Friday, September 30, 2005

Hardware and apparel parks to take off (finally?)

Hardware and apparel parks
These are two projects that promise to drive another growth wave
The Times of India

There could be hiccups and start-up troubles. Despite all that, Karnataka has always been a proactive State when it comes to nurturing the growth of emerging and existing businesses. For instance, the State has been taking a lot of initiative to improve the conditions of its textile and garment industry that employs over a couple of lakh people - skilled, semiskilled and unskilled.

Another sector that has been reeling under a lot of pressure is hardware. Both these segments have huge potential to attract domestic and foreign direct investments. "However, the government has been under-estimating them and ignoring their potential so far, by promoting only IT", says an industry source. Now that the government has firmed up plans to set up exclusive clusters for hardware and apparel, that too in the closer vicinity of the proposed airport, the industry observers say, it would actually give a major facelift to these segments.

Apparel Park

The State Government is in the process of completing the acquisition of almost 500 acres of land to set up a state-of-the art apparel park at Doddaballapur, through Karnataka Industrial Areas Development Board (KIADB).

The total cost of the project is Rs 69 crores where the Central Government would contribute Rs 22 crores, the State Government would bear a cost of Rs 11.56 crores, while the remaining Rs 35.44 crores would come in from KIADB. Around Rs 20 crores has already been invested.

According to the State Industries Minister P G R Sindhia, around 60 textile and clothing companies have picked space in the first phase of the park, which is around 200 acres. Some of these companies include Bombay Rayon Fashions, to set up a Rs 160-crore integrated textiles and garment project, Raymond, to set up two large separate units for suits and trousers and another for denim wear. Other companies would include Bangalore-based Gokaldas and Himatsingka Seide, Binny and Mudra. The project would be expected to be on stream by end 2006.

The minister said: "The State has a special focus on improving the status of its existing garment industry and also on attracting more externally". During the fiscal 2004-05, the State exported apparels worth Rs 4,500 crores, compared to Rs 4,038 crores in the previous fiscal".

Hardware Park

After a series of deliberations, discussions and debates, the State Government has taken a decision to go ahead with its Hardware Park plan to support the growth of the industry. The Government has identified over 1,000 acres of land near the Bangalore International Airport project at Devanahalli. The Karnataka Industrial Areas Development Board would be responsible for developing the park and a government notification to this effect is expected within a month.

The State IT Secretary M K Shankaralinge Gowda said the government would make efforts to get a Special Economic Zone (SEZ) status for the proposed park, as such a status would facilitate various incentives and tax concessions.

Momentum picked up after the Bangalore International Airport Area Planning Authority (BIAAPA) gave its nod to allocate land for the park. This governmental initiative might mean a lot to technology firms in the State, both in software and hardware segments considering the fact that many of them have began looking at hardware options.

According to Manufacturers' Association of Information Technology (MAIT) Secretary Vinay Deshpande, the Hardware Park would help build Karnataka as a hardware State. "So far we have been focusing only on software, thereby ignoring the hardware sector completely. We never looked at hardware other than manufacturing computers. Areas like IT and telecom hardware, and products like modems, set-top boxes or simputers can be ideal for India".


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