Introduction

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

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

the wish to reach out to the last person within a geographical
limit and the aspiration for complete well-being. Therefore, when
Swami Vivekananda speaks of an idea taking over ones very
existence, for a State it would mean a well-balanced, inclusive
approach, according to certain standards and ideals, where
governance and modernity are intrinsic.

This has been the story of the grand State of Karnataka in the
past two years, under the stewardship of Chief Minister
B S Yeddyurappa. To exemplify, the State’s Capital and showcase
city of Bangalore, according to the global list of cities compiled
by HR Consultancy Mercer for 2010, has climbed a couple of
notches and continues to be the best place to live in among
Indian cities.

Bangalore’s ranking is but the reflection of exemplariness and

distinction Karnataka has earned within the Union of India. In the
past two years the State has raked an impressive Rs. 5 lakh crore
industrial growth, in spite of the global financial crisis, to remain in
the forefront as one of the most-developed States in the country.

Karnataka’s renewed developmental thrust in the past two years

shows in its governance, driven by the technology of the times
and the best practices across the globe. In a short span, the State
Government has been able to make it clear on the ground that a
holistic intra-State approach is the only way to emulate its own
Bangalore and information technology success stories.

The Government has successfully put in place the new Industrial

Policy 2009-14, an effort to enhance industry’s share in the Gross
State Domestic Product to 20% by 2014, generate 10 lakh jobs,
double the State's exports from the current level of Rs. 1,30,000
crore, focus on providing quality infrastructure, focus on skill
development and entrepreneurship, and enhance the
development of micro, small and medium enterprises.

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

2010 has already garnered investments worth Rs 3.5 lakh
crore,which in turn is expected to create 6.53 lakh employment

I have a dream, a vision for this one State with
many opportunities. Vision 2020 for Karna-
taka seeks to propel a holistic growth by
promoting equitable development of sectors
and districts, by providing employment to all
sections of people and regions of the State. It
will also focus on ensuring excellent
infrastructure, quality education, decent living
conditions and life security for all our citizens.
B.S.Yeddyurappa
Chief Minister of Karnataka
Mangaloreopportunities.
The new industrial policy is aimed at making the State
prosperous through development of human and natural
resources in a systematic, scientific and sustainable manner.
In Budget 2008-09, the State Government spelt out its intension
to implement Suvarna Karnataka Development Corridor
Programme embracing the entire State. Such a corridor will
possibly benefit many potential areas in the Karnataka region
from Bangalore to Belgaum and laterals of about 50 to 1500 km
from the National Highway and rail network, necessary freight
corridor for trade industry. Sectors such as energy, road and rail
linkages, inland container depots, free trade zones and urban
infrastructure are the major key segments to benefit from this
Corridor and make a significant impact on Karnataka’s economic
growth. The Corridor proposes to cover 11 district
headquarters and more than 20 major towns along the
highways/major roads and rail links.
Karnataka - The Knowledge Hub of Asia
Karnataka accounts for around 5% of India’s national income and
the State has been ranked No. 1 by the World Bank for its
investment climate in a study that analysed 16 States using 46
investment parameters. The fact that one new MNC invests in
the State every week is testimony for the fact that Karnataka is
the leading investment destination in the country. One of the
fastest-growing states in the country, Karnataka has a strong
industrial base and vibrant tertiarry sector. It’s services sector, has
in fact been, the engine of growth.
The reasons that make Karnataka an attractive destination for
investors are:
• Excellent infrastructure
• Readily available land
• Highly skilled technical manpower base
• Large number of technical and research institutes
• Techonology savvy work force with proficiency in English
• Cultural diversity and cosmopolitan urban centres
• Advanced healthcare facilities
• Connectivity through air, rail, sea and road network integrated
with the rest of the world
• A State with effective law and order
• Liberalised economy with single window clearance for investors
• Excellent logistics support
• Abundant primary resources
Home to 700 MNCs and 87 Fortune 500 companies, Karnataka
is a State with varied agricultural and mineral resources, and
strong manufacturing capabilities.
Karnataka is one of India’s leading industrial states, contributing
almost 8% to the national manufacturing income. It has a long
tradition of supporting entrepreneurs, and encouraging
innovation and research. Its strong and vibrant industrial base
combines the intrinsic strengths of large industrial public sector
undertakings, large and medium privately owned industries, a
wide range of small-scale units. While at one end of the
spectrum, the State is the aerospace hub of the country
operating on cutting-edge engineering and IT capabilities, on the
other end, its garment sector, dominated by small units,
contributes 20% to the national output.
Karnataka is also the State with an impressive number of
education and skill-development institutes and organisations - it
has one of the highest number of medical colleges, third-highest
number of engineering colleges, highest number of Industrial
Training Institutes in the country and is home to several premier
research institutes of international repute.
The State is the pioneer and global face for India in Aerospace
and Biotech. Brand Bangalore has become synonymous with
cost-effective and quality solutions. While at the beginning, this
represented off-shoring of low-end services in the BPO sector,
the latent strengths of the State has now made it the first-stop
destination for cutting-edge research and manufacturing centres.
Bangalore is the world’s fourth-largest technology cluster as it has
the perfect ecosystem fostering growth and development of
state-of-the-art technology. The city is also well known on the
global medical map as one with many super-speciality hospitals
providing excellent international quality health care.
The Karnataka State Government has strived to provide an
investor-friendly responsive administration. The Karnataka Udyog
Mitra, set up more than a decade ago, works as single contact
point for all investors - from receiving a proposal to ensuring its
implementation. KUM is actively working with the investors at all
stages. The State Level Single Window Clearance Committee and
the State High Level Clearance Committee (for investments
more than Rs. 50 crore) have been working to clear proposals in
a hassle-free manner.
The Government has put in place the all-new Karnataka State
Industrial Policy 2009-14, with various improvements over the
one of 2006-11. The policy includes:
• One main policy measure intended to smoothen the path for
investors is the exclusive land acquisition policy and
development of a Land Bank – each district to have 2,000
to3,000 acres acquired by the Karnataka Industries
Development Board for industrial development.
• The Suvarna Karnataka Development Corridor Initiative has
been planned to connect cities in all districts through a
network of highways, with cluster development in designated
zones.
• Sector-specific industrial zones and SEZs have been identified
that match the natural resources and capabilities of a district
with industry requirements..
• There is a special focus on skill development to enhance
generation of technical manpower and ensure that Karnataka’s
lead in providing skilled workforce is sustained.
• Creation of world class infrastructure through investments in
power, roads, water, warehouse and logistic facilities,
connectivity through rails and ports etc. has been planned to
facilitate entry of investors.
In addition to the regular State industrial policies, Karnataka has
formulated sector-specific policies – IT, Biotech, Semiconductor,
Renewable Energy Policy, Suvarna Vastra Neethi for textiles,
Tourism Policy. Each of these policies targets a specific sector with
incentives, concessions and development schemes that are suited
to specific needs. The Semiconductor Policy 2010 deserves
special mention as it ties in with both the State IT and Renewable
Energy Policies by encouraging programmes like the Smart Grid
pilot project at the Electronic City, geared to raise energy
efficiency in the State.
The State government well understands the pressing need to
upgrade infrastructure, and Karnataka aims to double investment
in the sector to meet the needs of a fast-growing economy.
Private sector partnership is being actively sought by the
investor-friendly Government – more than 200 projects worth
Rs. 135,000 crore are in various stages of implementation.
Karnataka is a State known for its stable and forward looking
government, effective law and order and minimal disruption to
economic activity. In the India Today State of the States Ranking
2009, Karnataka has maintained its fourth rank in governance.
Karnataka is a State that has put its IT capabilities to optimum use
not just to attract global high-technology investment, but also to
raise domestic efficiency through e-governance initiatives.
The key factors that make Karnataka stand out as an investment
destination is the State’s rich resource base and progressive
policies that have combined over the years to create a rapidly
growing economy, attract global investment and make it a truly
Global State.
Karnataka is well set to lead the nation, showing the way through
effective public-private partnership. For investors in any field, the
two primary inputs that are vital for production are land and
labour; Karnataka leads the country in both. Karnataka’s new
Industrial Policy 2009-14 has provided for 50,000 acres of land
across 5 industrial corridors to facilitate project implementation,
especially for large projects facing land acquisition issues in other
States. In addition, Karnataka ranks first amongst all the States in
India in the labour supply ecosystem , providing access to a vast
pool of skilled manpower as well as research, engineering and
design capabilities in all frontier sciences, the State is in fact the
Knowledge Hub of Asia.
India and Karnataka
India’s impressive growth performance over the past decade has
made it a global powerhouse today, a force to be factored in all
the calculations of world growth and development. High
economic growth in a country that has a stable democracy and
free market has in fact made India the cynosure of the world in
the new millennium. Add to this a large stock of manpower, the
fastest growing population of workers and consumers, strong
spirit of entrepreneurship and innovation that has been given free
rein with the economic reforms over the past two decades, and it
is clear why India has attracted global investors from all sectors.
India ranks 13th in Global FDI flows ; but more importantly, it
ranks third on the list of most-favoured FDI locations, as is true
for the State of Karnataka. While India burst onto the global
scene by establishing its leadership in information technology, the
past few years have seen its stature rise in various sectors,
including Steel, Auto, Biotech and Pharma. India’s potential for
growth has been recognised time and again and the economy is
expected to grow in size from 7% of the US’s in 2007 to 88% in
2050. Going ahead, the strong boost for infrastructure and a
liberalised environment are a sure recipe to achieve India’s aim of
sustainable growth at 8.5% per annum for the next decade.
The country is in fact poised for greater achievements ahead as
India has bucked the global slowdown. While the developed
world was in a contraction mode following the global financial
crisis, India registered a 6.7% growth in 2008-09 and 7.2% the
following year; the country continued to be the second-fastest
growing economy in the world for the fourth year in a row. The
twin engines of growth have been the service and the
manufacturing sectors, which have expanded at 7.5% and 10.3%
per annum over the period 2004-2009. The world now looks to
the developing economies for the much needed push to growth
as China and India power the world.
Karnataka, the eighth largest State in India, has contributed
significantly to India’s rising success . Karnataka, with its varied
agricultural and mineral resources and strong manufacturing
capabilities accounts for close to 10% of India’s product exports.
The capital Bangalore is in fact known globally as the IT capital of
India, the State’s software exports form more than 35 % of India’s
software exports. Karnataka is also the Knowledge Hub of the
nation – it has the highest number of medical colleges and third
highest number of engineering colleges in the country. The State
is the pioneer in two cutting edge industries, aerospace and
biotech, where it is the global face for India. Brand Bangalore has
come to mean cost effective and quality solutions in numerous
industries. While at the beginning, this represented off-shoring of
low-end services in the BPO sector, the latent strengths of the
State have now made it the first stop destination for
high-technology cutting edge research and manufacturing centres
of global majors. Bangalore is the world’s fourth largest
technology cluster as it has the perfect ecosystem fostering
growth and development of State-of-the-art technology.
The State economy has a sound base in its rich resources,
manufacturing expertise and proactive government policies that
have kept growth going in tough times.
Agriculture sustains around 63 % of the population and the State
accounts for 6% of all food grains production in India and 14% of
India’s groundnut output. The State government is encouraging
horticulture and agro-processing to utilize the full potential of
resources. Karnataka is one of the country’s largest producers of
fruits and vegetables, it produces 12% of fruits and 8% of
vegetables grown in India. The State ranks second in the
production of flowers, it has in fact the largest area in the country
under horticulture. Karnataka ranks second in area and third in
production of plantation crops. Karnataka contributes 70% of
India’s coffee production and is also the largest producer of
spices, aromatic and medicinal crops. The State is the second
largest producer of tobacco in the country and the third largest
producer of sugar in the country, contributing 5.22% to India’s
sugarcane output. It contributes 6% of the total cotton produced
in the country, 65% of India’s raw silk and 12 % of India’s wool
production, making the State a leading centre for the textile and
garment industry.
Karnataka’s manufacturing sector is well-diversified, it contributes
8% to India’s industrial income, with firms in all sectors of
manufacturing - engineering, auto, chemicals, electrical and
electronic products, food processing etc. Industrial growth has
accelerated from 6.2% in the nineties to 8.9% per annum since
2000. Karnataka is India’s third largest producer of steel and
seventh largest producer of cement. It accounts for 20% of India’s
garment production and 8% of national apparel exports. The
State is India’s fourth largest automobile hub and the largest
contributor to the aerospace industry.
Karnataka currently contributes 5% to India’s service sector
income, however in certain sectors it is the undisputed leader.
Capital, Bangalore, has become the powerhouse of information
technology in the country. The State was the first in India to set
up a Software Technology Park in 1991 and reigns as the leader
in software exports, bringing in Rs. 67,400 crore in 2008-09. The
first State to bring the private sector into higher education,
Karnataka has the highest number of medical colleges in the
country. The State is one of the main centres for medical tourism
in the country, as its super speciality hospitals draw in patients
from abroad. Always on the forefront of innovation, the State is
the biotechnology hub of the country, home to 187 out of India’s
340 biotech firms, and is leading in nanotechnology research.
Currently ranking fourth in tourist destinations in India, the State
is set to become the leading destination for tourists, in fact the
State policy aims to make Karnataka the single largest sector in
the economy by 2014.
Karnataka – a resource rich and well connected State
These are the basic facts of the State – location, geography,
climate, demography, physical resources, connectivity for
transportation and communication have been attuned to the
State’s quest for development. For, Karnataka is a leader in
innovation -- a major contributor to the State’s strengths in global
outlook – a resource base that’s rich in scientific research and
training, and skilled manpower resources.
Karnataka: a resource rich State

