"We will build two greenfield electronic clusters at Devanahalli (near the Bangalore airport) and Narsapur (in Kolar district, about 100 km from here) and develop the three electronic systems design and manufacturing (ESDM) sectors at the electronics city and Peenya in Bangalore and Mysore into clusters," state IT Secretary ISN Prasad said.

To be built under the public-private partnership (PPP) mode, the clusters will facilitate setting up of new ESDM units and expand the existing units in the brownfield.

"The proposal for the Devanahalli cluster has been sent to the Union Ministry concerned for clearance and funds, as the project cost of Rs 100 crore has to be equally shared by the state and the central governments," Prasad said.

The proposed clusters will have common testing and certification facilities for ESDM units and MSME (micro, small and medium enterprise) units."We have set up a core committee on ICT Electronics Hardware to scale up the ESDM sector that is projected to grow across the country nearly 10 times to USD 400 billion by 2020 from USD 45 billion in 2012 and reduce dependency on imports, which account for 85 percent of the consumption," Prasad asserted.

For instance, of the 12 million computers sold in the previous fiscal (2012-13), 85 percent were imported, while domestic firms had to import 95 percent of components to manufacture a range of electronics products for the consumer and industrial segments.

In the absence of a strong production base, electronics products valued at USD 30 billion were imported last fiscal."Unless the domestic ESDM sector rapidly increases production with double-digit growth, import of electronics goods will increase to USD 42 billon by 2015 from USD 30 billion in 2012," Prasad said.

The state government is planning to set up Rs 500-crore seed fund for the ESDM sector, offer incentives and innovation support for IP (intellectual property) creation under a new policy formulated on the recommendations of the Karnataka ICT group, headed jointly by Manipal Global Education chairman and former Infosys director TV Mohandas Pai and former STPI (Software Technology Parks of India) director BV Naidu.

"The group has recommended preferential market access to the ESDM sector on procurement of electronics products by the state government, which in turn will benefit the small and medium enterprises (SMEs)," Prasad said.

Admitting that domestic production of electronics products would help reduce the trade imbalance, the secretary said that the State Government was committed to accelerating the growth of the ESDM sector to replicate the success in the software services sector.


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