Industrial Infrastructure

Global Investors’ Meet - 2012
Karnataka: Industrial Infrastructure
Karnataka: Industrial Infrastructure Profile
Page 1

Industrial infrastructure in India:
Foundation for Economic Growth
India’s infrastructure
► India's industrial production growth rate in 2010
was 7.5 percent, up from 5.2 percent in 2009.2
►
►
Pharmaceutical, automobile and IT industries
are also sectors that have performed
exceedingly well and experienced significant
growth.5
The textile industry is the largest industry in
terms of employment and is expected to
generate $85 billion by 2010 and create 12
million new jobs4
Growth in exports from SEZ (in US$ Billion)
50
46
40
CAGR 76%
30
20.8
20
13.9
10 4.8
7.2
0
2005-06 2006-07 2007-08 2008-09 2009-10
Source: SEZ India
►
►
Thestronglevelofeconomicgrowthachieved
by India in recent years have fuelled the
demand for infrastructure 1
Investment in infrastructure likely to increase to
10% by the 12 th Plan (2012-2017)from the
current 8.37%.3
Operational SEZ in India
Total No. of operational Multi
Product SEZ in India
Total No. of operational sector
specific SEZ in India
17
126
Total Operation SEZ in India 143
►
US$ 1 trillion opportunities for global investors
over the next 5 years.8
► Infrastructure sector amounts for 26.7% of
India’s Industrial output9
► Private sector investment in infrastructure
expected to reach 50% by 12 th plan from the
current 34%.10
►
India's WTO involvement during the last decade
has encouraged the country’s pharmaceutical
firms to adopt a strategy of R&D based growth.
6
Gems and
Jewellery
IT/Hardware
and
Bio-informatics
IT/ITES
Operational SEZ in India: key sectors
Electronics
Apparel and
fashion
accessories &
Footwear
Hi-tech
Engineering
Products
Handicrafts
Telecom
equipments/R&D
services
Food Processing
►
►
Apart from the manufacturing of drugs, the
pharmaceutical industry offers a huge market
for outsourcing of clinical research. 7
143 Operational, 582 Formally Approved , 44 In-
Principal and 380 Notified SEZ at present.11
Building
Products,
FTEZ
Software
development
Building
Products
Bio-technology
& Pharma
conventional
Energy, Power
Aviation
Source:, PPP India, , http://www.pppinindia.com/database.php ,
http://www.sezindia.nic.in/writereaddata/pdf/ListofoperationalSEZs.p
df
Karnataka: Industrial Infrastructure Profile
Page 2

Karnataka: contributing to India’s growth
story
Thrust on infrastructure and sector friendly policies have given Karnatakaone of the most
robust industrial infrastructure to support holistic growth of the state
► Strong industry focus with 26 MSME product
clusters, 132 Industrialestates and 8 growth
centers. 394,850 MSME units, employing
75,120 people, in 2009-10, growing at an
annual rate of 9.49% since 2008-09
Selected economic indicators of industries
► Sector-specific SEZ and Industrial zones
matching the natural resources and capability of
a region with the industry requirements.
► Mining sector registered the highest growth of
37.95% followed by electricity (15.78%) and
manufacturing (8.47%). All the three sectors of
organized industry have registered a higher
growth in 2009-10 compared to 2007-08 and
2008-09.
► The overall organized industrial sector of
Karnataka registered an impressive double-digit
growth of 11.34% in 2009-10 compared to
7.35% in 2007-08 and 4.72% in 2008-09. To
facilitate balanced regional growth, state
government has shifted focus to new and
planned industrial infrastructure such as SEZ
and investment regions.
► Development of Suvarna Karnataka
Development Corridor in which 25 Km on both
sides to be dedicated for development of
industrial clusters and sector specific industrial
High-Growth Sector:
(=/>10% growth)
(i) Tobacco products;
(ii) Wearing apparel;
(iii) Publishing &
printing;
(iv) Food products
Values are per worker (in lakh Rs)
Classification of Industries into Groups based
on Growth (2009-10)
Medium-Growth
Sector: (=/>5% but