• Rich in natural resources
• 5 National Parks and 21 Sanctuaries
• Fourth largest State in terms of forest cover
• The Silk State of India – 50% production in Karnataka
• The Coffeemaker of India -- State accounts for 70% of India’s
coffee bean production
• Second largest iron-ore reserves in the country and a quarter
of the nation’s limestone deposits
• State rich in platinum and other high-value minerals
• A Land of Gold: Kolar Gold Fields
• The Sandalwood State: 73% of the aromatic wood found here
• State grows all food crops, leads in horticulture and
floriculture
• Home to premier education and research institutions
• Strong focus on developing skills and employment
opportunities
Karnataka – A tradition for Innovation
Innovation has always dominated the academic, corporate and
decision making ethos of Karnataka. It has a number of firsts to its
credit and has a long tradition of public-private partnership:
• First major hydro-electric power generating station at
Shivasamudram in 1902 with the capacity of 42 megawatt.
• First aircraft producing company Hindustan Aircraft Ltd set up
base in Bangalore in 1940
• Cradle of Banking in India – seven of India’s leading banks
originated from Karnataka
• First to introduce private sector in higher education – highest
number of medical colleges in the country
• First to introduce the concept of a Software Technology Park
in India
• First State with an IT Policy and a Semiconductor Policy
• Country’s first private airport with State of the art
infrastructure in India at Bangalore
• Leader in biotechnology – home to 187 out of India’s 340
biotech firms
• Yeshaswini Health insurance scheme – Karnataka has become
a role model State with the introduction of this scheme. Any
farmer who is a member of co-operative society in Karnataka
can get the necessary surgical treatment by becoming a
member of the scheme.
Karnataka has always been a proactive State, which has today
made it into the most sought after destination for cutting edge
technology and manufacturing in the country. One of the main
advantages for investors in this State is the availability of a large
pool of technical and skilled manpower and the presence of
internationally renowned research institutions in every field. As
the home to many premier institutions (detailed in Section 9 of
this white paper), Karnataka is well known as the ‘Gateway of
Knowledge’, it is the Knowledge Hub of Asia.
Karnataka – An enduring strong economy
The State has witnessed economic growth over time, compared
to other States in the country. Indeed, there are challenges in
human development and infrastructure that are still to be met
with, especially in health and education, along with the
infrastructure requirements. What has been the enduring fact in
all this, however, is the positive stance of the government towards
partnering with the private sector to achieve these goals.
Karnataka’s Vision 2020 for growth is in synch with the quest.
Karnataka’s growing economy
• GSDP of Karnataka 2008-09: Rs. 1,81,338 crore
(US$ 40 billion)
• Average annual growth of more than seven percent since
1999-2000
• Per capita income Rs. 40,309 (US$ 880)
The sectoral composition of State income has changed over the
years as the primary sector has reduced in importance, giving
way to the tertiary sector. While this is a natural trend in
economic growth, it needs to be accompanied by a
corresponding shift in employment shares to enable higher levels
of income across all sections. The Karnataka Government Vision
2020 seeks to remove the sectoral and regional disparities by
encouraging diversified economic activity in all regions of the
State as well as through raising skills in the labour force through
vocational training and other institutes.
Sectoral Performance of Karnataka Economy
The primary sector in Karnataka has grown at 3.6% over the past
eight years. The State government has launched the Karnataka
Agriculture Mission to give the necessary boost to the agriculture
sector. Other agriculture oriented programs such as Farm
Mechanization scheme, Rashtriya Krishi Vikasa Yojana (RKVY) and
major irrigation projects are being undertaken to revive the
growth of primary sector.
The strong and vibrant industrial sector of Karnataka has been
the key growth driver for Karnataka economy. Buoyed by strong
fundamentals, industry friendly policies in the State and
infrastructure support, the secondary sector has been growing at better rail connectivity and penetration, see table below for
an average rate of 11 per cent during the past eight years. comparison of rail network before and after completion of
ongoing projects
The mining sector in this mineral rich State has clocked an
average annual rate of 14%. while construction activity has grown Karnataka being a global destination for business and commerce,
at 13%. The employment oriented manufacturing sector the passengers movement through air transport is one among
registered 11% growth rate during the 2000s, pushing the job the highest in the country.
creation in the State.
Households with electricity and LPG – Electricity and cooking
The last decade has seen the emergence of Karnataka as the hub gas are basic utilities that indicate household access to
of information technology which has rendered impetus to the infrastructure and a better standard of living. The State performs
growth of overall services in the State. Karnataka is the leading better than Maharashtra and Gujarat, but is a tad lower than
exporter of software in India. In the year 2009-10, IT exports other southern States. However the State has to make significant
from Karnataka amounted to Rs. 70,375 crore, the highest in the improvement in making the LPG connections available to the
country, clocking a growth rate of 28%. households. With only 40% of households having LPG
connections, fulfilling the rest is a challenge.
The services sector grew by more than 9% rate over the last
eight years in the State. Continuing with the same pace of growth Finances of Karnataka Government
for the next ten years, Karnataka is set to become the global
services hub of India by 2020. Within the services sector, financial Fiscal stimulus measures to mitigate the slowdown have led to a
services grew by 14 % annually and transport and rise in the fiscal deficit of the Karnataka State. According to the
communication sector rose at 13% per annum. Trade, hotels and revised estimates for the financial year 2008-09, the gross fiscal
restaurants have grown by 9.8% and real estate sector witnessed deficit of the State was 3.5 of the State’s GSDP. This is highest
growth in the range of 8-9%. amongst all the industrially progressive States. The situation has
ameliorated to a certain degree. According to the Karnataka
Infrastructure development: The presence of robust State Budget for 2010-11, the fiscal deficit is estimated to be 2.96
infrastructure in a region is a prerequisite for sustained economic % on account of increased revenue as well as capital inflows in
growth. The State government has apportioned resources to the State.
build adequate physical infrastructure comprising of road
Gross Fiscal Deficit as % of Gross State Domestic Product
network, transport and communication facilities and energy
States / Year 2006-07 2007-08 2008-09 (RE)
availability to households. The status of infrastructure availability in
Karnataka is discussed below. Andhra Pradesh 2.10 2.96 2.80
Tamil Nadu 1.51 2.55 2.70
Roads: The road length of Karnataka has been growing at 7% Karnataka 2.49 2.83 3.50
rate annually over the period 2003-04 to 2008-09. The density of Maharashtra 2.27 1.82 2.30
roads as measured by the proportion of length of roads to the Gujarat 2.22 1.76 2.90
total area of the State is higher for Karnataka as compared to all Source : State Finances, Reserve Bank of India
India average. Note : RE -Revised Estimates , BE- Budgeted Estimate

