Bangalore: Karnataka defied a wave of negative publicity triggered by a mix of worsening infrastructure and political turmoil with 29.8 per cent growth in information technology (IT) exports in the first nine months of the current fiscal till December 2005 as more IT firms moved into Bangalore and existing ones expanded their operations in the city to cash in on the boom in outsourcing from western countries.

On the basis of figures compiled by the Software Technology Parks of India (STPI), IT exports from the State touched Rs. 25,200 crores between April and December 2005, recording a growth of about 30 per cent from Rs. 19,400 crores a year earlier.

Given the growth rate, IT exports from the State are expected to cross the targeted figure of Rs. 37,000 crores in March. If this happens, the annual export growth rate will be over 32 per cent, M.K. Shankarlinge Gowda, Secretary, IT and Biotechnology, told presspersons here on Friday.

Software exports from the country crossed Rs. 78,000 crores during 2004-05, of which the State's share was Rs. 27,600 crores. This fiscal, the software exports from the country is projected to reach Rs. 1,00,000 crores, and the State's share is expected to be 37 per cent (Rs. 37,000 crores). U.S. accounted for 60 per cent of the software exports from Karnataka and Europe 24 per cent.

New units

During April-December 2005, 135 new units were approved in Karnataka, of which 60 per cent was in the form of foreign equity as against 125 units a year ago with a slightly higher foreign equity component of 64 per cent.

However, in real terms, the foreign equity component touched Rs. 1,407 crores of total investments of Rs. 1,800 crores made by IT firms during April-December 2005. In the same period last year, the foreign equity component was Rs. 1,089 crores of an investment of Rs. 1,607 crores.

IT firms are expected to make investments worth Rs. 2,600 crores by March 31 from Rs. 2,290 crores a year ago.

About 35,000 IT professionals were recruited during the year taking the workforce employed in the State's IT sector to 3.2 lakhs. Another 10,000 people are expected to be employed by the end of March 31, Mr. Shankarlinge Gowda said.

Global IT majors, such as Apple, Broadcom, Intuit, ABB Ltd, Sandisk, JP Morgan Services, Target, Allegis Services, Storage Tek, WS Atkins, Tyfone, Catepillar, CAE, BA Systems, PMC-Sierra, Bearing Point and Deutsche Bank, started operations in Karnataka during the period.

Expansion

Besides, 400 existing companies, including IBM, Intel Corp and Cisco, have announced plans to expand business in Bangalore. Apple is setting up a technical support centre, and a U.S. bank and a retail chain are also in talks to start operations in Bangalore. Every week, four new companies are registered in city.

"The figures compiled by STPI shows that Karnataka is the preferred destination for IT and ITeS (information technology enabled) companies in the light of what has been said and written about the city and the State," Mr. Shankarlinge Gowda said.

Real estate

According to a study by a global real-estate consultant, Bangalore ranked third after Tokyo and London in terms of sale of `A' grade commercial space during the period. About 9.5 million sq.ft of commercial space were sold in Bangalore in 2005, mainly owing to the growth of the IT sector, he said.

Karnataka has set a software export target of $ 10 billion by 2010. But, going by the current rate, this will be accomplished during 2007. By 2010, the State is expected to export software worth $ 20 billion, Mr. Shankaralinge Gowda said, referring to a recent study conducted by NASSCOM (National Association of Software and Service Companies) and McKinsey. "Karnataka, including Bangalore, is growing on their own strengths. We are not competing with anybody," he said.

Tier-II cities

According to him, IT firms are increasing looking at starting operations in Tier-II cities, such as Mangalore and Mysore. As per STPI figures, software exports from Mysore increased to Rs. 286 crores during April-December, 2005, from Rs. 223 crores a year ago, and those from Mangalore and Manipal touched Rs. 430 crores from Rs. 390 crores a year earlier.

The proposed Special Economic Zones coming up in Mangalore and Mysore will a key driver for IT firms in the State.

Hardware park

Mr. Shankaralinge Gowda said 2,000 acres of land will be acquired to set up a hardware park and drive growth in the northern parts of Bangalore.

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