SEZ and SIR in Karnataka, driving
Karnataka export
60Special Economic Zones provide duty free enclave for driving FDI and exports.
► 20 SEZ are fully operational, 15 have been notified, 4 submitted to GoI
for notification, and 17 formally approved
• US$ 3.2 Billion invested in 20 operational SEZ creating employment
for. 125,411 people.
Growth in SEZ exports (in USD Billion)
Belgaum
2.5
2
1.6
2.1
1.5
1
0.5
0.3
0
2007-08 2008-09 2009-10
Udipi
Hassan
Bangalore
Source: Karnatakaindustry.gov.in
Special Investment Region (SIR)
► The Bangalore-BIAL ITIR is a 50 km 2 (12,000
acres) Investment Region that is under
development 15 km North of Bengaluru
International Airport.
►
Total cost is expected to be One Lakh Crore
rupees ($20 Billion).
► The initiative will provide direct employment to 1.2
million people and indirect employment to 2.8
million.
► Development will involve a Centre-State
partnership in conjunction with private partners.
Basic infrastructure such as road, rail and
telecommunication links will be provided by the
Centre.
Mangalore
Mysore
IT/ITeS 47
Biotech 3
Textiles 1
Engineering & related
industries
2
Food processing 1
Precision engineering (auto,
aerospace & industrial)
1
Pharmaceutical 1
Petrochemicals & petroleum
products
1
Airport based SEZ/ Aerospace 2
FTWZ 1
► The State governments will provide physical
infrastructure and utilities, including
power, water, sewerage and effluent treatment
facilities
Karnataka: Industrial Infrastructure Profile
Page 4

Suvarna Karnataka Development Corridor
Programme: accelerating industrial growth
► New Industrial Policy, 2009-14 directed development
of 5 major corridors in Karnataka, proposing to cover
11 district headquarters and 20 major towns along
highways, major roads, and rail links
► Industrial corridors provide infrastructure support in
energy, rail, road linkages, free trade zones, inland
container depots, and urban infrastructure.
► Suvarna Karnataka Development Corridor
programmeconnects most of the Tier II cities through a
network of highways, cluster development in
designated zones.
► Under the SKDC programme, the potential areas in
the vicinity of the corridor (25 km on both sides of the
corridor) will be developed for industrial
clusters, townships, satellite towns and sector specific
industrial 5 major industrial zones. corridors: 1)Tumkur - Honnavar via Shimoga 2) Chitradurga – Mangalore via
Shimoga – Udipi 3) Bidar – Gulbarga – Bellary – Hiriyur 4)Chitradurga – Hospet – Koppal– Raichur 5)
Chitradurga – Hospet – Bagalkot - Bijapur
Investment Zones For 10 Industries along SKDC
Industry
Districts
Industry
Districts
Steel
Cement
Food
Processing
Bellary, Koppal, Bagalkot, Haveri,
Gadag & Raichur
Gulbarga, Bagalkot, Chitradurga,
Belgaum and others
Bengaluru Rural, Kolar, Belgaum,
Gadag, Koppal, Shimoga, Bagalkot,
Bijapur, Davangere, Mandya and
Dharwad
Readymade
Garments
Sugar and Co. gen
power
Pharmaceutical /
Bio Technology
Bengaluru Rural, Tumkur, Kolar,
Mandya, Belgaum, Bidar, Dharwad
and Others
Bidar, Belgaum, Bagalkot,
Shimoga and Mandya
Bengaluru, Mysore and Hassan
IT / BT
Mysore, Mangalore, Hubli, Dharwad,
Belgaum, Shimoga, Gulbarga, Kolar
and Mandya
Power Generation
Raichur, Bellary, Bijapur &
Chitradurga
Automobile
Ramanagara, Shimoga, Dharwad and
Kolar
Media &
Entertainment
Bengaluru Rural and Ramanagara
Karnataka: Industrial Infrastructure Profile
Page 5