Transportation: The transportation system in Karnataka is well Karnataka has recorded maximum increase in the State
developed comprising of road transport, railways and aviation development expenditure in the year 2009-10. Yet, the State has
sector. The density of motor vehicles in Karnataka is higher than one of the lowest spending on development activities such as
the national average. health, education, housing, agriculture, rural development, labour
welfare etc.
The total length of railway lines is relatively lower that other
industrial states. However, plans for expansion of rail network are
set to raise the access across the State within the next five years.
On completion of the ongoing projects, Karnataka will have
 Human Development in Karnataka
Economic progress of a region should have a positive impact on
the standard of living and State of human development which are
gauged by general health and education indicators. In general,
Karnataka performs better on these indicators in comparison to
national average situation and other States with a similar
economic profile. Social sector development has always been a
thrust of Karnataka government’s policies. Even as an average
Karnataka citizen lives a better life in terms of availability of health
and education facilities, significant efforts are required to further
improve the living conditions of the poor and the marginalized.
Health
The basic health indicators in Karnataka such as birth rate, death
rate, life expectancy suggest better development of health sector
in Karnataka as compared to average rate in India and other
States such as Maharashtra and Gujarat. However, the State
needs to put more emphasis on improvement in the healthcare
institutional mechanisms to bridge the gaps in delivery systems.
Karnataka has one of the lowest birth rate and death rate among
the industrially prosperous States and fares well when compared
to the national average. Other indicators like lower fertility rate,
trained birth assistance also provide a better picture of living
conditions and status for the women in Karnataka. The State
government has initiated the ‘Taayi Bhagya’ scheme aimed at safe
delivery, nutrition and diet and antenatal check up and
institutional delivery for women in BPL family.
Only 55 % of children under the age group 12 to 35 months are
fully immunized. While this performance is better than the all
India average of child immunization at 49.7 %, States like Tamil
Nadu have been able to fully immunize 81 % of the children.
Health status of Karnataka and other states
The status of health infrastructure in Karnataka as determined by
the presence of adequate number of hospitals in the State
renders a positive positioning of the State at national level and at
inter-state comparison as well. The number of rural and urban
hospitals in Karnataka is far more than the peer States. An
average government hospital in Karnataka serves 64,518 people
in a year as compared to more than a lakh people served at India
level. The corresponding figure for other States is even higher.
Karnataka also has a well developed primary healthcare system
for rural areas. Established and maintained by the State
government, Primary Health Centres and their sub-centres are
the first referral point for rural patients. Karnataka has the highest
number of Primary Health Centres per lakh rural population
among the progressive States.
Education
The literacy rate in Karnataka is higher than the national average
as per the Census 2001. However Maharashtra, Tamil Nadu and
Gujarat have higher literacy rates. The State government spends
around 15 % of its total disbursements on education which is
higher than all India average as well as that of Andhra Pradesh
and Gujarat.
Education Status of Karnataka and other States
Literacy rates does not indicate the quality of education which
becomes clearer through factors such as proportion of trained
teachers and number of students being allocated to a teacher on
an average. Karnataka is one of the few States in India to have
100% trained teachers in higher secondary, middle as well as post
basic schools. However, in terms of pupil teacher ratio, Karnataka
trails behind other industrialised states as well as national average
rate. In order to improve the State of primary education, the
government has increased recruitment of teachers in government
as well as private schools.
Development of economic and social landscape should be in
alliance with the economic and industrial growth of the region.
The benefits of the economic growth need to percolate to the
social sector to ensure balanced human development in the
State. The growing economy has also put pressure on demand
for physical infrastructure, and the government has tied up with
the private sector for building, financing, execution of
infrastructure projects of huge size under the Public Private
Partnership arrangements, the details of these projects are
discussed in Sections 7 and 8.
The Karnataka government fully understands the challenges
ahead to raise the State to greater heights and is working
towards meeting a set of targets by 2020 through a
comprehensive and coordinated strategy. The government is fully
committed to orienting its policy measures in an effective manner
to achieve these goals as set out in the table below.
2. Karnataka - A leading investment destination
Karnataka’s performance in attracting investments, both domestic
and FDI, highlight the State’s robust financial network.
Karnataka, India’s eighth largest economy, accounts for around 5%
of its national income. The State has been ranked first by the In terms of foreign technical transfer approvals, over the period
World Bank for its investment climate in a study that has analysed 2001-2009, Karnataka stands fourth in the country, accounting for
16 States using 46 investment parameters (see accompanying a 6.51% share. Maharashtra with Mumbai as the country’s
image from the report ). The fact that one new MNC invests in financial and business capital leads in this regard, while Tamil Nadu
the State every week is testimony that Karnataka is the leading and Gujarat rank marginally ahead of Karnataka in foreign
investment destination in the country. technical collaborations.
The reasons that make Karnataka an attractive destination for
investors can be summarised in brief here, as details follow in Even with respect to domestic investment, the State is amongst
separate sections later. the leading destinations. Amongst the 35 States and union
territories, it ranks sixth in India in terms of the number of
• Excellent infrastructure Industrial Enterpreneur Memorandums filed during the period
• Readily available land in a land bank April 1991 till January 2010 , an indicator of the investment
• Highly skilled technical manpower base intentions in the State. From January 2006 till January 2010, a
• Large number of technical and research institutes total of 927 investment proposals were approved in the State
• Techonology savvy work force with proficiency in English amounting to more than Rs. 4.5 billion – this comprises 9.1% of
• Cultural diversity and cosmopolitan urban centres the total investment proposed in the country during this period.
• Advanced healthcare facilities
• Connectivity through air, rail, sea and road network integrated RBI’s - Percentage
with the rest of the world Regional State covered Amount FDI Inflows with FDI
Office2 inflows (in
• A State with effective law and order (Rs. in US$ in
rupee terms)
crores) million
• Liberalised economy with single window clearance for
investors (from April 2000 to December 2009)
• Excellent logistics support Mumbai Maharashtra, 168,442.62 37,803.12 35.89
Dadra &
Nagar Haveli,
Home to 700 MNCs and 87 Fortune 500 companies, Karnataka Daman & Diu
is a State that is already well known on the global investment Delhi Delhi, Part of 91,077.15 20,144.47 19.4
space. In fact, the term ‘Bengalored’ used to denote jobs moving UP and Part of
Haryana
from the US to India due to the presence of the first outsourcing
Bengaluru Karnataka 29,789.25 6,736.95 6.35
centres in the nineties. Since then, however, the city has moved
up the value ladder to become the first stop destination for Ahmedabad Gujarat 27,927.48 6,328.95 5.95

cutting edge research in high technology areas like aerospace Chennai Tamil Nadu, 23,819.42 5,299.34 5.07
Pondicherry
engineering design, biotechnology, nanotechnology etc. With
Hyderabad Andhra 20,043.49 4,531.91 4.27
more than 5300 patents filed from centres in this city, Bangalore Pradesh
now forms the fourth largest technology cluster in the world.
Karnataka has an investor friendly supportive government. The
In terms of FDI inflows, Bangalore centre which accounts for FDI Karnataka Udyog Mitra, set up more than a decade ago, works as
investment in Karnataka, ranks third in the country after Mumbai, single contact point for all investors - from receiving a proposal
India’s financial capital and Delhi, the national capital. Contributing to ensuring its implementation KUM is actively working with the
to 6.35% of the total FDI flows to India over the period April investors at all stages. The State Level Single Window Clearance
2000 till December 2009, Bangalore has brought in $ 6.7 billion, Committee and the State High Level Clearance Committee (for
an amount higher than the Ahmedabad, Chennai and Hyderabad investments greater than Rs. 50 crore) have been working to
centres. clear proposals in a speedy manner.

