Situated at an altitude of 920 meter's above sea level, Bangalore is the principal administrative, cultural, commercial and industrial center of the state of Karnataka.

The city, which is spread over an area of 2190 square kilometers, enjoys a pleasant and equable climate throughout the year. Its tree-lined streets and abundant greenery have led to it being called the 'Garden City' of India.

However, since local entrepreneurs and the technology giant Texas Instruments discovered its potential as a high-tech city in the early 1980s, Bangalore has seen a major technology boom. It is now home to more than 250 high-tech companies. Including homegrown giants like Wipro and Infosys. Consequently, Bangalore is now called the 'Silicon Valley' of India.


IT Infrastructure

Telecommunication Infrastructure in Karnataka
An extensive transmission infrastructure of optic fiber cable and digital microwave routes has been planned through out Karnataka with the involvement of three major organizations.

	Department of Telecommunications (DOT) The Department of Telecommunications through Karnataka Telecom Circle connects 1200 locations in Karnataka including towns and cities with stable media.
	Videsh Sanchar Nigam Limited (VSNL) VSNL has put India on the information highway of the world by offering more than 370 Mbps international Internet connectivity..
	Software Technology Parks of India (STPI) STPI is a society under the Ministry of Information Technology, Government of India. It was set up in 1991 to promote the software exports industry in India. STPI has the license to provide international high speed data communication services to the IT community and is a category 'A' Internet Service Provider (ISP) in the country.

Benefits to Investors
The Karnataka Government offers special assistance, incentives and concessions for the Information Technology industries which have investments in fixed assets up to Rs. 100 Crores. The explosive growth of IT in Karnataka has been helped in no small measure by the progressive policies of the Government. Some of the benefits that the Government offers investors in the Information Technology sector in Karnataka are listed below.

Sales Tax Exemption
Information Technology Industries, irrespective of level of investment and location of the unit, will be offered Sales Tax exemption for a period of 10 years or deferment for a period of 12 years, subject to a ceiling of 200% of the value of fixed assets. Such exemption / deferment will also cover turnover tax payable by the unit.

Entry Tax Exemption
Information Technology Industries will be exempt from payment of Entry Tax and Purchase Tax on computer hardware, computer peripherals and other capital goods including captive power generation sets, during implementation stage which can be extended up to 5 years from the date of commencement of implementations.

Power Tariff Concessions

	Software industries will be treated as industrial (and not commercial) consumers and electricity tariff applicable to the industrial consumers will be levied on such industries.
	Software industries, which need electrical power up to 5 KVA, will be permitted to be established without any local restrictions and will be made eligible for all incentives and concessions.
	As continuous uninterrupted and quality power supply is one of the prime requirements of sustenance and growth of Information Technology Industries, these industries will be given priority in the sanctioning and servicing of power. The IT industries will also be exempt from power-cuts without any time limit.
	Captive power generation sets installed by the Information Technology Industry will be eligible for the following incentives:

Total exemption from payment of electricity tax without any time limit.
Total exemption from payment of Sales Tax on fuel used for captive power generation without any time limit.

Quick Clearances from Pollution Control Board
Karnataka State Pollution Control Board has simplified the procedure for seeking clearances under the Air Act and the Water Act for the software companies that use captive DG Sets.

Concessions on Company Registration Charges
IT companies taking up expansion, diversification, and modernization get concessions on registration charges.


IT Industry in Bangalore

The evolution of the IT industry in Bangalore

	1984 - Texas Instruments enters India for offshore development.
	1986 - DoE announces software policy.
	1991 - Software Technology Parks of India (STPI) is set up
	1992 - Exclusive satellite international gateway for export industry is set up.
	1997 - Govt. of Karnataka announces IT Policy and Karnataka becomes the first state in India to do so.
	1998 - Number of IT companies grows to 253, with total projects worth US $840 Million.
	1999 - Indian Institute of Information Technology, Bangalore (IIITB) and the KITVEN FUND are established.
	2000 - Number of IT companies grows to 782, with total projects worth US $1.1 Billion.
	2001 - Number of IT companies grows to 928, with total projects worth US $1.6 Billion.

IT Companies in Bangalore

There are more than 100 multinational companies in Bangalore.
In the year 2001 Bangalore has seen a cumulative investment of around US$1.3 billion in the software industry. About 165 new software industries have been established and the total number of software professionals is about 80,000.