works on estimating the project budget is under progress.

 

MINING AND MINERALS INDUSTRIES: During the year 2020-21, upto the end of November-2020, the department has granted 107 Quarry leases for building stone and other minor minerals and 27 Ornamental Granite Quarry leases.

There are 2871 Quarry leases for Building Stone and other minor minerals and 531 Ornamental Granite Quarry working leases in the State. Further, in the current year. The Department of Mines and Geology has realized revenues of Rs.1647.09 crores as against the target of Rs.2291.40 crores up to October-2020 and as against the annual target of Rs.3750 crores for the year 2020-21.

 

STATUS OF PUBLIC ENTERPRISES IN KARNATAKA

Karnataka State Small Industries Development Corporation (KSSIDC): Karnataka State Small Industries Development Corporation Limited (KSSIDC) promotes the development of Small Scale Industry (SSI) sector by providing Industrial Sheds, channels for Procurement and Distribution of Raw Materials and Management Guidance to MSME entrepreneurs. The Corporation has a network of 09 Raw Material Depots for the distribution of required Raw Materials to MSME Units in the State. It has also obtained the lands in and around Bengaluru and also in other Districts for the construction of sheds and for the development of plots as per the demand from MSME units.

 

• The Government of Karnataka has recently announced the New Industrial Policy 2020-25 according to which the K a r n a t a k a I n d u s t r i a l A r e a s Development board has to allot land in the Industrial Areas being developed by it to KSSIDC for establishment of Industrial estate and thereafter the corporation shall form suitable plots for the MSME sector and allot the same to the needy entrepreneurs. Accordingly the corporation has already requested K a r n a t a k a I n d u s t r i a l A r e a Development Board for allotment of suitable land in various places throughout the State for establishment of industrial estate. Further, as per the announcement made in the budget speech of the year 2018-19 KIADB requested to allot suitable land to establish 11 New industrial estates.
• Further as proposed in the earlier industrial policy 2014-19 of the Government of Karnataka a proposal for purchase of the land directly from the land owners to extent of 50 acres and above at the same place under section 109 of the Karnataka Land Reforms Act 1961 is already made seeking with the approval of revenue department for direct purchase of land from the farmers and necessary proposals is already sent to the Government and approval of the Government is awaited.

 

• Further the Government of Karnataka has recently released the new industrial policy 2020-25 which envisages development of rural industrial areas to the MSME sector with essential infrastructural facilities by KSSIDC and development of at least 100 and 150 plots with an area 2000 to 10000 square feet in the industrially potential areas. In this regard, a proposal is already made to Karnataka Industrial Area Development Board for allotment of suitable land in various places of the state and in industrial areas being developed by KIADB.

 

• Likewise with a view to encourage the MSME sector in accordance with the scheme of the corporation to establish industrial estates in every District and Taluka centres of the state proposals have been sent to the concerned Deputy Commissioners/Tahasildars for allotment of at least 10 acres of land for the said purpose and a response is awaited.

 

• After necessary response is received to the proposals sent by the corporation and after allotment of necessary land the corporation will subject to the financial resources of the corporation, demand for industries in the respective places, and keeping in mind the feasibility of establishment of industrial estate will ensure prospect of industrialization emphasized in the industrial policy 2020-25.

 

In the last few years, the Corporation is playing a key role in the development of MSME. Sector in terms of establishment of New Industrial Estates, Upgradation of basic infrastructure in the existing Industrial Estates by introducing various entrepreneur friendly measures both in Industrial Estate and Commercial Activities. KSSIDC. has been continuing to serve the MSME units in the State by procuring and distributing various Industrial Raw materials required by them like Iron & Steel, Coal, Cement, Paraffin Wax etc., through its 9 raw material depots throughout the State. Since KSSIDC is procuring & distributing various industrial raw materials, this has helped the MSME units in getting good quality of raw materials at reasonable prices. This has acted as a deterrent to the Private Traders from exploiting the MSME units. KSSIDC has been extending 30 days interest free credit facility to the MSME units for purchase of raw materials through KSSIDC raw material depots against Bank Guarantee. Also under the provisions of MOU executed between Karnataka State Financial Corporation and KSSIDC, M/s. Karnataka State Financial Corporation is extending Rs.100 lakhs Financial Assistance per unit / per year to the MSME. Sector for purchase of Industrial Raw Materials under line of credit. This has helped the MSME units to meet their raw material requirements immediately without arranging the funds.

 

Due to severe competition, the prospects of improving the sales of raw materials through KSSIDC are not encouraging. KSSIDC found it difficult to achieve the sales target for 2018-19 and 2019-20. During the current year upto November 2020, 2412 tonnes of Iron & Steel have been sold to MSME enterprises. However, efforts will be made to achieve maximum possible sales target through KSSIDC Raw Material Depots during 2020-21.

 

Karnataka State Industrial Area Development Board (KIADB): In order to facilitate land acquisition activities for industrial development, Stalls has introduced a land-sharing scheme. KIADB acquired lands, wherein about 9583 sq.ft. of developed land will be provided to the land owner in lieu of land compensation fixed for one acre of land acquired.

 

Karnataka State Electronics Development Corporation Limited (KEONICS): preferred destination for companies looking to offshore their Information Technology (IT) and back-office functions, due to the metropolis natural and strategic advantages coupled with the support extended by the Government of Karnataka to the IT industry in the form of allotment of land at concessional rates, IT infrastructure and other tax incentives to the IT Entrepreneurs. Further, the industry has its low-cost advantage and is a financially attractive location when viewed in combination with the business environment which the State offers, and the availability of skilled people. Further, a number of India's top technology firms have their strong base in the Silicon Valley of India, i.e. in Electronic City, Bengaluru. These IT majors have a decisive role in IT Exports and instrumental in regularly achieving and substantial growth.