The vibrant, growing economy also generates considerable

resources internally. The State has a wide network of banks, the
number of branches has been growing to cross 5,600 in 2008. All
major domestic and foreign banks have their branches in the
State, to tap the funds flows and credit needs of the economy.
The amount of deposits in scheduled commercial banks in the
State exceeds that in other States like Tamil Nadu, Gujarat and
Andhra Pradesh, standing at Rs. 209,609 in March 2008. Bank
credit that had been growing faster than the deposits during the
boom years, slowed its rapid rise in 2008 (see graph) and stood
at Rs. 197, 630 lakh in March 2008.
Investment from domestic and foreign sources is set to rise
rapidly in 2010-11 as the State government has put in a series of
measures to smooth the progress of implementation of projects.
One of the most important steps taken has been the creation of
a 50,000 acre land bank in various locations across the State that
will ease the path of investors who are struggling with land
acquisition problems in other States. In addition, the boost to
infrastructure is another part of the government’s comprehensive
and coordinated strategy to facilitate investment in the State.
Karnataka, already on the global radar for its positive investment
climate, will maintain its lead compared to other States as the
No.1 investment destination in the country.
Karnataka: A thriving industrial State
The State’s industrial profile, in terms of growth in production,
investment approvals et al is well-charted, from manufacturing
units in various sectors, to district-wise distribution of industrial
activity.
Karnataka is one of India’s leading industrial States, contributing
almost 8% to the national manufacturing income. It has a long
tradition for supporting industrial entrepreneurs and encouraging
innovation and research and its strong and vibrant industrial base
combines the intrinsic strengths of large industrial public sector
undertakings, large and medium privately owned industries and a
wide range of small-scale units. While on one hand, the State is
the aerospace hub of the country operating on cutting edge
engineering and IT capabilities, on the other, its garment sector
dominated by small units contributes 20% to the national
garment output.
Karnataka’s industrial sector, as measured by the Index of
Industrial Production IIP, rose by 4.72% in 2008-09, lower than the
previous two years due to the global slowdown. The IIP
comprises mining, manufacturing and electricity production and
these three sectors grew at 7.4%, 5.51% and 0.08% respectively.
The low growth in electricity generation has been a cause for
concern, given the demand stemming from the rapid growing
economy. The State government has therefore planned power
projects that will enable the State to be energy sufficient by
2013-14.
Looking at the sub-sectors in the IIP, 8 of the 22 sub-sectors
recorded high growth of more than 20% in production in
2008-09, a year in which the economy had been hit by the global
slowdown:
Manufacture of Publishing and Printing Materials, Manufacture of
Furniture, Manufacture of Leather Goods, Manufacture of
Rubber & Plastic Products, Manufacture of Office, Accounting &
Computing Machinery, Manufacture of Coke, Refined Petroleum
Products & Nuclear fuel, Manufacture of Paper & Paper Products,
Manufacture of Food Products & Beverages.
Investment intentions slowed down considerably in 2008-09
(see tables below) as the global financial crisis followed by the
recession around the world hit investment plans. However, by
March 2010, there were clear signals of a firm recovery in the
Indian economy and capital investment plans shelved during the
crisis have since picked up steam once again. Karnataka will
therefore see a revival in investment in the current year 2010-11
as the basic fundamental strengths of the economy – rich
resources, progressive policies, stable State, supportive ecosystem
for entrepreneurship and investment- continue to stay in place.
The compound annual growth rate of investment proposals
above the value of Rs. 3 crore has been 25% over the period
2001-02 to 2007-08 and with the renewed vigour of the State
policies and support, this growth is set to rise further in the next
five years.
According to estimates based on NSSO data, the Indian Industrial
Skyline shows that the sector registering the highest value of
production is refined petroleum products, followed by basic iron
and steel. This reflects the presence of the Mangalore Refinery
and Petrochemcials Ltd. in Mangalore, which has a design capacity
to process 9.69 million metric tonnes per annum. It is the only
Refinery in India to have 2 Hydrocrackers producing Premium
Diesel (High Cetane) and also the only Refinery in India to have
2 CCRs producing Unleaded Petrol of High Octane. The State is
the third largest producer of steel in the country, as it has the
second largest iron ore reserves in India. Karnataka has the
capacity to host a manufacturing steel base for more than 100
Million Tons capacity per annum and is gearing up to provide all
the infrastructure support to enable full utilisation of its
resources.
The sector producing the third highest value of production
includes firms involved in manufacturing meat, fish, fruits,
vegetables, oils and fats & other food products. With fertile soil
and six agro climatic zones the State has high volumes and variety
of produce, while marine produce is abundant along the long
coastline. Karnataka has large resources that support the food
processing industry - almost 6% of India’s livestock, 12% of India’s
fruits, 8% of vegetables, 14% of groundnut etc. Karnataka has the
potential to merge as the largest hub for food processing in the
country.
In terms of the number of manufacturing units, the largest sector
involves tobacco products, followed by wearing apparel(except
for fur) and manufacturing of meat, fish, fruits, vegetables, oils and
fats and other food products. The State is the second largest
tobacco producer in the country, contributes 20% to India’s
apparel industry and 8% of India’s garment exports. All these
sectors have a large presence of small scale firms; in fact textiles
and food products have the largest number of MSME units in the
State.
The table below detailing the industry profile of the State shows
the wide range of products being manufactured in Karnataka.
While industrial activity is spread out across all districts of the
State, the top ranking districts are Dakshin Kannada, Bangalore,
Mysore, Bangalore Rural, Belgaum and Bellary. These six districts
account for more than three-fourths of the total value of
industrial production as the large, capital intensive industries are
based in these districts. Thus, in terms of the number of
manufacturing units, activity is less concentrated and the top five
districts account for just 40% of total units. Looking at the
employment generated, the top six districts contribute to 50% of
the total manufacturing employment in the State : Bangalore,
Dakshina Kannada, Shimoga, Bangalore Rural, Chikmagalur, Tumkur.
This reflects on the smaller more labour intensive units in districts
like Shimoga, Chikmaglur and Tumkur, centres of various
agro-based industries, auto component units etc.
The Government of Karnataka data estimate that Karnataka has a
strong base of over 3.89 lakh registered units in Small Scale
Industries with investments of about Rs 100 billion, employing
more than 22 lakh persons. Despite the global slowdown in 2008,
MSME investment rose by 8.4% in 2009-10. While textiles and
apparels form the largest product segment, food products,
articles of wood and cork, maintenance and repair of vehicles
and motorcycles and fabricated metal products form the next
four largest segments in Karnataka, complementing the
well-diversified industrial landscape in the State. The very fact that
global procurement centres are located in Bangalore is indicative
of the concentration, quality and strength of Karnataka
endowments. There are 20 MSME Industrial Clusters that focus
on various products – food products, leather goods, light
engineering, power looms, dal and oil mills, garments, machine
tools etc. There are 10 handloom clusters located in Bagalkote,
Chitradurga, Dharwak, Udupi, Koppal, Tumkur, Mysore, Bangalore,
Kolar, Gulbarga and Belgaum districts and more than 140
handicraft MSME clusters
Key industrial clusters in Karnataka
• IT/ITeS cluster in Electronic City and Whitefield, Bangalore
• Biotech park/cluster in Electronic City, Bangalore
• Machine tool cluster at Peenya industrial eState
• Textile cluster at Doddaballapur
• Foundry cluster at Belgaum
• Industrial valve cluster at Hubli-Dharwad,
• Auto component cluster at Shimoga,
• Coir clusters at Hassan
• Coffee production & processing cluster in Madekeri.
Karnataka, as mentioned earlier, is one of India’s leading industrial
States and the following table presents the relative importance of
the State in various industries, compared to the other industrial
States of the country. Compared across 10 industries, the State
performs well on each count, showing the well-diversified
industrial base.
Karnataka – A robust infrastructure
The status and proposed projects in the infrastructure in the
State: Power sector, Irrigation network, Transportation covering
roads, rail network, air and ports and SEZs growth and projects
underway, are pointers to a State ‘hungry’ to achieve milestones
in development. And there’s more – From urban development
to the Development Corridor Initiative.
Karnataka aims to double investment in infrastructure to meet
the needs of a fast growing economy.
Private sector partnership is being actively sought by an
investor-friendly government – more than 200 projects worth Rs.
135,000 crore are in various stages of implementation.
Power: The State has a long and enviable history in power
generation – Asia’s first major hydro-electric generating station
was set up at Sivasamudram as early as 1902 for commercial
operation, at a time when technology was still in its infancy. The
longest transmission line at then highest voltage in the world, was
constructed to meet the power needs of mining operations at
Kolar Gold Fields. Karnataka has maintained its tradition of being
at the forefront of technology and the Government of Karnataka
has always emphasized development of renewable energy, with
Karnataka Renewable Energy Development Corporation Ltd
(KREDL) as its nodal agency championing the green agenda in
the energy sector. The three pronged strategy: Energy Sufficiency,
Energy Efficiency and Green Clean Power – drive the power
policy of the State. Karnataka, a pioneer in wind power projects,
stands fourth in the country in wind energy generation. One of
the first States to undertake significant reforms in the power
sector in the nineties, Karnataka is now pushing for innovative
high technology ways to generate electricity efficiently – the
Electronic City in Bangalore is India’s first pilot project in Smart
Grid, leveraging Karnataka’s IT capabilities to the hilt. The State’s
Semiconductor Policy 2010 is one more step that reflects on
Karnataka’s commitment to new technology driven efficient
energy solutions in the State.
In accordance with the Industrial Policy’s Suvarna Karnataka
Corridor Development Initiative, power generation zones are
being set up in Raichur, Bellary, Bijapur and Chitradurga districts,
while sugar and co-gen zones proposed in Bidar, Belgaum,
Bagalkot, Shimoga and Mandya districts will aim to effectively tap
the natural resources in these areas to the maximum. In order to
address the problem of energy shortage, on going projects
planned are slated to bring about energy sufficiency by 2013-14
with a capacity addition of 23,523 MWs in the next four years.
An additional 4200MW is planned through tapping
non-conventional energy sources. The State’s proactive and
investor friendly government is working in tandem with the
private sector to ensure that Karnataka’s growing energy
requirements are met with ease and efficiency. Karnataka today is
a power deficit State. At peak hours in the summer months, the
power shortage ranges from 1,000 MW to 1,500 MW.
Energy Shortage
In order to facilitate private investment in development of
conventional energy resources, Power Company of Karnataka
Limited (PCKL) was formed in the year 2007. PCKL facilitates the
entry of private players in power projects in the State and also
take up Energy Trading on behalf of all Distribution Companies.
The main source of energy in Karnataka is thermal with the two
main power plants at Raichur and Bellary. Hydel power projects
on the rivers of Sharavathi, Kalinadi, Varahi, Ghataprabha, Almatti
etc. form the second most important source, contributing 37% to
total power generation in the State. The State has also been
successful in harnessing wind energy, that makes up 6% of power
generation. Kaiga Generating Station in Uttar Kannada district is
one of India’s six atomic power plants; in operation since 2000,
the plant has four units and in November 2009, approval was
granted by National Power Corporation for expansion in the
Second Phase that will generate 1400 MW of power when
completed.
TRANSMISSION: The power requirement of the State are met
through drawing power from the grid and is handled entirely by
Karnataka Power Transmission Corporation Limited (KPTCL)
which transmits this power from 400 KV and below up to 66 KV.
Beyond 66 KV distribution companies handle the transmitted
power and distribute to the consumers. Karnataka has the
privilege of first transmission line of 78 KV in India from
Shivanasamudram generating station to Kolar Gold Fields (KGF)
in the year 1902 and has built up a transmission network of
36,492 Ckms with 874 stations.
DISTRIBUTION: Karnataka was the first State in the country to
separate distribution from transmission and 4 distribution
companies namely BESCOM, MESCOM, HESCOM & MESCOM
were started and later CESCO was started. The power
transmitted to the distribution companies are distributed to 1.7
crore consumers across various categories.
The distribution companies have 324 33 kV sub-stations, 2,00,452
kms HT lines, 4,47,013 km of LT lines and 3,24,757 distribution
transformers. Over the years, Karnataka has built up an efficient
and robust distribution in the State which is considered one of
the best in the country.
Non-conventional energy sources are also being tapped for
optimal power generation in the State, an additional 42,00MW is
planned through these sources.
During 2008-09 a number of initiatives were taken up by the
government to address the severe power shortage resulting from
inadequate monsoon
• MOU was signed with Chhattisgarh State for putting up 1200
MW planned at the pit-head in Zanzgir, Champa District and
a 1600 MWs plant at the pit-head in Jangir,Champa District.
• Work started on 400 MW hydro electric plant at Gundia.
• KPCL in joint venture with BHEL started work for 2400 MW
Coal based power plant at Yermarus & Edlapur.
• 3 MW Solar power projects each at Kolar, Belgaum and
Raichur were undertaken by KPCL.
• Commissioning of 500 MW of Bellary Thermal Power Station
(BTPS) unit-I.
• 230 MW of Varahi Hydro Electric Power Plant Commissioned.
• Renovation and modernization Unit IV of Nagazari Hydro
power house which has started producing 15 MWs.
• Agreement with NTPC was signed to put up 4000 MW Ultra
 mega power project at Kudgi and land acquisition process
initiated.
• Power Company of Karnataka Limited got the approval for
setting up plant through private investors at Jewargi in
Gulbarga District for 1320 MW and process of land
acquisition started.
• Government land was allotted in Ghataprabha of Belgaum
District for establishing 1320 MW power plant through
Private Investment.
• PCKL invited bids for 2500 MW of power plant for
procurement of energy on long term basis through
competitive bidding route (Case-I) under Merchant power
plants.
• It also invited bids for 5 MW power plants at Taluk level for
decentralised power production in each taluk.
• Wind power project of 500 MW also put up by NTPC in
collaboration with KPCL under joint venture.
• Power was purchased from IPPs and through energy
exchange.
• All the distribution companies went for roistering of power
supply and supplied a minimum of 6 hours of 3 phase and 6
hours of single phase to rural areas during this period.
• From the non-conventional energy sources 422 MW capacity
was also added.
The State’s proactive investor-friendly policies have attracted
many investors in the recent past as well:
• Two gas pipeline projects of Relogistics Infrastructure and Gas
Authority of India Ltd have got in-principle approval from
Karnataka State government.
• Reliance (Relogistics) will lay 455-km of gas pipeline through
Chennai-Bangalore-Mangalore at a cost of Rs 6,796 crore,
GAIL will lay 746-kms of gas pipeline from Dhabol to Belgaum
and Bangalore at a cost of Rs 4,544 crore. These pipelines are
expected to help the industries as well as the State's
proposed gas-based power plants along the pipeline route.
• Oil refinery project at Rs 8,655 crore in Dakshina Kannada is
mooted by Mangalore Refinery and Petrochemicals Ltd,
• Solar energy producer Azure Power plans to start a solar
plant each in Kolar and Bagalkot and add 12 MW to the grid
in 18 months. Azure would invest between Rs 200 crore and
Rs 225 crore in both the plants.
• Karnataka Power Corporation may build a 2.5 million metric
ton-a-year liquefied natural gas import terminal at Karwar
port in Karnataka to help fuel a new plant. The terminal will
supply gas to the planned Tadadi plant, which is expected to
have a capacity of 2,100 megawatts that will later be doubled
to 4,200 megawatts.
• In June 2009, the government also approved two captive
power plants - M/s. Athani Farmers Sugar Factory Ltd. in
Belgaum for a 24-MW co-gen power plant and M/s.
SriKumarswamy Mineral Exports in Bellary District for a 12
MW captive power plant.
• Shree Renuka Infra Projects has been given approval to set up
a thermal power plant at an investment of Rs 5,500 crore
• Engineering and construction major Larsen & Toubro (L&T)
plans to set up a 1,600 MW power plant in Karnataka and has
bid under the PPP model along with KPCL for a coal-based
power plant involving an investment of Rs 10,000 crore.
• Bharat Heavy Electricals has been contracted by KPCL to set
up an eco-friendly grid-interactive solar power plant of 3MW
capacity, on turnkey basis. The company will invest Rs. 420
million in the solar photovoltaic power plant at Yapalaniddi
village in Raichur district. The scope of work in the contract
envisages engineering, manufacture, supply, erection and
commissioning of the equipment, besides operation and
maintenance of the plant for three years thereafter. The plant
will be completed in a schedule of eight months .
Under the Annual Plan 2010-11, details of the proposed power
projects are as follows:
• Raichur Thermal Power Station - KPCL has taken up the new
unit of 250 MW capacity plant for implementation by utilising
the infrastructure facilities available in RTPS at a project cost
of Rs. 1046 crore. The annual energy generation would be
1752 MU.
• Bellary Thermal Power Station Unit – II - KPCL is adding
another unit of 500 MW capacity at BTPS by utilizing the
infrastructure facilities available in BTPS at a cost of Rs. 2261
crore. The gross energy generation would be 3504 MU per
year.
• Grid Connected Solar Photo Voltaic Power Plants- KPCL is
establishing Grid connected Solar Photo Voltaic power plants
in three districts viz. Kolar, Raichur and Belgaum each of 3
MW capacity.
• Gundia Hydel Scheme (400 MW) - The proposed Gundia
Hydel scheme with an ultimate installed capacity of 400 MW
is located in Hassan / Dakshina Kannada District. It would
generate 1002 MU of energy per annum. The cost of the
project is Rs.1333.00 crore
• Yeramarus (2 x 800 MW) & Edlapur (1 x 800 MW)Thermal
Power Stations
• Bellary Thermal Power Station, Unit-3, (1 x 500 MW)
• Gas Based Tadadi Combined Cycle Power Plant, (2100 MW)
• Shivanasamudra Seasonal Scheme : (345 MW)
• Additional Unit at Munirabad Hydro Power Station: (10 MW)
• Wind energy project : (500 MW)
Irrigation: About 28.3% of Karnataka’s net sown area is served by
irrigation facilities, mainly tube wells and canals. While 31.32 lakh
hectares were irrigated in 2007-08, the cumulative irrigation
potential created under major, medium and minor irrigation (only
surface water) up to the end of 2009-10 is 34.84 lakh hectares, as
against an estimated total irrigation potential of 45 lakh hectares
comprising of 35 lakh hectares under major and medium
irrigation and 10 lakh hectares under minor irrigation projects. So
far 47 Major and medium projects which have been completed
have created irrigation potential of 8.96 lakh hectares. 25 major
and 53 medium irrigation projects which are under
implementation, have so far created 15.32 lakh hectares of
irrigation potential. An additional irrigation potential of 0.65 lakh
hectares is anticipated during 2010-11 through major and
medium irrigation projects, consisting of 0.48 lakh hectares under
plan projects and 0.17 lakh hectares under projects pending
approval. Through the Upper Krishna project alone, a potential of
0.10 lakh hectares is anticipated in 2009-10. Under minor
irrigation (surface water), the additional potential, which will be
created this year, is 0.10 lakh hectares, leading to a total of 0.75
lakh hectares from the three categories .
The Minor Irrigation Department has established the Karnataka
Jala Samvardhana Yojna Sangha for monitoring and speedy
implementation of minor irrigation works with aid from the
World Bank. Under this project, the department will rejuvenate
2000 tanks in nine districts namely, Kolar, Tumkur, Bidar, Bellary,
Chitradurga, Bagalkote, Haveri, Raichur and Koppal. Water Users
Co-operative Societies have been established in the command
areas and they are empowered to collect water rates.
During 2010-11, 14 major and medium irrigation projects
including Upper Krishna Project Stage-I and II, Karanja,
Bennethora, Amarja, Ghataprabha 3rd Stage, and
Ubrani-Amrutapura would be completed and 56,000 hectares
of land (more than 1.35 lakh acres) would be provided
with additional irrigation. Besides, field channels would be
constructed in 2 lakh hectares of land. In 2010-11, Rs. 4,256
crore would be provided for major and medium irrigation
projects including Accelerated Irrigation Benefit Programmes.
Transportation
Road Network: Karnataka is a State well connected to all parts
of India through 14 National Highways (NH), accounting for
about six per cent of total NH network in India. District centres
are connected to each other through 114 State Highways (SH)
and the total road network of NH, SH and district roads is about
52,000 Kms.
The Government intends to upgrade all the State Highways from
single lane roads to double lane roads in the coming three years,
a plan that calls for total expenditure of Rs. 3000 crore.
Factors such as high growth in traffic, movement of High Load
Vehicles, need for increased connectivity with interiors as well as
other States, risk of road accidents, high transit time due to traffic
jams etc. have precipitated the need for high investment in road
development. The Task Force set up by the Karnataka government
in 2000 had recommended higher level of private sector
participation in construction of new road links, bypasses and
reconstruction of bridges. The ‘Policy on Road Development’
formulated in 1998 has been replaced by a new policy in 2009
which stresses the need for capacity building, institutional
strengthening and facilitating public private partnerships.
Under the present programmes, development of 66,000 km of
core roads has been planned in three phases:
• Phase I - 10,000 kms that are organised in 52 packages
• Phase II - 40,000 kms
• Phase III - 16,000 kms
Further, 12600 Km village roads have been earmarked for
development.
Under the policy, the State Highways Authority has development
and planning rights over a length of 1 km on each side for 2L
carriageway, 2 kms on each side for 4L carriageway and 3 km on
each side for 6L carriageway. The first rights of development
should be given to the developer at the rate of one acre for
every 5 kms to provide for way side amenities. In addition
• A corpus fund of Rs. 500 crore to KRDCL is being proposed
• Multilateral Agencies will be tapped for funding
• Banks being roped in to fund the investment.
• KRDCL will work as a partner with a concessionaire for
66,000 km Core Road Network.
• KPWD, KRDCL, IDD will provide all necessary support for
implementation of project.
• An amount of Rs. 50 crore will be provided to make a
four-lane road between the twin cities of Hubli -Dharwar.
PPP in road sector development - Public Private Partnership Karnataka Port Policy aims at the development of port
models such as ‘Build-Operate-Transfer‘ (Tumkur-Nelmangala, infrastructure and facilities creation through private investment
Elevated Expressway to E-City) and Annuity projects (Bangalore- which would in turn boost the industrialization and support
Maddur) are being proposed for road development. Karnataka maritime related industries. While the policy lays down the
government is also planning to open the work of rural roads to privatization programme through BOOST model and provides
private sector . full freedom for fixing and revising tariffs, the Government will
undertake acquisition and allotment of land and provide package
Ports: Karnataka has a coastline of around 300 kms between of incentives and concessions on case to case basis.
Karwar (at the north) and Mangalore (at the south) flanked by
Uttara Kannada and Dakshina Kannada districts, with favourable (in ‘000
tonnes)
and strategic port locations. The entire coastal belt as well as the
Name of the 2005-06 2006-07 2007-08 2008-09 2009-10
adjacent districts are rich with mineral and natural resources and Port (upto
hence offer very good scope for industrial investment. This belt is Sept.
2009)
well connected by National Highway and the Konkan Railway
broad gauge line, both running parallel to the coastline. Karwar Port 2477.908 2383.2 2715.76 2956.081 828.641
Belekeri Port 1335.939 4054.61 6084.98 1908.474 1151.353
The 10 minor ports of the State are Karwar, Belekeri, Tadri, Malpe Port 16.031 16.228 14.281 6 404
Honnavar, Bhatkal, Kundapur, Hangarkatta, Malpe, Padubidri and Mangalore 82.762 119.05 75.617 88.036 13.463
(Old) Port
Old Mangalore. Out of these ten ports, Karwar is the only all
Total 3912.64 6573.09 8890.63 4958.591 1993.861
weather port while the other nine are the reverine anchorage
lighterage ports. Source: Karnataka Ports & Inland Water Transport

