New Delhi: The Karnataka government has launched Engineering Research & Development (ER&D) Policy 2021 to promote the state as an ER&D destination of choice and transform it into a vibrant knowledge economy.Claimed to be a first in the country, the policy is valid for 5 years from the date of its notification or till a new policy is announced. It will aid the state to contribute 45% to India’s Engineering R&D. The state at present contributes ~40% of the Engineering R&D revenues in India.
The policy has identified five priority sectors: Aerospace & Defence; Auto, Auto Components & EV; Biotechnology (Bt), Pharma & Medical Devices; Semiconductors, Telecom, ESDM; and Software Products.
The three focus areas of the policy are: integrated value chain; focused sectoral approach; and emphasis on talent development. The state government is expected to spend about INR 1,000 crore over the next five years on ER&D, including incentives and funds to develop infrastructure and train manpower.
The policy is expected to create an additional 50,000 new jobs (direct & indirect) for skilled manpower during the policy period.
With this policy the Government of Karnataka strives to promote innovation that propels technology-led inclusive economic growth; foster new innovative engineering R&D ecosystems and infuse capital via industry-government collaborative channels; and promote IP Creation, registration and retention in Karnataka.
The state government is expected to spend about INR 1,000 crore over the next five years on ER&D, including incentives and funds to develop infrastructure and train manpower.~
The state government aims to attract Engineering R&D-intensive investment into Karnataka, and augment capacity by bridging the gap between engineering and research talent, and the industry’s technology needs.
It will also help in growing the regional economies by promoting innovation and Engineering R&D across Karnataka, developing a research-oriented skilled talent pool, and by fostering a knowledge economy.
Department of Electronics, IT, Bt and S&T, Karnataka Innovation and Technology Society (KITS), and NASSCOM collaborated to draft this policy after wider consultations with all the other participating stakeholders including the representatives of the industry.
“The aim of this policy is not only to attract a higher number of leading ER&D Multinational Companies (MNCs), Global Capability Centers (GCCs) and Engineering Service Providers (ESPs) to the State but also to provide them with a robust and well-connected ecosystem, including easy access to a skilled talent base”, B.S. Yediyurappa, Chief Minister of Karnataka, said.
Ashwath Narayan C N, Deputy Chief Minister, said, “With the policy’s unique set of offerings, one can easily observe that the intent is to get more and more IPs to register in India, make it simple for the industry to leverage high-end talent and take the research-oriented education system to greater levels. The key underlying thought has been to lay a foundation that encourages the youth to get into a research mode.”
Incentives
The incentives offered in the policy are applicable to ER&D MNCs, GCCs, ESPs and State Government Universities/ State Government University Affiliated Colleges and their students.
The incentives include: rental reimbursement for setting up/ expanding beyond Bengaluru urban district, recruitment assistance for setting up/ expanding beyond Bengaluru urban district, investment subsidy for setting up or expanding beyond Bengaluru urban district.
Rental reimbursement: The state government will provide reimbursement of 50% of rent, up to INR 2 crore or INR 1666 per employee per month, to an MNC Indian entity setting up or expanding GCCs in Engineering R&D beyond Bengaluru Urban District.
Recruitment assistance: GoK will provide recruitment assistance of INR 20 lakh to an MNC Indian entity setting up or expanding operations, beyond Bengaluru Urban District. Only one application per entity will be allowed during the policy period.
Investment subsidy: GoK will provide an investment subsidy equal to 20% of an investment, up to INR 2 crore, to an MNC Indian entity setting up or expanding GCCs in Engineering R&D beyond Bengaluru urban district.
The aim of this policy is to attract leading ER&D MNCs, Global Capability Centers and Engineering Service Providers to the State as well as provide them with a robust and well-connected ecosystem, including easy access to a skilled talent base~
The other key promotional programmes are listed below.
Engineering R&D Fund
The Engineering R&D Fund will provide a partial and conditional grant for ‘Approved R&D Projects’ undertaken by Engineering R&D GCCs and ESPs. GoK will provide a conditional grant up to 40% of the approved R&D expenditures, up to INR 8 crore per entity.
The ‘Approved R&D Projects’ focus on development of innovative offerings that leverage cutting-edge technologies (e.g. IoT, AI/ML, AR/VR, Blockchain, Robotics, Digital twin, Predictive/advanced Analytics, Advanced Manufacturing, etc.). These projects can also include Beta Site stage projects (the interim stage between R&D and marketing).
R&D Infrastructure Programme
R&D Infrastructure Programme has been designed to provide a grant for the establishment of testing and prototyping infrastructure, as a consortium/ joint activity of a group of GCCs & ESPs, anchored by KDEM.
This infrastructure may be set up, either within the premises of GCCs & ESPs or as standalone units (3 units located in 3 different locations) beyond Bengaluru urban district. GoK will provide a grant of up to 40% of the approved budget or INR 50 crore, whichever is lower (for 3 units located in 3 different locations beyond Bengaluru Urban District).
Innovation Labs Programme
GoK will provide funding equivalent to 33% of the costs, up to INR 8 crore per entity for the establishment of innovation labs beyond Bengaluru Urban District. This is applicable to entities for establishing Innovation labs in the areas of priority sectors (listed down as in section 3.4.1.) and showcase emerging areas e.g. Digital Health, Digital Manufacturing, Smart Agriculture, Smart City, Smart Grid & Renewable Energy etc.
Digital Innovation for Services Challenges
Digital Innovation for Services Challenge Programme will allow Engineering R&D GCCs, ESPs and Startups to conduct trials or pilot programs with State Government Departments. GoK will provide a grant of up to 80% for a project cost up to INR 3 crore per entity.
The policy aims to develop Engineering R&D Future Skills Courses and promote the adaptation of these courses in state government engineering universities/ affiliated colleges.
The government will offer scholarships for students opting for a post-graduate and doctoral programme to enter the engineering research sector, which requires high quality researchers. The policy proposes to offer the chief minister’s scholarship scheme – funded by the government and industry – to encourage students who want to take up higher studies in engineering.
According to the release, to promote internships to bridge the gap between academic skills and the needs of the Engineering R&D industry, the government will reimburse 50 per cent of the internship stipend for interns per entity, for a period of 3 months, up to Rs 10,000 per month per intern.
The entity will offer internships to 33% women candidates and consider 30% of the total interns into full-time employment, it added.
