A whole range of concessions are being planned for IT companies, where the initial investment in a new company, or in expansion, modernisation is less than Rs 100 crore. If the investment is more, the government considers it a ''mega'' project and a special set of initiatives and concessions will be worked out, with reference to the needs of the company. Also, a project that employs more than 1,000 people will be considered a mega project and these concessions are applicable for both the new units as well as existing ones that create an additional employment by incremental investment.

All new IT companies that create employment for more than 250 people in Bangalore, and for 100 in other areas during the first year, are eligible for rebate either on the stamp duty or on the cost of the land. A rebate of 15 per cent on cost of land will be applicable to those companies that get land from the state agencies like Karnataka State Small Industries Development Corporation, Karnataka Industrial Areas Development Board, KEONICS etc.

Software companies will be treated as industrial (not commercial) and electricity tariff applicable to the industrial consumers will be levied on them. Continuous uninterrupted and quality power supply being one of the prime requirements for sustenance and growth of the IT industry, this sector would be given priority in sanction and servicing of power. Companies in the sector will exempt from power-cuts without any time limit. IT companies that use power up to 5 KVA will be permitted to be established without any locational restrictions. The companies can be established in residential, industrial or commercial areas.Labour laws have also been simplified. The Karnataka government proposes to exempt IT companies from furnishing returns and maintaining certain registers. A specific notification is to be issued by the labour department. This department has issued an administrative circular that streamlines several procedures pertaining to labour enactments and has also initiated procedures to exempt the IT companies from the preview of Industrial Employment (Standing Orders) Act 1946.

The government has announced special incentives and concessions for IT parks. These include exemption from payment of entry tax on equipment, sales tax/works contract tax, payment of stamp duty and registration charges on the first sales of land in the case of IT parks. A special IT corridor in and around Bangalore is on the anvil. This corridor will be undertaken with active assistance from and consultation with reputed international agencies that have complete experience in IT Parks. Another international gateway at Mangalore is in the immediate plans as well.

Infrastructure, in terms of access, includes the implementation of the international airport project, in a joint venture between the Karnataka government, the Airport Authorities of India and private sector bidders. In addition to the airport, a six-lane high way has also been planned.

In order to protect intellectual property rights, the state government intends to encourage patents and to take steps against piracy of patented products. It will constitute a high level committee that will review serious piracy cases and initiate appropriate action.