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

Major ports
due to the global slowdown, the economic recovery in 2010 has
New Mangalore Port
brought back the urgent need to upgrade the capacities at ports
Karwar Port
in the State.

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

proposed at Tadadi in Uttara Kannada district on a public-private
partnership model. About 1,400 acres of land have been
earmarked for the Tadadi Port project of the 1,820 acres available
with the Government. The port is slated to have a design capacity
of 34.25 million tonnes (MT) per annum. KSIIDC is the nodal
agency for the implementation of the project and the project is
expected to cost Rs. 3,000 crore.

Air Transport

Bangalore and Mangalore are the key airports in the State.

The Karwar port being one of the best natural harbors, is being
upgraded under Port Development Project and on its
completion will offer better and increased berthing and docking
facilities to large sea faring vessels.
Presently, international flights from Mangalore International
Airport operate to countries located in Middle East, while the
main airport, the Bangalore International Airport, is well
connected to domestic and global destinations. The Bangalore
International Airport (BIAL) developed under a Public Private
Partnership framework at Devanahalli, in the outskirts of
Bangalore started operations in May 2008. A State-of-the-art
international airport, BIAL is the first airport to be built in the
country on a PPP mode and has been a resounding success.
The Bangalore Airport has been handling an increasing number
of aircraft, passengers and freight, as economic activity has raised
demands for higher traffic.
Minor Airports/Low Cost Airports: New minor airports
proposed at Hassan, Mysore and Gulbarga are at various stages
of approvals/ completion. Government and private sector
companies have proposals for low cost airports costing about
US$4.8 million per airport at multiple locations in State. The
government plans to develop 10 airports, 13 airstrips and 28
heliports in the State, covering the entire State with quick access
to air transport.
The status update on Minor Airports in Karnataka is as follows:
Mysore Airport: 175 acres of land in Mandakalli near Mysore has
been handed over to AAI for revival and expansion, the MOU
was signed in 2005 between the Airport Authority of India /
Government of India and Government of Karnataka. While
addditional land is being acquired for shifting of National highway,
construction of the airport is under progress.
Mangalore Airport: 187 acres of land has been handed over to
AAI for expansion and development, up gradation work is under
progress and the government is committed to acquiring
additional land for extension of the runway and construction of
approach road, if needed. A new runway for operation of AB-320
type of aircraft in all weather conditions is under construction.
Gulbarga Airport: 567 acres have been acquired near Sreenivasa
Saradagi village in Gulbarga.
Hassan Airport: 474 acres and 10.5 guntas of land have been
allotted in Bhuvanahalli village near Hassan abutting the
Bangalore-Mangalore National Highway. Land acquisition has
been completed and the Public Works Department of
Government of Karnataka has been assigned to develop this
airport on PPP basis and to seek approvals/clearances from GOI
and other statutory authorities.
Belgaum Airport: Government Order was issued in October
2006 to acquire 370 acres of additional land for expansion and
development. While the land acquisition is under progress, AAI is
upgrading the Runway,Terminal Building and Apron Taxiway.
Bijapur Airport: The Karnataka government has signed a
memorandum of understanding (MoU) with infrastructure
development company, Marg, for developing a green field airport
at Bijapur. The airport will initially cater to smaller aircraft like ATR
72 or ATR 42.
The government has already initiated steps to develop another
greenfield airport at Shimoga and upgraded Mysore airport.
Steps are also on to expand Hubli and Belgaum airports in north
Karnataka. The State government is also in talks with the Indian
Air Force to give permission to use airport at Bidar.
Railways: With the rail network of 3000 kilometers, Karnataka is
well connected with other parts of the country. Intra State rail
connectivity, especially on the key lines for passenger and freight
movements, needs to be augmented. There are extensive projects
being developed under the PPP mode in the State for the
expeditious development of key railway lines such as gauge
conversion of Hassan-Mangalore freight line, Hubli-Ankola lines etc.
K-RIDE is a Special Purpose Vehicle between Sate Government,
Railways and other investors with the objective of developing and
implementing rail infrastructure projects in Karnataka with a
private sector participation wherever found feasible / viable.
Ongoing projects: Presently 6 projects at a cost of Rs. 2029.00
Cr. (969 km) are under implementation by Railways
• Sholapur – Gadag (GC)
• Shimoga – Talaguppa Gauge Conversion Project.
• Kottur-Harihar New Railway Line
• Bangalore-Ramangaram-Mysore Railway Doubling
• Bidar-Gulbarga New Railway Line
• Munirabad-Mehboonagar New Railway Line.
• Road over Bridge / Road under Bridge (RoB/RuB)
In addition, Hassan Sakhleshwar Mangalore line gauge
conversion is under progress.
The Karnataka Budget 2009-10 also proposed the extension of
BARL Railway Network to implement a super fast train from the
city to Bangalore International Airport under PPP mode. In
addition to the projects above raising the rail network in the
State, other related projects include those in urban infrastructure:
Metro rail and mono-rail projects in Bangalore that are already
underway and the Mysore Metro Rail Project where the
preliminary feasibility has been considered.
Special Economic Zones (SEZ) are specifically delineated
duty-free enclaves for promoting exports. The SEZ Act 2005,
enunciated by the Government of India and the consequent SEZ
Rules 2006 govern the establishment of SEZs in the country. The
Karnataka State SEZ Policy 2009 has been detailed in section 10
and shows the commitment of the government to support and
facilitate setting up of SEZs in Karnataka. So far, the Board of
Approval has granted formal approval to 52 SEZ projects in the
State with investment of around Rs 29700 crore and
employment potential of about 11 lakh.
• Out of 52 SEZs, 41 are IT/ITES, 3 are B.T and 8 are Product
Specific SEZs.
• 28 SEZs have been notified and 15 are operational. Profile of key cities in Karnataka
• Investment made in notified SEZs is Rs 8560 crore, which City / Population Urban Annual Total Annual Total
Indicator Households Household Household
includes Rs 2600 crore of FDI. Income Savings
• Exports from the SEZ during 2007-08 totalled Rs 1673 crore
(Number) (Rs. Crore)
and during 2008-09 were Rs 7227 crore.
Bengaluru 6,763,073 1,749,845 60,185 19,177
Belgaum 1,109,580 238,954 5,880 1,509
Important SEZs in the State include :
Mysore 1,075,977 253,988 7,038 2,376
• Sector-specific SEZ for Pharma & Biotechnology at Hassan
Gulbarga 1,007,125 185,079 4,551 805
• Sector-specific SEZ for Food Processing and Agro-based
industries at Hassan Mangalore 851,843 181,682 5,644 1,734