In order to ensure that the fruits of the IT revolution are obtained in all regions of the State and to encourage the local entrepreneurs to set up their business units, the Government of Karnataka has taken a series of measures to establish IT Infrastructure/IT Parks in the Tier-II Cities. To supplement the measures taken in this direction, the Government entrusted the Karnataka State Electronics Development Corporation Limited (KEONICS) with the responsibility of setting up IT Parks in Tier – II Cities in the State and done the role of a nodal agency to provide necessary IT Infrastructure and support to the IT Industry and the entrepreneurs in the State. Services extended by the corporation is as detailed below.

 

• IT Services: Company has undertaken many projects of providing and programming of IT software and e-governance projects to various Government Departments and other States. Company is also marketing computer hardware, software, e-tendering services, various electronic and IT equipment's, LED lights, solar LED street lights, surveillance cameras, etc., to various Government Departments / Organizations of Government of Karnataka and other States. Besides, the Company continues to provide consultancy on project implementation to various Government Departments in the areas of Networking, Web Creation, Software Development and Computerization plans.

 

• IT Education Services: IT Education Division is playing a vital role in taking the benefits of IT to rural Karnataka. Company has a network of around 190 franchise training centers throughout Karnataka. The Company is conducting training programmes starting from Basic, Job Oriented, Professional and High End training courses across the State from Hobli, Taluka and District level. Company has also taken up computer training programme and computer literacy on-line test to the Government employees.

 

• Manpower Supply Services: Apart from pursuing the main activities of the Company, the Company has been engaged in the business of providing skilled Manpower services to various Government Departments, Boards and Corporations.

 

Infrastructure Development

 

Electronics City: Company has set up Electronics City on a sprawling 332 acres of land on Hosur Road, Bengaluru. This Electronics City is today a major hub for Information Technology activities. KEONICS is actively involved in establishing IT Parks in Tier – II Cities in the State such as Hubballi, Kalaburagi, Shivamogga, Mysuru and Mangaluru. The progress made in this direction is as under:-

 

• IT Park, Hubballi: The State has established IT Park in Hubballi in 2,75,000 sq.ft. built up area with a total investment of Rs. 42.36 crore. The Government has offered additional incentives including providing work space at concessional lease rentals to prospective entrepreneurs to utilize the space available for establishing IT and IT enabled businesses in the Complex. KEONICS has been entrusted with the responsibility of maintaining the IT Park Complex at Hubballi.

 

• IT Park, SEZ, Shivamogga: The State has announced the establishment of IT SEZ and IT Park in Non-SEZ areas in Shivamogga. KEONICS has been mandated to establish and develop IT-SEZ and IT Park in KIADB Industrial Estate, of Shivamogga, Bhadravathi Highway. Out of 33 acres land available 6 acres had been allotted to SEZ entrepreneurs.

 

• IT Park Non-SEZ Shivamogga: Out of 33 acres of available land 5 acres utilized for establishment of IT Park, Shivamogga (NonSEZ) at a construction cost of Rs. 16.10 crore. It has 70623.11 sq.ft area of which 66788.73 sq.ft. has been allotted to entrepreneurs. The IT Park is being maintained by KEONICS.

 

• IT Park, Kalaburagi: KEONICS has taken up IT Park project in Kalaburagi in an area of 1.72 acres of land with a built-up area of 53000 sq.ft with a construction cost of Rs. 9.19 crore. The construction of the IT Park Complex 1st Phase has been completed. This park consists of Ground + four floors measuring 33552.486 sq.ft which are allotted to entrepreneurs & four incubation centers are also established.

 

Department of Factories, Boilers, Industrial Safety and Health: Department of Factories, Boilers, Industrial Safety Health is associated with the responsibility of ensuring occupational safety, health and welfare of the workers in the registered factories and at construction activities of above 25 crores investment through effective enforcement. The State of Karnataka is having 16,991 registered factories with 16,92,494 workers and there are 5264 registered Boilers. Taking into consideration the volume of storage of hazardous chemicals, there are 80 Major Accidents Hazardous Factories in 20 districts in the state. Special and effective importance is given at the time of inspection to avert any possible accidents and disasters. There are about 1418 factories having hazardous manufacturing process and effective inspections are conducted to avoid possible accidents. 3619 inspection were conducted and 71 prosecution cases were booked. During 2020-21, 65 boilers are registered 2546 boilers were inspected of the total 5264 boilers.

 

Karnataka State Financial Corporation (KSFC):

Industrial Finance: Karnataka State Financial Corporation (KSFC) is a State Level Financial Institution established in 1959 to cater to the long term financial needs of Micro, Small & Medium Enterprises (MSMEs) in the State. KSFC takes pride being pioneer in serving MSMEs of industrial and service segments in the State for the past 61 years. The cumulative Gross Sanctions of the Corporation reached 17,884.72 crore covering 1,74,217 cases as on 31.3.2020. Since inception upto the end of March 2020, 30.922 cases promoted by Women Entrepreneurs were assisted to an extent of Rs. 4243.67 crore, 21,698 cases promoted by Scheduled Caste & Scheduled Tribe Entrepreneurs were assisted to an extent of Rs. 2,099.62 crore and Rs. 1,322.19 crore was sanctioned to 19,259 cases promoted by Entrepreneurs belonging to the Minority community.

 

Major Achievements 2019-20

• Recovered Rs. 720.85 crore, Rs. 667.81 crore was sanctioned and Rs. 727.90 crores disbursed.
• Earned a net profit of Rs. 44.92 crore.
• The Standard Assets of the Corporation reached to Rs. 1996.77 crore.
• The net NPAs stood at 5.12%.
• The Government of Karnataka provided an equity capital of Rs. 100 crore and interest subsidy support of Rs. 71.50 crorefor the following Entrepreneurs.