Industrial Parks and PPP Projects under
implementation
Sector specific industrial parks to provide conducive environment for industry
Name of the project
Investment (in US$
million)
Employment potential
Information Technology Investment region (ITIR) US$ 20 Billion 4,000,000
IT Parks at Mysore, Mangalore, Gulbarga, Shimoga US$ 30 million 10000
Bangalore Biotech Park US$ 50 million 3000
Agri – Biotech park at Dharwad US$ 20 Million 1000
Marine Biotech Park in Mangalore US$ 20 Million 1000
Vivarium Animal House in Bidar US$ 20 Million 1000
Nutri-Neutraceutical Park at Mysore US$ 20 Million 1000
Phyto- Pharmaceutical Park, Mysore US$ 20 Million 1000
► Electronics City, Bangalore is one of India’s largest electronic industrial parks spread over 332
acres, housing more than 300 companies and employing more than 100,000 employees.
►
Bangalore Helix – One of the biggest biotech clusters in India comprising 8 biotech incubators
covering a total area of 10,000 sq ft with a total investment of US$ 20 million
Details of 3 PPP projects in Industrial Infrastructure
Sub
Sector
Project Name Location Sponsor
department
Estimated
Cost (in US$
million
Stage
BT Setting up of BT SEZ Bangalore Department
of IT,BT and
S&T
109 Bidding
IT Devanahalli Business park Bangalore KSIIDC 1875 Project
Identification
Nano
Sector
Setting up of Nano Park Bangalore Department
of Science &
Technoldy
Bidding
Karnataka: Industrial Infrastructure Profile
Page 6

Policy initiatives
State Industrial Policy, 2009-
14
•Development of Suvarna Karnataka Development
Corridor with industrial clusters, townships, sector
specific SEZ to an extent of 25 Km on both sides of
the corridor
•Dedicated infrastructure development fundwith an
initial corpus of US$ 104 million to be operated
through KIADB
State policy for SEZ
•Single Point clearance to SEZ developers and units
•A committee to monitor and review implementation
of SEZ.
•Exemption from stamp duty, electricity duty &
Customs/excise duties for authorized operations
approved by BOA
•Exemption from state local taxes, sales
tax, VAT, Entry tax, Special Entry Tax for both
developers and SEZ units.
•100% Income Tax exemption on export income for
SEZ units for first 5 years, 50% for next 5 years
thereafter and 50% of the ploughed back export
profit for next 5 years.
•One time capital subsidy of up to 50% of the cost
incurred for setting up Common Effluent Treatment
Plan
•External commercial borrowing by SEZ units upto
US$ 500 million in a year without any maturity
restriction through recognized channels
Karnataka Biotech Policy
•Creating special infrastructure such as focusedbiotech
parks in the areas of agriculture, marine biotech and
animal husbandry
Information and
Communication
TechnologyPolicy
•Focusing on creation of innovation park with
Government funding limited to 20% of the project cost
Karnataka: Industrial Infrastructure Profile
Page 7

Conceptualization of an
Investment Region
Organization Structure
SIR Apex Authority
• Karnataka State Industrial Infrastructure Corporation
(KSIIDC) (or any other such institution as proposed in
Infrastructure Bill) will be the Apex Authority for major
decisions.
• Major functions include to make regulations & such
provisions for proper
development, operation, regulation and management
of SIR
• Authority can delegate suchpowers and functionsto its
Executive Committee
• Core functions- like approval and modification in
development plan, town planning scheme and general
development regulations shall not be delegated to any
committees.
New SPV: Project Development
Agency
• Government may separately
authorize formation of such a
company
• The nodal company will do
• All project development work.
• Immune from regular Govt.
controls
• Detailing of the Projects
• Both for projects within and
outside the SIR area
Regional Development Authority (RDA)
• The State Government will constitute RDA for each SIR declared.
• The RDA will be a corporate body.
• The State Government is also empowered to designate any Government agency or a govt.
company to act as RDA,
• The RDA will have Chairman, Vice Chairman, CEO and members not exceeding eleven- to be
appointed by the Government of Karnataka
• It will comprise of the official and non-officials & experts as members
• RDA will do the ground level planning and execution.
SPVs for Projects within RDAs
SPVs for Projects within PRIDE Corridor and
Suvarna Karnataka Development Corridor
Investment Opportunities
► Investment in Industrial Infrastructure: Development of sector focused industrial parks
►
►
Investment in Special Economic Zones for various sectors like IT/ITES, Chemical &
Petrochemical, Aerospace, Pharmaceutical, Textile, Engineering, Biotech, Food Processing.
Investment in Special investment Regions along the Suvarna Karnataka Development Corridor
► Bidar-Gulbarga-Bellary-Hiriyur
► Tumkur - Honnavar via Shimoga
► Chitradurga – Hospet – Koppal – Raichur
► Chitradurga – Hospet – Bagalkot - Bijapur
►
Chitradurga – Mangalore via Shimoga - Udupi
Karnataka: Industrial Infrastructure Profile
Page 8