• Sector specific textile SEZ at Hassan Source: City Skyline of India 2008-09, Indicus Analytics
Note: Savings and Income are for Urban Households
• IT SEZ at Mangalore
• Coastal SEZ at Mangalore

Karnataka - Its urban infrastructure

Bangalore, the most affluent city of Karnataka
Socio- economic SEC SEC SEC SEC
This section examines the urbanisation scenario in the State
Classification A B C D&E
and presents data on the cities in Karnataka – demography,
Bengaluru 14% 23% 30% 33%
consumer markets, employment trends etc. It highlights the
plans of the government to develop infrastructure in Tier II and Mysore 11% 21% 29% 48%
III cities and in the major cities and also briefly presents Mangalore 5% 20% 27% 40%
Bangalore as the Expo-Hub of the country.

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

Consumer Market Size
the State’s population lives in urban areas. Karnataka’s urban
City Market Size* Market Size
population is likely to grow by 35% in the next 20 years and Growth Rate#
reach 2.8 crore in 2026 from the current 2.08 crore. The three Rs. crore %
major cities of the State Bangalore , Mysore and Mangalore
Bengaluru 41,008 13
account for over 40 per cent of its urban population:
Mysore 4,662 12
Belgaum 4,371 12
• Bangalore, the capital and largest urban metropolis of the
Mangalore 3,910 12
State
Gulbarga 3,746 11
• Mysore, emerging as an alternative destination to Bangalore in
service and tourism sectors Source: City Skyline of India 2008-09, Indicus Analytics

• Mangalore, with its ports, educational institutes, hospitals and Note: *Market Size-Total annual consumption expenditure (in Rs. crore) of all
urban households. # Growth rate between annual total expenditure of urban
banks, is fast emerging as a hub in services, logistics and households between 2006-07 & 2008-09
manufacturing.