 

Scheduled Caste Entrepreneurs Rs. 39.50 crore

Scheduled Tribes Entrepreneurs Rs. 12 crore

First Generation Entrepreneurs Rs. 2 crore

Women Entrepreneurs Rs. 10 crore

Interest Subvention Rs. 8 crore

 

COVID-19 Measures: In the wake of COVID-19, as per the directions of the Reserve Bank of India, the Corporation extended time to its borrowers to repay the Principal & Interest instalments as detailed below:

 

• The principal instalments falling due between April 2020 up to August 2020 is extended and the same has to be repaid.
• The Interest instalments were not demanded between April 2020 to August 2020. These instalments were demanded along with the September 2020 instalment.
• During this period, the Corporation did not charge any compound interest or penal interest.
• As per the RBI guidelines, funding of interest is taken up wherever requested.
• In addition to this, the Corporation has also reduced its Interest rate from 14% p.a. to 12% p.a. effective from 1st August 2020 for fresh sanctions.

Performance of the corporation during the FY: 2020-21(up to Nov 2020): During the FY:2020-21 (April to November 2020) the Corporation assisted 190 cases to an extent of 129.97 crore, disbursed 223.88 crore and recovered 338.58 crore.

 

Karnataka State Industrial Investment & Development Corporation (KSIIDC): KSIIDC, established in 1964, has been greatly instrumental in the industrialization of the State, especially in the large and medium sector. KSIIDC has stopped financial lending activity since October 2002 onwards. At present, recovery of the past lending/advances and loans and disinvestment of equity are the main activities. However, certain Investments as per the directions of Government of Karnataka are being made from time to time. KSIIDC continued its proactive role in the promotion of infrastructure projects on Public Private Partnership model and its role as nodal agency for Bengaluru International Airport Project. Duly noting the initiatives taken up by KSIIDC in the infrastructure sector, the name was changed to “Karnataka State Industrial and Infrastructure Development Corporation Limited” with effect from 2010.

 

As the nodal agency of the State Government, KSIIDC has initiated activities for the development of the following projects.

 

• Expansion of the Bengaluru International Airport.
• Development of Bengaluru Signature Business Park.
• Development of Airports, Airstrips and Helipads & Water Aerodromes.
• City Gas Distribution Project for Bengaluru.
• Comprehensive Integrated Infrastructure Development Project related to Fisheries, Ecology & Tourism etc., at Tadadi.

The KSIIDC recovered an amount of Rs. 62.94 crores during 2020-21 upto November 2020.

 

Department of Public Enterprises: Government of Karnataka had established the Karnataka State Bureau of Public Enterprises in the year 1981. Later on, in the year 2002 this Bureau was converted as The Department of Disinvestment and Public Enterprises Reforms. The main aim/object of this department is to take decisions in matters relating to disinvestment, restructuring, amalgamation etc. In the year 2005 Government had accorded independent status to this department and re-named it as The Department of Public Enterprises. This department is vested with the responsibility of monitoring, regulatory, evaluator and advisory functions for the betterment of the Enterprises.

 

The 60 State Level Public Enterprises in Karnataka are grouped into various sectors like Agriculture, Horticulture, Animal Husbandry, Energy, Housing, Transport, Co-operation etc. While more than 37 Enterprises are profit making once. State Public Sector Undertakings play a key role in the socio-economic development of the State. Their mandate is primarily development and welfare oriented with the objective of assisting the Government in better governance and to provide requisite services. In keeping with their mandate, it is imperative that systems and structures be put in place to enhance their efficiency, streamline their efficacy and optimize their output to enable them to cope with a highly competitive and fast changing environment. Hence, the Department sponsors Evaluation of PSU's from reputed institutions in order to enable the loss making PSU's to move towards profit.

 

In order to update knowledge and skill, the Department also conducts Management Development and Training programmes to the officers and officials working in the PSEs which aim at improving the performance in the areas of productivity, marketing, finance, Human resources, administration, industrial regulations, environment and ecology, industrial safety etc, through various recognized institutions. A total of 11 training programs conducted on various subjects have been undertaken during the year 2019-20.

 

Further, in order to recognize, motivate and appreciate the best performing Public Sector Enterprise, this Department gives Annual 'Chief Minister's Ratna Award' for the best performing Public Sector Enterprises, every year. Five selected public enterprises were awarded a cash prize of Rs.30 lakhs each in the year 2019-20.

 

INDUSTRIAL POLICY INITIATIVES AND INDUSTRIAL INVESTMENT: The State Government now intends to consolidate the strategies and achievements made so far by providing adequate infrastructure support with attractive enhanced incentives and improved facilitation mechanism coupled with governance reforms. Government of India has come out with the National Manufacturing Policy in 2011 with the objective of accelerated development, inclusive growth and provision of gainful employment. The policy aims to enhance share of manufacturing in GDP to 25% within a decade and create 100 million jobs with appropriate skill sets, increase the depth in manufacturing and enhance global competitiveness.

 

The Karnataka Manufacturing Taskforce (MTF) constituted by the State Government to study the manufacturing sector in Karnataka and suggest interventions to drive growth in the sector in a sustainable and holistic manner, taking into account global trends and existing challenges in the manufacturing sector has given its valuable recommendations and suggestions. It is in this context that the State Government is desirous of formulating a new Industrial Policy to be in alignment with the objectives and goals of the National Manufacturing Policy 2011 and the recommendations of Karnataka Manufacturing Taskforce (MTF) which would enable smooth transition of policy measures for the benefit of investors in the State.

 

The Government of Karnataka has announced the New Industrial Policy 2020- 25, on 13.08.2020. The focus of the New Industrial Policy 2020-25 is to build on the strengths of Karnataka's industry and to enable it to fulfill its role as the engine of growth and to shoulder responsibility of adding more hi-tech value and employment. . There is decrease in the number of Industrial Entrepreneurs Memorandum filed and amount of proposed investment upto October 2020 increased when compared to December period in 2019.

 

Foreign Direct Investment (FDI): The total FDI inflows to the Karnataka State in the 2019-20 was 15% and stands third among 10 Indian States, in terms of quantum of FDI inflows.

 

Karnataka Udyog Mitra (KUM): Karnataka Udyog Mitra (KUM) is a single contact point for all investors who are looking at setting up enterprises/business in Karnataka. As a nodal agency, its role is to facilitate investments & execute initiatives to enable a smooth transition, from receiving an investment proposal to the eventual implementation of the project.

