Karnataka approves New Information Technology Policy

On September 3, 2020, Karnataka cabinet approved a new Information Technology Policy, 2020. The policy will help the state to increase its contribution in achieving its goal of 1 trillion USD. Also, the policy will help the state to create six million jobs. The policy is to be executed between 2020 and 2025.


The main goal of the policy is to enable IT industry to contribute 30% to India’s goal of becoming a trillion-dollar economy. The new policy aims to boost IT penetration and innovation, distributed labour force and evolve a Cyber security policy.

Why the new policy?

The economy of Karnataka is centred around its IT ecosystem. The state is the IT hub of India. The capital of the state, Bengaluru is the fourth largest technology cluster in the world. It is one of the largest contributors to the central coffers. Also, Karnataka was the first state in the country to formulate IT policy in 1997. This boosted the growth of the industry. Around 80% of global IT companies have their operations in India and Research and Development centres in the state.

However, COVID-19 induced lock down has worsened finances of Karnataka. The reduction in cash inflows from the centre has forced Karnataka into more debt. It has also led to amendment of laws on industries, land and labour.

Other approvals

The Cabinet also approved the following

  • The Karnataka Government also cleared special incentives for the newly proposed ESDM cluster (Electronics System Design and Manufacturing).
  • Also, 25% of subsidy on land and complete reimbursement on land conversion rate and stamp duty and registration.
  • Rs 600 crores were approved for the water shed rejuvenation project. This included Rs 420 crores financing from the World Bank across 20 districts.

Through these measures, the state government is expecting an investment of over Rs 5,00 crores. Also, it is expecting to generate 43,000 direct employment in the next five years.