Bangalore stands out as the most affluent city of the State, with
14% of its population in SEC A category. Not only is the market
size of Rs. 40,008 crore ten times more than other cities in
Karnataka, the population is in tune with global standards and
consumer products. As the main economic centre of the State,
Bangalore has seen the highest employment generated compared
to other States over the decade 1991-2001. However, this has
led to a significant burden on the urban infrastructure and the
proposed projects to cater to the increased demand are detailed
in the section below.
Employment Trends
Under the Suvarna Karnataka Development Corridor
Programme, industrial corridors and zones have been planned
across the State, with the objective of accelerating development
of industrial growth through infrastructure support. These
corridors will benefit many smaller urban areas by raising the
core infrastructure such as energy, road and rail linkages and
urban infrastructure. The corridor proposes to cover 11 district
headquarters and more than 20 major towns along the
highways/major roads and rail links.
Emerging Industrial Centers of Karnataka and their features:
Mangalore
• Salubrious climate, congenial environment, rich culture,
cosmopolitan lifestyle, excellent health care and education
facilities
• Located on the coast of Karnataka at a distance of 357 kms
west of Bangalore
• Connected to Bangalore, Cochin and Mumbai by National
Highways
• Connected to Bangalore, Cochin and Mumbai by broad gauge
railway.
• A Software Technological Park has been established in
Mangalore to cater to the needs of IT Industries.
• Presence of IT Giants - Infosys, Wipro.
• Coastal SEZ - ONGC with an investment of 25,000 crore
• Presence of Sector Specific IT SEZ .
• Presence of multinationals and petrochemical giants- BASF
India Ltd and Elf Gas Ltd.
• Oil transportation infrastructure - A pipeline for carrying
petroleum products from Mangalore to Bangalore.
• Presence of international quality hotels.
• International airport at a distance of 12 KM from Mangalore.
• New Mangalore port provides excellent shipping facilities
• 6 medical colleges, 4 dental colleges, 5 engineering colleges, 6
polytechnics, 70 degree colleges provide skilled manpower.
National Institute of Technology, one of the premium
institutions of the country, at Suratkal provides excellent
skilled training and research facilities.
• Agri resources - cashew, rubber, cocoa, areca nut, tobacco
grown on large scale.
Mysore
• A well-equipped export centre will be established at Mysore
for exporting industrial products
• Royal City- Salubrious climate, congenial environment, rich
culture, cosmopolitan lifestyle, excellent health care and
education facilities.
• City of palaces with great potential for heritage tourism and
wild life tourism.
• Located 135 kms south west of Bangalore connected by 4
lane express highway. Also connected by broad gauge railway
line.
• Bangalore Mysore Infrastructure Corridor project - 6 lane
highway under implementation.
• Air strip located at a distance of 7 KM from Mysore and
domestic air port under implementation.
• Nearest port – Mangalore at a distance of 265 kms
connected by rail and road. Chennai port is at a distance of
460 kms.
• 6 industrial areas with 3872 acres of developed land in the
district. Two more new industrial areas being developed
around Mysore city.
• Availability of water in plenty and quality power.
• More than 10 private SEZs under implementation.
• Availability of skilled manpower - 5 engineering colleges, 2
medical colleges, 2 dental colleges, technical institutes.
• Presence of IT giants like Infosys, Wipro, L&T etc
• Presence of Research Institutes - CFTRI,DFRL, CIPET.
• Major Industries- Vikrant Tyres, BEML, L&T, TVS, Reid and Taylor,
AT&S, Chamundeshwari Silks, Jubilant Organosys Ltd.
• Presence of Five Star Hotels, clubs, water parks, amusement
parks, getaways and other recreational facilities.
• Agri resources-Tobacco is grown on large scale
Hubli –Dharwad
• Salubrious climate, congenial environment, rich culture,
cosmopolitan lifestyle, excellent health care and education
facilities.
• Located on the Bangalore-Pune 4 lane National Highway, at a
distance of 410 kms from Bangalore and 675 Kms from
Mumbai. National Highway No 63 connects to Karwar and
Hyderabad. National Highway 218 connects to Solapur.
• Hubli airport at a distance of 10 kms from Hubli. Belgaum
airport at a distance of 50 Kms and Goa airport at a distance
of 135 kms.
• Shipping facilities - Karwar port at a distance of 140 Kms is
connected by a national highway. Goa port at a distance of
135 kms. Broad guage rail connectivity to Bangalore, Mumbai
and Hyderabad and Goa.
• Hubli has an STPI and an electronic city to cater to the needs
of electronics and IT industries.
• Education hub- Presence of Karnataka University and the
 University of Agricultural sciences. 3 engineering colleges, 2
medical college, 1 dental college, 8 polytechnics, and number
of graduate and post graduate colleges provide skilled
manpower.
• Presence of industries like Kirloskar Electric, Telcon,
Murdeshwar Ceramics
• 8 Industrial Areas with 3294 acres of developed land in the
district including Growth Centre at Belur, 12 kms from
Dharwad on NH-4.
• Presence of star hotels.
• Agri Resources-Red chilli grown in abundance.
Belgaum
• Salubrious climate, congenial environment, rich culture,
cosmopolitan lifestyle, excellent health care and education
facilities.
• Excellent Connectivity - Located on Bangalore - Pune 4 way
National Highway at a distance of 506 kms from Bangalore.
Connected to Goa by National high way.
• Connected to Mumbai, Bangalore and Goa by broad gauge
railway line.
• Connected by air - Airport at a distance of 20 kms from
Belgaum city.
• Good shipping facilities - Nearest port, Goa is at a distance of
135 kms. Karwar port at a distance of 160 kms and Mangalore
port at a distance of 445kms.
• Foundry Cluster at Belgaum offers excellent scope for
Engineering Industries
• Good infrastructure - 4 industrial areas in the district with 289
acres of developed land.
• Availability of skilled manpower- 4 engineering colleges, 2
medical college, 1 dental college, 2 management institutes ,12
polytechnics, and other degree colleges provide necessary
skilled manpower.
• Presence of major industries -INDAL Aluminium Factory, Tata
Power, Forbes Gokak, many sugar industries.
• Agri Resources- Sugarcane, Cotton, Tobacco
Tumkur
• Tumkur district is located north-west of Bangalore at a
distance of about 70 kms. The district is bounded by Mandya
district in the South; Chitradurga and Hassan districts in the
west; Chikamaglur in the northeast and Ananthapura district
of Andhra Pradesh State in the southeast direction.
• Tumkur town is the administrative head quarters of the
district and is a centre for commercial, business and
educational activities.
• It is home to Tumkur University, 4 engineering and 1 medical
college and other institutions of importance.
• The district consists chiefly of elevated land intersected by
river valleys. The district is famous for its iron ore deposits.
• Tumkur has good networks of rail and road. The city is
situated on the National Highway No.4.
• The city is on the broad gauge train route from Bangalore to
Shimoga and Hubli via Kadur.
• Good infrastructure- 7 industrial areas in the district with
1240 acres of developed land.
• Existence of major industries –HMT Watch factory, TVS
Electronics, Wipro, Karmobiles, Johnson Tiles, Mysore Cements,
Kirloskar Electrical Limited etc.
• Agri Resources- Coconut, Groundnut and Ragi
Kolar
• A landlocked district, Kolar is the eastern gateway to
Karnataka. Kolar is popularly known as the golden land of India
owing to its famous Kolar Gold Fields.
• Kolar district is located in the southern region of the State of
Karnataka. It belongs to the semi-arid drought-prone region of
the State.
• The district is bounded by the districts of Bangalore and
Tumkur on the west and on all other sides by the districts of
the adjoining States of Andhra Pradesh and Tamil Nadu. On
the north, it is bounded by Anantapur district; on the east by
Chittoor district of Andhra Pradesh and on the south by the
districts of Krishnagiri and Vellore of Tamil Nadu.
• Kolar has no airport. The nearest air port to the town is at
Bangalore. Bangalore International Airport is at a distance of
85 kms.
• Good shipping facilities- Nearest port, Chennai is at a distance
of 330 kms.
• Good infrastructure- 4 industrial areas in the district with 617
acres of developed land.
• Availability of skilled manpower- 2 engineering colleges, 2
medical college, one dental college, two management
institutes, 12 polytechnics, and other degree colleges provide
necessary skilled manpower.
• Food Park in the district.
• Cultivation of vegetables is becoming more popular in the
district. The main vegetables grown in the district are potatoes,
tomatoes, brinjal, beans, beetroot, carrot, chow-chow and
cabbage. Malur is the prime vegetable growing taluk.
Chickballapur taluk is well known for potato cultivation in the
State.
.Shimoga
• Salubrious climate, congenial environment, rich Malenadu
 culture, and good education facilities.
• Located 278 Kms north east of Bangalore connected by
National Highway 206. Also connected by broad gauge
railway line.
• Airport is proposed at Shimoga.
• Nearest Port - Mangalore, at a distance of 186 kms connected
by National Highway 13 and broad gauge rail, Karwar at a
distance of 211 kms connected by National Highway 206.
• 3 industrial areas with 463 acres of developed land in the
district developed by KIADB. 3 industrial eStates in district
developed by KSSIDC.
• Special Economic Zone for auto components promoted by
KIADB is coming up at Machanalahhi, 9 kms from Shimoga on
Shimoga - Bangalore National highway.
• Availability of skilled manpower - 1 engineering college, 1
dental college, 8 polytechnics and other colleges & technical
institutes. New government medical college sanctioned for
Shimoga.
• Major Industries - Mysore Paper Mills, Vishweshwaraiah Iron
and Steel Industries, Perfect Alloy Components, Shantala
Ductile and Grayiron Foundry Pvt Ltd, Pearlite Liners Pvt Ltd
and other alloy casting industries and auto component
industries.
• Agri resources - Areca nut, paddy, sugar cane – great potential
for areca nut based industries.
Hassan
• Salubrious climate, congenial environment, rich culture,
cosmopolitan lifestyle, excellent health care and education
facilities.
• Located at a distance of 190 km north west of Bangalore on
National Highway 48, connecting Bangalore and Mangalore.
• Famous heritage sites - Belur, Halebid and Shravanabelagola
around Hassan city known for world famous sculptures.
• Nearest port - Mangalore, at a distance of 170 kms.
• Land acquired for airport at Hassan. Nearest airports are at
Bangalore and Mangalore
• Ideal destination for investment – Presence of sector specific
SEZs viz 1.Pharmaceuticals & Biotechnology 2.Food
Processing and Agro Based Industries 3.Textiles
• 4 industrial areas with 2184 acres of developed land in the
district.
• 2 engineering colleges, 1 dental college, 1 ayurvedic college, 3
polytechnics and 20 other degree colleges provide a large
pool of skilled manpower.
• Technology hub - ISRO Master Control Facility at Hassan.
• Spice Research Institute at Sakleshpur.
• Agri resources - Coffee and potato grown on large scale.
Raichur
• Congenial environment and good education facilities.
• Abundant mineral resources like quartz , soap stone offer
great potential for mineral based industries.
• Located 416 kms north of Bangalore connected by good road
and by broad gauge railway line. Also connected to Mumbai
and Hyderabad by rail.
• Nearest airport - Hyderabad at 200 Kms, Hubli Airport at a
distance of 324 kms.
• Nearest Port – Goa and Karwar ports at distance of around
500 kms. Mangalore port at a distance of 595 kms.
• 3 industrial areas with 2350 acres of developed land in the
district .
• Availability of skilled manpower - 2 engineering colleges, 1
agricultural science college and other colleges and technical
institutes.
• Major industries- Raichur Thermal Power Plant with annual
generation of 10,000 million units, Hutti Gold Mines, Mysore
Petro Chemicals Limited, Raichur Solvents, Vishal Cotspin etc.
• Agri resources- Paddy, cotton and horticultural crops,
tremendous potential for agri based industries
Gulbarga
• Gulbarga is located on the northern side of the State. The
entire district is situated in the Deccan Plateau and the
general elevation ranges from 300 to 750 meters above mean
sea level. Two main rivers, Krishna and Bhima, flow in the
district.
• Gulbarga is an industrially backward district, but presently is
showing signs of growth in the cement, textile, leather and
chemical industries.
• It is also very important from tourism point of view, with
the most popular tourist destination being the Gulbarga Fort.
• Hyderabad Airport is the nearest airport to Gulbarga city
(225kms).
• Gulbarga is an important station on the Central Southern
Railway line. There are daily trains from Bangalore, Mumbai,
Delhi and Hyderabad.
• There are frequent buses from Bangalore and Hyderabad
to this city. Bangalore and Hyderabad are 610 kms and 225
kms away from Gulbarga respectively.
• Gulbarga has a university and availability of skilled
manpower is not a problem with 4 engineering colleges, 6
medical colleges, 8 polytechnics and other colleges & technical
institutes.
• Major Industries- ACC Cement Limited, Vasavadatta
Cements, Zawar Cements Private Limited Rajashree Cements,
Renuka Sugars Pvt Ltd, The Ugar Sugar Works ltd.
Projects under implementation in the State in urban
infrastructure:
Bangalore Megacity Scheme - The Megacity Project envisages
the overall improvement in the quality of life of citizens by
providing developed infrastructure facilities, modernized
transport, road safety, environmental improvements, slum
upgradation, easing of traffic congestion by construction of
flyovers and under ram, pedestrian subways etc. A total of 54
projects amounting to Rs.800.07 crore have been sanctioned for
the Megacity Project. So far, 16 projects have been completed.
Subsequently the Megacity Scheme was subsumed in JNNURM.
Accelerated Urban Water Supply Scheme (AUWSP): An
upcoming project that the Karnataka Government has given its
nod for is the US$ 163 million drinking water project. The
Government has decided to extend the 24x7 water supply
scheme to the entire city corporations of Hubli-Dharwad,
Belgaum and Gulbarga. water supply will be augmented in
Hubli-Dharwad City Corporation by taking water from
Malaprabha river and from Ghataprabha river for Belgaum city.
The major focus of the project is on physical investments in the
system, and strengthening of institutions for service delivery.
Another set of projects to be cleared by Central government
under JNNURM include remodelling of storm water drainages in
Byatarayanapura (Rs 117 crore), Krishnarajapura (Rs 118 crore),
Rajarajeshwari Nagara (Rs 142.74 crore) and development of 17
lakes (Rs 191.43 crore).
The Chief Minister’s Small & Medium Towns Development
Programme was launched in 2009-10 to provide additional grants
to smaller ULBs like City Municipal Councils and Town Municipal
Councils to improve infrastructure and urban governance in tier II
and tier III cities. The total outlay of the programme is more than
Rs. 1,400 crore and is expected to be completed within a two
year period.
JNNURM – Bangalore and Mysore are the two cities being
developed under the central government programme, Jawaharlal
Nehru National Urban Renewal Mission.
The Draft Urban Development Policy 2010 for Karnataka has
suggested the establishment of the Karnataka Urban Renewal
Mission to focus on infrastructure development in small and
medium cities as not all the cities in the State are eligible for
funds under the Jawaharlal Nehru National Renewal Urban
Mission (JNNRUM) scheme. In such a situation, a Karnataka
Urban Renewal Mission would help give proper attention to
those cities that are now outside the ambit of JNNRUM. The
draft policy has also suggested the establishment of metropolitan
planning committee for Bangalore, Hubli-Dharwad and Mysore,
and district planning committees in other areas.
Bangalore Metro Project, implemented by the Bangalore Metro
Rail Corporation Ltd, covers a length of 33 kms, costing Rs.5,453
crore. The project will be completed by 2011 and will provide
the much needed transport infrastructure to the city of
Bangalore. The Bangalore Metro has been designed for a capacity
of 40,000 PHPDT. The number of passengers expected to travel
on the metro everyday is estimated at 10.20 lakh in 2011 and
16.10 lakh in 2021.
ABIDe - Agenda for Bangalore Infrastructure and Development
Task Force is an initiative of the Chief Minister Dr. B.S.
Yeddyurappa and the Government of Karnataka to build a better
Bangalore for its citizens by adopting a new urban planning
model, upgrading infrastructure and improving social facilities to
create a better environment for a good quality of life.
ABIDe TASK FORCE DELIVERABLES:
• Comprehensive Integrated Development plan for entire
Bangalore, wardwise
• (Plan Bangalore 2020) with immediate (2008-2009), medium
(2008-2012) and long
• term (2008-2020) objectives and budgeting and financing
perspectives as well.
• Review all various existing plans.
• Budget and Financing Plan for Plan Bangalore (Finance
Bangalore) that will include increasing Revenues (by increasing
per capita revenue of City) and by minimizing dependence on
government funds for long term financing (Private Public
Partnership, raising of direct funds, Government funding etc).
• Regular Reviewing and overseeing the implementation of the
various projects of Plan Bangalore and the agencies involved.
• Make recommendations on the Bangalore governance
restructuring (Govern Bangalore).Objective is to reduce
multiplicity in planning and create a coordinate structure for
execution and financing of Plan Bangalore including the
restructuring of Planning. Investment/Financing, Project
Execution and Public service Delivery/maintenance of
organizational structures of Bangalore City with a view of
ensuring better costs, better services, transparency and citizen
involvement. Ensure government accepts recommendations.
• Create a permanent platform for “citizens-government”
interaction-Involve Bangalore)
 a. Website and News letter (English and Kannada)
(Bangalore.gov)
b. 6 monthly State of City survey, State of city summit /
progress report.
Scope and Coverage of Plan Bangalore 2020
• Road, Traffic Management and Transportation
• Water and Sanitation
• Urban Poor
• Citizen Centric Governance
• Heritage and Environment
• Education & Health
• City Facilities
• Policing, Law and order and Enforcement
• Power
• Airports & Railway Stations
Bangalore: Bangalore is recognized as the Knowledge Capital of
India and has emerged as the most preferred destination for
frontier technologies like Information Technology and
Biotechnology. Bangalore is the city to showcase technology now.
Bangalore IT and Bangalore Bio are recognized as India 's leading
events in their fields. The new initiative of launching Bangalore
Nano by Dept of IT, Biotechnology and Science & Technology,
Government of Karnataka is the first step in fostering a business
environment for the development of Nanoscience and the
Nanotech industry. Bangalore Space Expo 2008 was India’s first
space exhibition organised by ISRO, CII and Antrix Corporation
Ltd. Huge participation from domestic and foreign companies –
Hindustan Aeronauticals Ltd. Arianespace (France), Infinisat
(USA), European Space Agency, Israeli Space Agency etc.
The Bangalore International Automotive Expo, the largest in
Southern India, showcases over 500 global automotive brands,
designs and technology to more than 100,000 visitors comprising
buyers, industry leaders, suppliers, government officials and the
media.
Bangalore is in fact the expo hub of the State and the country,
organising conventions on State of the art technology front.
BIEC( Bangalore International Exhibition Centre) is India’s first
‘LEED Certified’ Green conference and exhibition facility.
Sprawled over 34 acres, near Peenya Industrial township of
Bangalore, the beautifully landscaped complex has 40,000 sqm of
covered column-less air-conditioned exhibition space (three
exhibition halls), a multi-facility conference centre spread over
5,600 sqm including 4 Conference Halls, a Helipad, an
Amphitheater, VIP Lounge, Food Court of 7500 sqm, a Machine
Tool Training Centre, and large outdoor area. It also has an
infrastructure to distribute 11 MW of power supply. With the
above facilities BIEC has been able to cater to well over 20,000
business visitors per day on several exhibition days. BIEC is today
the first choice of all major exhibitions/events/conferences
organizers from all over the world. BIEC caters to all industry
segments such as engineering, auto, furniture, medical, energy,
tourism, biotechnology, food processing, agriculture, textiles,
printing, logistics and material handling, industrial automation,
electronics, IT and other sectors.
Some of the leading exhibitions already held and scheduled at
BIEC are IMTEX, EXCON, BANGALORE BIO, INDIA ITME,
BANGALORE IT.COM, INDIA WOOD, IETF & IHF, DIEMOULD,
EXPODENT, ELECTRONIC INDIA, INTERNATIONAL
COMMERCIAL VEHICLE EXPO, ELCA, MDA, INDUSTRIAL
AUTOMATION & CeMET INDIA, STONA, VIV, ASIA PRINT
EXPO, BUILDARCH & BUILD UP, BANGALORE SPACE EXPO,
INSTORE ASIA, etc.
Its international standards have received much acclaim and BIEC
is a member of UFI- The global association of exhibition industry
and IAEE - International Association of Exhibitions and Events.
Deutsche Messe AG - the owners of the world's largest
exhibition facility in Hannover, Germany, has a partnership
arrangement to promote BIEC globally.
Bangalore boasts amusements parks, a planetarium, a water park
and an aquarium – all of which are of interest to tourists and for
residents of the city. Bal Bhavan is one of the city’s most popular
amusement parks. Amusement parks provide excitement and a
way to cool off while having fun. Bangalore is the best place to
experience adventure sports in India. From waterfalls to rough
terrain, lakes and centuries old caves, Bangalore has lots to offer
explorers. There are ample opportunities to enjoy aero sports,
river rafting, rides at amusement parks, boating on lakes, fishing, go
karting, para gliding, cave exploration, cycling etc. The hills in
Ramnagara are located around 20kms from Bangalore, and are
very popular among rock climbers. The Sri Revanna Sideshwara
hills are the biggest draw; and the forested area that surrounds
the hills has been proposed as a wildlife sanctuary. The unique
wildlife found in this scrub jungle vegetation and also the
prehistoric rock formations are a popular attraction for tourists
and adventure enthusiasts.
The cities of Karnataka are not just centres for industry and
commerce but also major sites for tourism and sports. For
instance, another innovative experience coming from Karnataka
in recent times is the Toyota Karnataka Golf Festival, another
example of the partnership between the tourism department
and the private sector in boosting novel forms of tourism in the
State. Sponsored by Toyota Kirloskar Motor Pvt. Ltd. the
tournament brought more than 250 amateur and corporate
golfers on the course in October 2009. Golf courses in Karnataka
have been upgraded at a cost of Rs. 20 crore and apart from
Bangalore, Mysore, Chikmaglur and Belgaum are other towns
where the sport is popular.
Karnataka - A workforce that delivers
Skilled manpower base in the State has attracted global and
domestic majors. The State leads all the others in India in its
labour supply ecosystem and this section also describes the
government’s efforts to maintain this lead through a pro-active
strategy.
The Labour Supply Ecosystem Index created by Teamlease
Services and Indicus Analytics as part of the India Labour Report
2010 ranks Karnataka no.1 in the country on labour supply
parameters or the employability of the workforce. Ranked at 1
together with Goa in the previous study in 2005, Karnataka has
moved up to secure No. 1 place alone, with an index value 107
points above Delhi, ranked 2 in 2009.
institutions that has created a steady source of skilled workforce,
providing a strong base for all economic activity. There has also
been an unfailing emphasis over the years on innovation and
research in cutting edge fields. The Indian Institute of Science, IISC,
India’s premier institution in research and post graduation
education in science and engineering, began in 1909, the first
private-public partnership in the country spread over 400 acres
of land in Bangalore. A pioneer in advancing science and
technology, in 1942 the Institute started the first two year
programme in aeronautical engineering, creating a nucleus of
graduates to serve in the fledgling aerospace industry at that time.
The first State in the country usher the private sector into higher
education, one of the most striking features of higher education
in Karnataka is the extremely high growth in private sector
educational institutes. In university education, the gross enrolment
ratio is at 14% which is higher than the national average.
Karnataka has the third highest number of engineering colleges in
the country and the highest number of medical colleges in the
country. While engineering colleges have an intake of more than
50,000 students per year, general bachelor courses in arts,
commerce and sciences have a total enrolment of more than
200,000 students in the 648 general colleges across the State.