During 2019-20, total 203 projects with an investment of Rs.12,694.27 crores were approved for SLSWCC which created employment to 89270 people. For SHLCC with a total of 16 projects were approved with an investment of Rs.22,413.73 crores which created employment to 10374 people.

 

Major Industrial Policy Initiatives

 

Industrial Policy 2020-2025

 

1. To attract investments worth INR 5 lakh crore.
2. To create employment opportunities for 20 lakh people.
3. To reach third position in merchandise export in the next five years.
4. To maintain an industrial growth rate of 10% per annum.
5. To provide an enabling ecosystem for technology adoption and innovation.
6. Focus on development and promotion of the MSME sector.
7. Facilitate availability of industrial land.
8. Remote tier II and III cities of the state engines of economic growth.
9. Place Karnataka in the forefront of India's international trade.
10. Showcase Karnataka as the "Factory of the Future" industry 4.0.
11. Engage with various stakeholders to develop sector specific skill development strategy.
12. Attract private investment in development of integrated multi sectoral industrial parks and flatted factories.
13. Create an environment to enhance case of doing business in the state. 14. Support R&D & Technology/up gradation.

 

Amendments to Aerospace Policy 2013-23: National Civil Aviation Policy, 2016 & changes in policy pertaining to Defence Sector have brought into focus opportunities for investments in the Aerospace, Defence & MRO sector in India. Industry experts have represented to Government to broad base the scope of the Aerospace Policy 2013-23 to cover the MRO, Civil Aviation etc., and also to match the incentives and concessions offered in other States. In order to bring clarity to the Aerospace Policy 2013-23 & applicability of Industrial Policies 2014-19 and also to broad base the scope of the Policy, the following amendments were brought in to the existing Aerospace Policy 2013-23.

 

• A new para focusing on skills in Aerospace Sector is inserted.
• Incentives and Concessions for Aerospace Sector were available to units coming up in designated aerospace parks in Zone 4 i.e., in and around Bengaluru – in order to encourage investments in Aerospace Sector, which is a specialized sector, the incentives are proposed for investments coming up in Zone 4 including units coming up even in other than designated parks.

Besides, State has sector specific policy like Textile Policy, IT & BT Policy, Electronics and Semiconductors, Tourism Policy, Integrated Agri Business Policy, Solar Policy and infrastructure Policy.

 

Highlights of Strengths and Incentives Offered for Various Sectors

 

Biotechnology

• Bengaluru is the number 1 biotech hub in India with revenues of 1.18 bn in 13-14.
• Biopharma is the biggest segment of biotech industry (~60%).
• Karnataka contributes to around 1/3rd of the BT exports of the country.
• It is home to over 50% of the country's Biotech companies.
• Bio-Ventures Fund and Bio Innovation Centre being established with state of the art laboratory facilities.
  Fund of INR 50 crore in partnership with a VC firm. l Bengaluru Bio Innovation Centre – 25 fully furnished labs to promote innovation driven R & D startups.
• Biotech startups growing at 30% annually in the state.
• First state in the country to bring out biotech policy. 5 Biotech Finishing Schools offering post graduate diploma, Centre for Human genetics conducting courses and workshops for scientists and clinicians, Institute of Bioinformatics and Applied Biotechnology offering courses for PG, M.Sc, and PhD.
• Karnataka has the highest R&D expenditure in south India (3rd in the country).
• Biotech parks being developed.
• Research labs under green category.
• Anchor unit subsidy for first two manufacturing enterprises.

 

Electronic System Design and Manufacturing

• 4th largest producer (contributing 10% to national output) growing at 18% CAGR in 2008 – 13.
• Karnataka is 2nd largest chip design hub in the country.
• Two ESDM clusters coming up with total investment of USD 25 mn (Bengaluru and Mysuru) with facilities like.
• First state to roll out ESDM skill development program, aiming to train 15,000 youth in 5 years.
• Two World class innovation centres for designing, prototyping, testing, characterization and certification (IIITBengaluru and STPI-Bengaluru).
• An upcoming ICT Academy of Karnataka in association with GoI & NASSCOM for industry oriented ICT Skill Development Programs.
• Government of Karnataka in partnership with STPI set up SMART Lab (Semiconductor Measurement, Analysis and Reliability Test Lab), a state of the art lab to test, measure parameters and conduct failure analysis of chips.

 

Animation, Visual Effects, Gaming & Comics

 

• Karnataka is the first state roll out a dedicated AVGC policy.
• Karnataka has presence of prominent players in the AVGC industry.
• Bengaluru based companies have contributed to Oscar winning and many nominated movies
• Presence of bodies like Association of Bengaluru Animation Industries (ABAI) serving as a 'nodal connector' between the industry, academia and government greatly help the sector in the state by incubating, skill development, networking and creating new initiatives. Train the Trainer – Six weeks training program including practical work, activities, individual and group projects to enhance the skills of the trainers.
• Digitalisation of Art Colleges– Digital Arts Training centers being set up in willing colleges in association with ABAI to teach latest skills with a curriculum designed by ABAI experts.
• AVGC Finishing Schools to be set up in the state aimed to raise skill quotient at entry & get students industry-ready and providing skill enhancement of fresh graduates by industry internship & apprenticeship.
• Government of Karnataka has declared development of Digital Media City providing core media services catering to entire value chain of media and entertainment industry.
• Investment Opportunities in upcoming.
• KAVGC Park.
• Digital Media City.
• AVGC Lab.

