Sat Mar 08 16:58:23 UTC 2025: ## Karnataka Budget Boosts Startup Ecosystem Outside Bengaluru

**Bengaluru, March 8, 2025** – The Karnataka state government’s recent budget announcement allocating ₹300 crore for a Fund of Funds (FOF) and ₹100 crore for deep tech development has been met with widespread praise from industry leaders. These initiatives, part of the ₹1,000 crore “Local Economy Accelerator Programme” (LEAP), aim to foster innovation and entrepreneurship in cities beyond Bengaluru, specifically targeting clusters like Mysuru, Mangaluru, and Hubballi.

The LEAP program projects the creation of 500,000 jobs over five years. Madan Padaki, president of TiE Bangalore, lauded the initiative, highlighting the long-term vision crucial for building a thriving startup ecosystem. Mohandas Pai, Chairman of Aarin Capital, similarly praised the government’s substantial investment—a departure from previous pronouncements lacking concrete funding. While acknowledging the allocation’s relative small size compared to overall state investment, Pai emphasized its significance as a positive step demonstrating the government’s commitment. He suggested further investment could yield even greater results in creating high-quality jobs and fostering intellectual property.

Other experts echoed this positive sentiment. Lakshmi Jagannathan, CEO of the Innovation Centre at IIIT-B, highlighted the FOF’s importance in providing crucial funding for startups developing cutting-edge solutions. Taslimarif Saiyed, CEO of C-CAMP, described the plan as “realistic,” emphasizing the FOF’s catalytic role in attracting further investment in deep tech. The government’s plan to establish a Centre for Applied AI also received strong support, recognizing India’s vast potential for AI application. The overall consensus is that the budget’s allocation represents a significant step forward in diversifying Karnataka’s thriving tech sector beyond Bengaluru.

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