The State has a number of excellent higher education institutions,

set up with public support, that span the entire gamut of
educational disciplines. The universities in Bangalore, Mysore and
States Values 2005 Rank 2005 Value 2009 Rank 2009
Gulbarga have been rated 5 stars by National Assessment and
Karnataka 478 2 607 1
Accreditation Council while IIISc ranks among the top fifteen
Delhi 450 4 500 2
global institutions in the country. National Institute of Technology
Andhra Pradesh 439 5 476 3
Karnataka(NITK) at Suratkal, which is celebrating its golden
Gujarat 418 6 470 4 jubilee in 2009-10, and Visvesvaraya Technology University (VTU)
Goa 478 1 464 5 in Belgaum are leading centres for engineering excellence,
Kerala 417 7 458 6 providing high-quality graduates.
Maharashtra 416 8 448 7
Tamil Nadu 475 3 432 8 Some of the other well known institutions in the State span
Bihar 276 18 429 9 diverse fields:
West Bengal 343 11 426 10 • Indian Institute of Management (IIM)
Punjab 324 14 419 11 • National Law School of India (NLSIU)
Haryana 318 15 415 12 • National Institute of Fashion Technology (NIFT)
Rajasthan 337 12 363 13 • Indian Institute of Social and Economic Change
Uttar Pradesh 334 13 359 14
• National Institute of Mental Health and Neuro Science
(NIMHANS)
Orissa 318 16 356 15
• National Institute of Advanced Studies (NIAS)
Himachal Pradesh 373 9 347 16
• National Institute of Biological Sciences (NIBS)
Madhya Pradesh 362 10 334 17
• National Institute of Animal Nutrition & Physiology (NIANP)
Assam 272 19 207 18
• National Dairy Research Institute
Jammu & Kashmir 284 17 100 19 • National Tuberculoses Institute (NTI)
Karnataka State has a long tradition in higher education
• Centre for Liquid Crystal Research
Industrial development in Karnataka has strong linkages with the
educational infrastructure in the State. For instance, Wipro’s entry
into Karnataka in the early eighties was due to collaborative
efforts with IISc, Bangalore. This relationship holds for other non
IT manufacturing entities too, creating an ecosystem in which
growth flourishes. The Central Food Technological Research
Institute which was established in 1950, chose to locate in
Mysore largely due to the academic environment, the University
of Mysore, proximity to the IISc and the R&D strengths of
Bangalore and the Nutrition Research Laboratories at Coonoor.
The presence of CFTRI in the State has attracted not just
agro-processing firms but also the high-technology biotech
industry to Karnataka.
Karnataka also has the largest number, 1162, of Industrial Training
Institutes in India, making up 15% of the country’s total. These
institutes provide a valuable resource in skilled technicians.
According to an ILO study of these institutes in Karnataka and
Tamil Nadu, ‘The standards at the Karnataka institutes appear to
be higher than those in Tamil Nadu, with more up-to-date
equipment and better training.
Karnataka took up Skill Development as a major development
policy in 2008-09 and a State level corporation, the Karnataka
Vocational Training and Skill Development Corporation was set
up in August 2008 as a special purpose vehicle to implement the
recommendations of the Skill Commission. The Corporation has
the target of providing training and jobs to 10 lakh people in 5
years; an objective it is working towards through organising Skill
N Job Fairs, establishing Help Centres in Employment Exchanges,
establishing e-learning labs in SC/ST post matric hostels in the
State, in association with NIIT and the Social Welfare
Department, introducing an ‘Internship policy’ under the PPP
mode with medium and small scale industries etc.
The State Government has planned to increase the intake
capacity in ITIs to 5 lakh from the present 1.37 lakh, by starting
new ITIs under the PPP mode, establishing 100 Skill
Development Centres at most backward talukas to give training
to rural persons etc. The government has partnered with
Non-Resident Indians to start new State-of-the-art ITIs,
production cum training institutions etc. to utilise the skill and
expertise of the diaspora.
Under the Government of India’s Skill Development Initiative, the
Modular Employable Skills Scheme has been initiated in
Karnataka. In 2009-10, 340 modules were developed in 32
professions for training of unorganise labourers, with priority
given to automobile, construction of building, hospitality and
electronic fields. Under this scheme, the government plans to
train ten million persons, by providing training in the ITIs/ITCs and
at any other location having facilities. More than 400 centres in
the State have registered as Vocational Training Providers under
this programme to impart training through courses in auto
repair, electronics, fabrication, process instrumentation, plastics,
information and communication technology, material
management, soft skills etc.
Karnataka had more than 20 million people in the age group of 5
to 24 years in 2006, pointing to the huge demand for school and
college education. By 2020, there will be on an average 4 lakh
new job entrants every year, add to this the growing aspirations
of a middle class with more purchasing power and the demand
for higher education and hi-technology skills grows in size. The
government recognizes that this demand can be met only
through private sector investment and is giving full support
through its policies to create an enabling environment and
maintain its lead in providing the most employable workforce in
the country.
Karnataka – proactive and effective government
The State government policies encourage investments, as well as
governance achievements on broad parameters such as effective
law and order, e-governance initiatives etc.
The Karnataka State government has always provided an
investor-friendly responsive administration. The Karnataka Udyog
Mitra, set up more than a decade ago, works as single contact
point for all investors - from receiving a proposal to ensuring its
implementation KUM is actively working with the investors at all
stages. The State Level Single Window Clearance Committee and
the State High Level Clearance Committee (for investments
greater than Rs. 50 crore) have been working to clear proposals
in a speedy manner.