 

IT and ITeS

• Karnataka is the largest software exporter in India, contributing to 40% of total software export.
• Karnataka is expected to be the largest IT cluster globally by 2020, employing around 2 million people.
• Karnataka is the 4th largest technological cluster in the world.
• Karnataka's IT – BPM revenue is envisaged to grow to USD 90 bn in 2020 from 50 bn in 2015.
• 80% (400) Fortune 500 companies have their outsourcing operations in Karnataka.
• Bengaluru has been ranked 2nd in Global start-up ecosystem growth index by “Compass”.
• ICT Skill Development Society provides an opportunity for industry stakeholders to train personnel for their specific requirements.
• Government of Karnataka /KBITS in partnership with NASSCOM set up the first start up warehouse in the country to provide start-ups with
• The Karnataka's i4 policy aims to increase penetration of sector to other parts of the state. The policy also provides number of incentives to start-ups, SMEs as well as Mega Projects.
• The Karnataka Startup Policy 2015 – 20 shall also help improve the ecosystem by creating incubation infrastructure, fostering partnership between R&D institutions and industry and channelizing innovation for social impact.
• More than 900 acres of land available in various parks and investment zones.
• Karnataka has been an Investor friendly state with many flagship projects undertaken in partnership with private sector under the PPP model.
• Bengaluru International Airport which is now the third largest and one of the most preferred airport in India was done in partnership with GVK.
• Karnataka is flag bearer in terms of pioneering PPP models such as Hybrid annuity models. Number of other success stories in urban water supply, bus station developments transport and industrial parks.
• Recently approved Infrastructure Policy gives clarity on the procurement models for various strategic infrastructure projects which include new capacity creation as well as operations and maintenance of existing infrastructure.
• We have many flagship infrastructure investment projects where we look forward to partnering again with reputed investors.
• Roads – In roads sector we have identified 23 projects with more than 1900 km opportunity under KSHIP and KRDCL with total investment opportunity of Rs. 4600 crore.
• Water – To ensure sustainable water supply for urban centers, we are binging Integrated water supply and water recycling projects with a INR 125 crore of investment opportunity
• Ports – We have more than 330 km long coastline which we want to develop for maritime trade. We have identified p o t e n t i a l P o r t D e v e l o p m e n t opportunities at Tadri, Belekari, Karwar and other ports of western coastline.
• Airports – We want to improve regional connectivity within our state with development of airstrips, helipads and regional air-travel and air-taxi services. There are multiple urban centers such as Mysuru and Hubballi Dharwad, attractive tourist destinations such as Coorg Valley and Chikkamagaluru which can be connected with Bengaluru through NON-SCHEDULED Air Taxi services. We are inviting investors to take advantage of GoI Regional Air Travel policy initiative and our own air strip development programme to invest in this lucrative sector.
• Industrial Infrastructure – Karnataka is focusing on development of manufacturing sector within the state by creating holistic ecosystems for nurturing investments in industrial projects. Karnataka is home to two major industrial corridor initiatives, the Chennai-Bengaluru-Chitradurga Industrial Corridor and Bengaluru Mumbai Economic Corridor under which 9 world class industrial townships will be created with help of investments from Government of India and multi-lateral agencies such as JICA. Other industrial parks focused on Agri-Business and Food processing such as Sea Food Park in Mangaluru and IT-BT parks across the states are being planned which present investment opportunities to develop these industrial parks on a PPP basis.
• Urban Infrastructure – The DabholBengaluru gas pipeline presents a unique opportunity for the state to build City Gas Distribution network in multiple urban centers. The first investment opportunity in this sector is presented in the Bengaluru with a 1583 inch-km plan over 5 years to further cover Bengaluru Urban and Rural districts completely in next 25 years. The first phase investment requirement is Rs. 750 Crore which can benefit over 1.5 lakh domestic customers.

 

Agri Business and Food Processing

 

• Karnataka is the leader in horticulture and floriculture business. The state is the largest exporter of Gherkins and Flowers in the country.
• Karnataka is R&D hub of the country with 5 national level R&D institutes in Agriculture and Horticulture.
• Karnataka is leading the country in sector reform, being the first state with unified platform for commodity trade (ReMS) and to have unveiled dedicated Agriculture and Wine Policy.
• Karnataka is the Coffee Capital of India producing 70% of India's output.
• The state has revealed Karnataka Agribusiness and Food Processing Policy 2015, focused towards sustainable development for the entire value chain of Agri Business and Food Processing Sector. The policy declares the state as a single zone, providing incentives uniformly.
• There is opportunity in Karnataka to invest in new farm technology like solar powered pumps, drip and sprinkler irrigation and also in organic farming and cold chains.

 

Automobile & Auto Component

 

• Karnataka is home to 7 major OEMs and more than 50 auto component manufacturers.
• Karnataka is the 4th largest automobile producing state in the country, contributing 8.5% to the national output in the sector.
• Automotive is one of the focus sector identified in the Industrial Policy 2014 – 19. The state has proposed initiatives like 'Karnataka Automobile Research & Innovation Centre and creation of FTWZ for engineering sector in the policy to further strengthen Karnataka's position in the sector. The policy provides additional package of incentives Ultra Mega (INR 500 – 1000 crore) and Super Mega (> 1000 crore) projects in automotive sector.
• Karnataka has a huge local market with more than 14 million registered vehicles in the state and connectivity to four of the top five automobile markets in the country, creating potential for automobile and component manufacturers to grow.
• Land bank of more than 19000 acres across the state. The Industrial Policy 2014 – 15 provides higher quantum of incentives for units in backward parts of the state, promoting inclusive growth of the state.

 

Machine Tools & Heavy Engineering

 

• Karnataka is the second highest producer of Special Purpose Machinery and Heavy Electrical Machinery in the country.
• Karnataka is the only state among the top five capital goods producing states to produce more special purpose machinery than general purpose machinery (in terms of value), clearly showcasing state's capability in manufacturing high value products.
• Karnataka is the leading state in Machine Tools industry with Bengaluru is alone producing 60% (in terms of value) of the machine tools in the country.
• India's first Integrated Machine Tool Industry Park was set up near Bengaluru in an area of 300 acres by India Machine Tools Manufacturing Association.
• Advanced Machine Tool Testing Facility (AMTTF), a state-of-art equipment facility at the Central Manufacturing Technology Institute (CMTI), was jointly established in Bengaluru by machine tool industry and DIPP, Government of India.
• Land bank of more than 19000 acres across the state. Machine Tools is identified as a focus manufacturing sector in Industrial Policy 2014 – 15. The policy provides additional package of incentives Ultra Mega (INR 500 – 1000 crore) and Super Mega (> 1000 crore) projects in Machine Tools sector.
• The upcoming Chennai Bengaluru Industrial Corridor and Bengaluru Mumbai Industrial Corridor shall create a conducive environment for the manufacturing industries in the state by improving connectivity & logistics.

