Karnataka gets large firms to help start-ups

The Karnataka government has IBM, Amazon Web Services and Airtel to subsidise services to start-ups registered with it.

Start-ups registered with the state government have access to accelerators and funding, cloud credits, discounted Internet subscription, software debugging tools, and payment gateways. The state government is trying to help start-ups reduce their running costs.

The changes to the Karnataka start-up policy were announced soon after Information Technology Minister Priyank Kharge took charge. “We have come up with a start-up cell to ensure vibrancy in the eco-system. Earlier, start-ups had to register through NASSCOM or other bodies,” Kharge said.

The Karnataka government will also reimburse 30 per cent of marketing costs, including travel for international marketing, up to a total of ~5 lakh a year. Value-added tax, central sales tax and service tax will be refunded for companies with turnover less than ~50 lakh per annum for three years by the government.

Karnataka has changed its startup policy as neighbouring Telangana aggressively pitches for infotech investments. “In Telangana, the push is coming from the top. The minister has a clear mandate that he can give them (infotech companies) free power, water, bandwith, and land. That will not work in the long term,” added Kharge.

He pointed out Karnataka, especially Bengaluru, was far ahead of Telangana in investments from venture capitalists. Karnataka saw nearly $1 billion in venture capital coming in last year, while Telangana saw investments of close to $87 million.

Bengaluru is ranked among the top 15 cities for start-ups in the world and wants to make it into the top ten by 2020.