Karnataka annnounces employment-linked incentive for land allotment

BANGALORE, INDIA: The Karnataka government unveiled the Karnataka i4 (IT, ITES, Innovation, Incentives) policy at the three-day Bangalore ITE.biz which began here today that encourages setting up new Information Technology projects in tier-2 and tier-3 cites of the state.

Inaugurating the three-day Bangalore ITE.biz, chief minister Siddaramaiah said the state government will allot land to IT companies outside Bangalore in tier-two cities across the state in proportion to jobs they would generate.

The new policy titled '4 Is', -- Information Technology, IT-enabled Services, Innovation and Incentives - has been revised to include telecom sector and to position Bangalore as a innovation hub with thrust on research and development.

The chief minister declared that under the new IT policy, land allotment will be linked to employment generation in tier-two cities across the state, with one acre of land for every 1,000 jobs on long-term lease at concessional rate. "This incentive will be available only to direct end-users and not to real estate developers. A prospective company should give jobs for 1,000 people, with a salary of Rs.10,000 per month to each employee," the chief minister said.

 The Employment-Linked Incentive for Land Allotment (E-LILA) will be applicable only outside Bangalore urban and rural limits in a bid to decongest the grid-locked tech hub.

The policy makes no bones of the chief minister's vision of decongesting the city. Siddaramaiah has virtually directed companies to move base to Tier 2 and 3 cities as the new policy states, "Existing companies in a particular district will not be entitled to avail of incentives for a new facility in the same district."

The policy also states, "A company should undertake to provide minimum employment for 1,000 persons at or above a salary of Rs 10,000 per person per month for a minimum of two-years. Land will be allotted at the rate of one acre for every 1,000 jobs created. The quantum of subsidy will be linked directly to jobs created. The company shall give a bank guarantee which can be invoked upon failure to fulfill the conditions regarding employment."

Existing firms in a particular district, however, will not be entitled to avail of the incentive for a new facility in the same district.

A company to which land is allotted will have to give a bank guarantee that can be invoked upon failure to fulfill the employment conditions.

"The quantum of subsidy will be capped at Rs.60,000 one time for each such employment created," according to the policy.

(With inputs from IANS)