Project Propositions
Proposition
Investment
Potential
Line Department
Development of SIRs
Mangalore (PCPIR) 25,000.00
North Karnataka 25,000.00
Bangalore Region 25,000.00 PS Industries
Development of VADA region as NIMZ 15,000.00
Integrating ITIR and Devenahalli plan as a package
Development of Proposed Product Specific SEZs & Industrial Areas
Steel Ancillary Park, Bellary (500 ac) 145.00
Engineering Park, Chitradurga (200 ac) 46.00
Engineering Park, Tumkur (500 ac) 155.00
Integrated Industrial Township, Dharwad (1000 ac) 391.00
Defence Manufacturing Hub, Chitradurga (500 ac) 110.00
Multi Product SEZ, Bijapur (2500 ac) 666.00
Textile SEZ, Doddaballapur (300 ac) 190.00
IT SEZ, Dharwad (30 ac) 326.70
IT SEZ, Kolar (30 ac) 326.70
KIADB
IT SEZ, Mysore(30 ac) 326.70
Aerospace SEZ, Bangalore (R ), (250 ac) 2,722.50
Education/ Knowledge Hub, Bijapur (150 ac) 1,633.50
Commercial Cum Office Complex Bengaluru (U), (3 ac) 32.67
Industrial Park, Bidar, (300 ac) 767.26
Industrial Park, Gulbarga, (200 ac) 511.51
Textile SEZ, Hassan (581ac) 368.60
Food Processing SEZ, Hassan (285 ac) 3,103.65
Pharma SEZ, Hassan (270 ac) 2,940.30
Financial City Phase 2
PS Industries
Services and Utilities
CETPs in the existing and proposed Industrial Areas (a total of
90 areas do not have CETPs in KIADB estates)
Regional Industrial Waste treatment centers for both solid and
liquid waste
1,200.00
KIADB
3,440.00
300 MLD Desalination plant 1,500.00
Total Investment Envisaged 110,903.09
Investment Potential in Rs. Cr
Karnataka: Industrial Infrastructure Profile
Page 9

Contacts
Secretary to Government of Karnataka
Infrastructure Development department
Room No 28, Vikasa Soudha
Bangalore - 560 001
Ph: 91-80-22282366, 080 - 22035085
Fax: 91-80-22280605
E-mail ID: prs-infra@karnataka.gov.in
Chief Executive Officer,
Karnataka Industrial Area Development Board
14/3, 2 nd Floore, RP Buildings, Nrupathunga Road
Bangalore – 560001
Ph: 080-22215383
Fax: 080-22217702
E-mail ID: http://www.kiadb.in/
Chairman
Karnataka State Industrial & Infrastructure Development Corporation
Khanija Bhavan 49, 4th Floor, East Wing,
Race Course Road, Bangalore - 560 001.
Ph: +91 080 2225 8131/133 Fax: +91 80 2225 5740
Web: www.ksiidc.com;
E-mail: ksiidc@airtelmail.in; ksiidcit@gmail.com
Commissioner for Industrial Development and
Director of Industries & Commerce
2nd Floor, Khanija Bhavan, No.49, Race Course Road,
Bangalore – 560 001
www.karnataka.industry.gov.in
Email : commissioner@karnatakaindustry.gov.in
Visit us at : http://www.karnatakaindustry.gov.in
Principal Secretary to Government of Karnataka
Commerce & Industries Department
# 106, 1st Floor, Vikasa Soudha, Dr. Ambedkar Veedhi,
Bangalore 560 001, India.
Email : prs_ci@karnataka.gov.in
Karnataka Udyog Mitra
Managing Director, Karnataka Udyog Mitra,
3rd Floor, Khanija Bhavan (EastWing), No.49,
Race Course Road,Bangalore – 560 001
www.kumbangalore.com
Ph : 91-80-2228 2392, 2228 5659;
2238 1232, 2228 6632
Fax : 91-80-2226 6063
Email : md@kumbangalore.com
Visit us at : www.kumbangalore.com
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