 

Aerospace and Defence

 

• Karnataka is the undisputed leader of the country in the Aerospace and Defence sector producing quarter of India's aircraft and spacecraft.
• The state has a strong base of lower tier suppliers with more than 2000 SMEs which execute niche sub-contracting work for the defence PSUs creating a strong ecosystem in the state.
• Karnataka contributes 65% to aerospace related exports from the country.
• With increase in national defence budget and increasing demand of civil aviation globally, Karnataka is in unique position in the country to leverage this potential growth in the sector. India's first aerospace SEZ is operational at Belgaum.
• More than 950 acres has been earmarked for aerospace SEZ near Bengaluru International Airport.
• Karnataka has the advantage of presence of number of top companies in IT/ITeS and electronics hardware, many of them being integrated in supply chain of integrated sector.
• Karnataka's the first state in the country to roll out a dedicated Aerospace Policy to boost the sector in the state by providing sector specific incentives and propose tailor made initiatives for the sector.
• Incentives and concessions like anchor unit subsidy, exemption from stamp duty, concessional registration charges, exemption from electricity duty (duration depending on the size of the project), entry tax exemption, etc.
• Special package of incentives & concessions shall be provide to large, mega, ultra-mega and super-mega projects on case to case basis.
• Establishment of Bengaluru Aerospace Park and Bengaluru Aerospace SEZ containing facilities like manufacturing, SEZ, MRO with direct access to BIAL runway, Testing Center, Hardware/ embedded technology center, technology innovation center including a certification/calibration center, a common finishing facility and housing.
• Develop Greenfield airports at Shivamogga, Vijayapura, Hassan and Kalburgi through the PPP model.

 

Textiles & Apparel

• Karnataka is the garment capital of India accounting for 20% of national garment production valued at USD 1.56 bn.
• The state has abundant availability of raw material. Karnataka contributes 65% to silk, 12% to wool and 6% to cotton production of the country.
• Karnataka has 144 skill development centers and 168 private training centers which have trained more than 1,60,000 personnel to date.
• The state exports readymade garments to countries like the United States of America (USA), the United Kingdom (UK), Italy, Germany, Western Europe, Hong Kong, Turkey, Canada and Australia.
• The state is keen to emerge as a leader of Technical textiles (Builtech, Clothtech, Hometech, Meditech, etc.) with Mysuru, Hassan and Bengaluru being growth beds of Technical Textiles. The state has already attracted investments worth INR 1480 crore in the segment.
• The new Textile Policy-Nuthana Javali Neethi 2013-18 aims to strengthen the value chain, attract more investment across the state, develop skills of the manpower and infrastructure for the sector.
• Zone dependent reimbursement based fiscal incentives.
• Support for development of common infrastructure in Greenfield textile parks and common facilities in Brownfield clusters l Support for setting up Specific Textiles Zones in backward areas.
• Reimbursement based incentives for mega projects.

 

Pharmaceutical Industry

 

• Karnataka contributes 8% to the country's revenue in the pharmaceutical sector.
• The state has exclusive pharma SEZs in Hassan and Yadgir.
• Karnataka ranks 5th in pharmaceutical exports, contributing 12% to country's exports. Karnataka Pharmaceutical Policy 2012 aims to develop infrastructure, foster R&D and attract mega projects in the sector.
• Initiatives like Venture Capital fund of INR 50 crore with 26% contribution from government, formation of Karnataka Pharmaceutical Development Council and the Vision Group and promotional activities have been introduced in the policy.

 

Energy

• Bengaluru is the best test site for the Smart Grid in the Country because of Distribution Automation System being implemented here and the transmission SCADA is already in place. Presence of local IT and professional skills adds advantage for bringing in Smart Grid. Karnataka has the highest potential of 7.9 GW of pumped storage hydro power in South India.
• Government of Karnataka is committed to provide 24x7 power to all. Energy sector successfully bridged the difference between energy requirement and availability by 10% in last 3 years.
• Installed capacity for private sector has grown at a CAGR of 12% in the last 5 FYs; private sector contributes to 43% (6,582 MW) of the total installed capacity.
• Karnataka has a wind potential and solar PV potential in excess of 14 GW and 24.7 GW respectively. The state has made amendments to Renewable Energy policy, keen to attract renewable energy projects:
• Industry status to Renewable Energy projects, simple land conversion and forest clearance, attractive Feed-inTariffs promote wind, SHP and Biomass power projects.
• Amendments for building bye laws for Floor Area Ratio (FAR) exemptions driving the growth of roof top solar PV project investments.
• Open bid process & competitive tariff for solar PV projects; Industry friendly regulations support open access projects with waiver of open access charges, loss & 100% banking for solar projects.
• Central excise duty exemptions, Tax holiday, Customs Duty exemption, and up to 50% VAT reimbursement.
• Attractive incentives provided specifically to solar power generation projects via dedicated Karnataka Solar Policy 2014 – 21.

 

Special Economic Zones (SEZs)

 

In order to support the efforts of the Govt. of India in development and promotion of SEZs in the State, the Government of Karnataka has formulated a State policy for SEZs as per the Central SEZ Act 2005 & Rules 2006. The Policy aims to provide a hassle-free environment for the manufacturing & service sectors and to attract FDI. The Economic Survey of Karnataka 2020-21 341 salient features of the State Policy for SEZs are as below:

 

• Single point clearance to SEZ developers & units.
• Acquisition of land on consent basis.
• To set up SEZs on waste, dry and single crop land.
• Exemption from stamp duty and electricity duty.
• Capital subsidy for common effluent treatment plant.

