Karnataka budget creates Rs 300 crore Fund-of-Funds, Rs 100 crore deep-tech support in push for jobs

Karnataka CM Siddaramaiah presenting the state Budget 2025.

The Karnataka government has announced a Rs 300 crore Fund-of-Funds and Rs 100 crore deep-tech corpus as part of its 2025 budget, aiming to strengthen innovation ecosystem and boost entrepreneurship in the state beyond the capital city of Bengaluru.

These investments are part of the broader Local Economy Accelerator Program (LEAP), launched with a total grant of Rs 1,000 crore, to encourage startups and create jobs across tier II and III cities.

Chief Minister Siddaramaiah, who holds the Finance portfolio, said the LEAP initiative will receive an allocation of Rs 200 crore in the present financial year. LEAP is expected to create five lakh employment opportunities across the state and includes measures such as developing startup ecosystems in Mysuru, Mangaluru, Hubballi-Dharwad, and Kalburgi.

As part of this initiative, the Karnataka government has earmarked Rs 300 crore for a Fund-of-Funds to support startups and Rs 100 crore as a corpus fund to accelerate deep-tech development. The program will follow a lifecycle approach to establish incubators, accelerators, centres of excellence, and Global Technology Centres (GTCs).

The state government has also committed Rs 13,500 crore as subsidies and financial assistance to facilitate investment across information technology, tourism, and biotechnology. These initiatives are expected to drive economic growth and attract investment worth Rs 1 lakh crore, Siddaramaiah said while presenting his 16th Budget for Karnataka.

The state government also announced setting up of Centre for Applied AI for Tech Solutions (CATS) at an investment of Rs 50 crore, over five years, to reinforce Karnataka’s position as a leader in artificial intelligence (AI).

To accelerate research in quantum technology, Phase-2 of the Quantum Research Park will be set up in collaboration with the Indian Institute of Science, Bengaluru, with a grant of Rs 48 crore over next three years.

Also Read: Karnataka Budget 2025: New IT policy to focus on cloud computing, emerging tech

Karnataka will look to implement a new IT policy in 2025 focusing on cloud computing and emerging technologies, while expanding the state's technology footprint to tier II and III cities. It will aim to reinforce Karnataka’s status as a global technology hub by attracting capital investment and generating new job opportunities.