The Hindu Business Line : Karnataka IT exports may touch Rs 50,000 cr

Surging ahead
Software exports increased by Rs 10,000 cr to touch Rs 37,600 cr
Hardware exports stood at Rs 2,481 cr
Karnataka contributed the maximum with one-third of the nation's IT exports of Rs 1,00,809 cr

MR M.K. SHANKARLINGE GOWDA, IT Secretary

Bangalore , May 3

IT exports from Karnataka, which grew by 36 per cent in 2005-06 to reach Rs 40,081 crore, are expected to hit Rs 50,000 crore in the current financial year. Software exports increased by Rs 10,000 crore to touch Rs 37,600 crore, while hardware exports stood at Rs 2,481 crore.

Karnataka contributed the maximum with a third of the nation's IT exports of Rs 1,00,809 crore. The State contributed to 37.6 per cent of the nation's exports, up from 34.5 per cent last year, said the joint report by Software Technology Parks of India (STPI) and the Karnataka IT department.

Karnataka's IT secretary, Mr M.K. Shankarlinge Gowda, said as many as 70,000 new jobs were created by the IT sector in the State during FY06. About 201 new companies set up shop in the State during the year, of which 124 were 100 per cent foreign equity firms.

The minor drop in the number of foreign equity firms (from the previous fiscal's 129) is overshadowed by a 17 per cent growth in investments by them. The proposed investment by foreign companies stood at Rs 1,882 crore, compared to Rs 1,607 crore last fiscal. Total projected IT investment is expected to be Rs 2,761 crore.

Infrastructure issue

"This confidence," said Mr B.V. Naidu, Director, STPI, "on their part is heartening." The State's capital suffers from a crumbling image due to its inadequate infrastructure. Yet, global IT multinationals, such as Bearing Point, Apple Computer, J P Morgan and Caterpillar, set up shop in the State over the last year. "With new initiatives that the government is taking on infrastructure, more Fortune 500 and $1-billion firms are expected to come to Bangalore," he added. "Criticism about infrastructure will be taken, we are open to suggestions," said Mr Rakesh Singh, Director, IT & BT.

IT-enabled services (ITeS) and business process outsourcing (BPO) were fast growing sectors, and telecom and IC design houses were also moving into the city. Twenty-five venture capitalist-funded companies were approved during 2005-06. Of the total registered 1,721 firms, over 1,200 were operational and over 200 existing firms expanded their operations during the year.

Hardware sector

Seven new hardware companies were approved during the fiscal. The hardware industry grew by 40 per cent from Rs 1,768 crore exports recorded in 2004-05. Growth of over 35 per cent is expected next year, said Mr Naidu. Around 100 chip design firms operate in the State.

Mysore and Mangalore experienced over 30 per cent growth. "Exports from Mysore stood at Rs 392 crore in 2005-06 and is expected to be Rs 600 crore next year. Mangalore will do Rs 1,000 crore by 2007," said Mr Gowda. Over the last year, investment of Rs 1,800 crore was approved for a 1,000-acre land in Mysore, he noted.

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