The Board of approval of SEZ constituted under SEZ Act 2005 has granted formal approvals for 75 SEZs in the State. SEZs numbering 36 are operational in the State with an investment of Rs.99055.56 crores and generating employment for 372927 persons. Currently there are 495 SEZ units. The value of exports from these SEZs during the year 2020-21 (April to September) accounted to Rs.62547.44 crores.

 

KARNATAKA TOURISM

Tourism and its allied sectors of travel and hospitality have emerged as key drivers of growth among the service sectors of India. As per WTTC's Economic Impact 2020 report, travel and tourism contribute to 6.8% of India's total GDP, an economic contribution equivalent to USD 194 billion, positioning India as 10th among 185 countries in terms of the sector's overall contribution to the economy. Of this, domestic spending accounts for 83% of the total spending for the sector. Further, the travel and tourism contribute to employment for 3.98 crore people in India.

 

Karnataka has seen immense growth in domestic tourist visits, growing from 36.7 million in 2006 to 229.93 million in 2019. Karnataka attracts approximately 9.8% of overall domestic tourist visits in India, placing at fourth place among Indian states. Karnataka also saw over 6.08 lakh foreign tourist arrivals in 2019 with Bengaluru ranking 5th among international check posts of India for foreign tourist arrivals.

 

Karnataka offers a multitude of tourism opportunities, living up to the promise of its brand “One State, Many Worlds”. The state's pleasant climate, cosmopolitan culture and highly responsive administration make Karnataka an excellent destination for businesses to set up and flourish. The State's tourism destinations encompass a wealth of tourism products across a range of themes including heritage, culture, ecotourism, spiritual, adventure, coastal, wellness, rural, and urban.

 

The COVID-19 pandemic rapidly brought the global travel and tourism industry to a virtual standstill. At such times, it is imperative for business and communities to join hands with the government and pool together their resources and capabilities to navigate through this crisis and come out stronger than before. While domestic tourism is expected to recover faster than international tourism, the road to recovery will be long. “The Karnataka Tourism Policy 2020-25” has taken cognizance of the debilitating impact of the pandemic on the tourism ecosystem of the State and endeavors to create a conducive environment to support the industry for an effective revival and to ensure travelers are safe and can remain confident when visiting Karnataka.

 

Every district has a District Tourism Promotion Council headed by the Deputy Commissioners of the concerned districts. This committee looks after the tourism activities in the respective districts and also monitor the progress of tourism works.

 

Department of Archaeology, Museums and Heritage was also brought in the ambit of, Department of Tourism to facilitate overall development of heritage tourism in the State.

 

From 2017-18 to 2019-20 an amount of Rs. 1255.23 lakhs has been incurred for tourism development. During the year 2020-21 up to December 2020 an amount of Rs. 76.53 lakhs has been spent.

 

Tourism Policy 2020-2025

 

• The Government of Karnataka launched the new Karnataka Tourism Policy 2020-25 on 18 September 2020 to position Karnataka as the most preferred tourism destination.
• The Policy was prepared through extensive stakeholder consultations and aims to create a safe and memorable experience for tourists visiting Karnataka by developing a diverse range of high-quality tourism offerings in the State.
• The Policy is expected to attract over Rs.5,000 crore in investments and create employment for over 10 lakh people during the policy period.
• To make Karnataka a top destination for both domestic and international tourists and leverage tourism's potential for socio-economic growth; the Policy has identified the following 9 strategic pillars:

1. Tourism Marketing and Promotion
2. Tourism Infrastructure

• Tourism Products

1. Skill Development
2. Tourist Comfort and Safety
3. Community Participation

• Sustainable Tourism
• Tourism Analytics and Digital Initiatives

1. Investment Facilitation

The Policy has identified 18 Tourism Themes including Rural Tourism & Agri Tourism, Culture Tourism, Heritage Tourism, Eco Tourism, Coastal Tourism, & Adventure Tourism as well as more than 26 different Tourism Projects for support during policy period. Focus Tourism Destinations have been identified in all districts of Karnataka for prioritized yet equitable development of tourism sector.

 

Investment Facilitation: Under the Policy 2020-25, an Investment Facilitation Cell shall be set up under the Department of Tourism to facilitate investments in Karnataka's tourism sector. The Government of Karnataka envisages that a majority of the new projects in the tourism sector shall be driven by private sector investment. In addition, projects shall also be brought in through publicprivate partnerships (PPP) or direct government investment.

 

The new tourism policy provides a wide range of incentives, subsidies and concessions for eligible Tourism Projects and Tourism Service Providers registered with the Department of Tourism, Government of Karnataka. Further, a Tourism Development Fund has also been established for the development of hospitality and tourism infrastructure in Karnataka.

 

Tourism Marketing, Promotion and Publicity: Through Karnataka Tourism Policy 2020- 25, Karnataka Tourism shall adopt a 360° marketing strategy to promote Karnataka in domestic and key international markets to attract higher tourist footfalls and position Karnataka as a most preferred destination.

 

Karnataka International Travel Expo 2019: Department of Tourism, Government of Karnataka, and Karnataka Tourism Society jointly hosted the inaugural edition of 'Karnataka International Travel Expo'. The event was held from 25 – 27 August 2019 and had participation from over 400 registered buyers and media personnel from 30 countries. The aim of KITE expo was to showcase Karnataka Tourism to the world and increase the overall size of the State's tourism sector. The event has facilitated approximately 10,000 B2B Meetings to bring together International and Indian buyers and sellers, showcasing the best of Karnataka and creating opportunities.

 

Festivals and Events: The department has sponsored for different events on the eve of the festivals across the state.

 

Tourism Infrastructure Development: For the development of tourism infrastructure in Karnataka State, 276 works were entrusted to through various agencies with an estimated cost of Rs.376.35 crore. During the year 2019-20, 25 works are completed and 102 works are under progress. An amount of Rs.131.56 Crore is released to various agencies for the implementation of these works.

 

There are 1069 infrastructure projects were sanctioned for 2020-21 including the ongoing works of which 154 were completed up to December 2020 with an estimated cost of Rs.1003.35 crores. Rs. 23.34 crores has been released for these projects.

 

• There are around 16 on-going NABARD works with an estimated cost of Rs.45.61 Crores, an amount of Rs. 42.97 Crores have been released up to March 2020 for these works.
• As per the recommendations of Karnataka Tourism Vision Group (KTVG) 73 works for infrastructure development in various tourism destinations are continued. An amount of Rs.25 crores released for development of Haliyal Fort, Hiremagaluru Road, Haliyal Convention Centre, Kodagu General Timmayya Smaraka, Purchase of 9.08 acres APMC land at Badami, development of Chitradurga Fort and development of infrastructure and roads for various tourist destinations.

 

 

 

Other Initiatives of Karnataka Tourism

 

• Two beaches in Karnataka - Kasarkod (Uttara Kannada district) and Padubidri (Udupi) have won Blue Flag certification by the Foundation for Environment Education (FEE), Denmark. Both beaches now have as many as 32 facilities including children's play area, hammocks, and recliners with sit-out umbrellas among other amenities. Blue Flag beaches are considered the world's cleanest beaches. In order to qualify, 33 stringent criteria relating to environmental, bathing water quality, educational, safety, services and accessibility standards must be met by the beaches. Karnataka is the only state of India to have two Blue Flag certified beaches.

 

• KSTDC has entered into an agreement with Indian Railway Catering and Tourism Corporation (IRCTC) for the latter to operate and maintain Golden Chariot, South India's only luxury train. The luxury train has been revamped and is now open for bookings.

 

• KSTDC organizes Sound and Light shows at Srirangapatna and Hampi to enlighten the about the history of the state.

 

• KSTDC has renovated its hotels in Mysuru, Vijaypura, Almatti and Barachukki to provide a better facilities for tourists.

 

• KSTDC has launched the Ambaari tour bus in Mysuru for tourists. The Ambaari bus is specially built bus for open-roof tours, with a seating capacity of 40 and shall take tourists on a guided tour around the city.

 

• “Atithi”– Home Stay scheme has been introduced in the State. Many families are coming forward to offer their homes to tourists as Home stays with excellent facilities to the tourists in the state.

 

• Karnataka Darshan programme has covered 14,287 students at a cost of Rs. 5 crore under SCP and TSP

 

• Concept Reports for the development of Heritage Circuit including the heritage sites at Chitradurga, Shivamogga and Davanagere districts under Swadesh Darshan scheme.

 

• A comprehensive report under PRASHAD scheme of Ministry of Tourism for the overall development of Chamundeshwari Temple at Mysuru, is submitted for approval.

 

• To provide safety and security to tourists at tourist destinations, 500 home guards have been trained including 75 women candidates deputed to important tourist destinations to assist tourists as 'Tourist Mitras' (Tourist Police).

 

 

 

Impact of COVID-19 on Karnataka's Tourism Sector

 

The COVID-19 pandemic had brought the world to a standstill and continues to pose an evolving challenge to all countries. Due to lockdowns and uncertainty regarding safety and access, tourism has been the worst affected among major economic sectors. Karnataka's tourism sector is undoubtedly one of the hardest hit sectors in the State. Industry stakeholders have estimated that nearly Rs. 5,000 crore of potential loss per month during the lockdown period with 1 lakh jobs has been at risk due to the impact of COVID-19. While tourism activities have been resumed.

 

Karnataka is the first state to prepare a COVID-19 Exit Strategy for Tourism Sector to help the State to navigate the evolving challenges ahead for Travel, Tourism & Hospitality sector.

 

Five KSTDC Hotels were used as Covid Care Centers & Quarantine Facilities. KSTDC Kumarakrupa Guest House was an important COVID support facility in Bengaluru. Owing to their remote locations, JLR's properties have provided a safe space for tourists during the pandemic.

 

Department of Tourism helped more than 6,800 foreign visitors from 37 countries return home safely during the lockdown due to COVID-19. The support and hospitality of the Department of Tourism was appreciated and commended by international authorities.

 

Way Forward

 

• In order to make Karnataka a global manufacturing hub, released the New Industrial Policy for 2020-25, with focus on advanced manufacturing and innovation. Taking inspiration from Govt. of India, Karnataka is offering Production Linked Incentive of up to 2.25% of annual turnover for 6-10 years to boost exports.
• Amended Industrial Facilitation Act and brought in Affidavit Based Clearance System so that any approved project can start the next day, without waiting for any downstream approvals. Now investors are not required to obtain approvals from 11 different govt. agencies, for a period of 3 years or until commercial operations begin. An Export Strategy for Karnataka has been formulated in November 2020, for a period of five years, in collaboration with Federation of Indian Export Organizations. Karnataka has been chosen as one of the Pilot States for setting up 5 Export Development Centres. Signed MOUs with leading ecommerce players like Amazon Global Selling and Flipkart to boost marketing of local products. Actively pursuing the One District-One Product initiative.
• Developing robust skilling infrastructure and to continuously upgrade training curriculum at ITIs and Polytechnics, through partnerships with industry leaders such as Siemens, Tata Technologies, to train the workforce on emerging technologies.
• Increase Labour Force Participation Rate (LFPR) to 100% from 51.6% (2019) by strengthening linkages between growth centres and workforce.
• Provide appropriate infrastructure to the migrants who have already registered under the Migrants Registration and Establishment Acts by encouraging the non-registered migrants to register and making the Aadhaar and the PDS available to them.
• Reduce unemployment rate to less than 1% from 4.8% (2019) by establishing industries to process farm produce under Atmanirbhar scheme.
• Create social infrastructure by utilizing the increased viability gap funding under Atmanirbhar scheme through Public-Private Partnership. Develop industrial estates and establish specific industries suited to the growth centres. Organize local investors meet to attract both global and local capital.
• Linking unemployed to MSMEs for skilling/upskilling through industrial associations by utilizing funds of National Apprenticeship Promotion Scheme.

 

Source:

Economic Survey

Department of Planning, Programme Monitoring and Statistics,

Government of Karnataka.