Karnataka Unveils ₹1,000 Crore LEAP Fund to Create 5 Lakh Jobs, Boost Innovation Beyond Bengaluru
Bengaluru, September 27, 2025 – The Karnataka government has launched the Local Economy Accelerator Programme (LEAP), a ₹1,000 crore initiative aimed at generating 500,000 jobs and fostering innovation across the state’s tier-2 and tier-3 cities. Announced by the Department of Electronics, Information Technology, and Biotechnology (IT/BT), LEAP seeks to decentralize Karnataka’s economic growth, reducing reliance on Bengaluru—India’s Silicon Valley—and empowering local economies through startups, skill development, and infrastructure in emerging clusters.
A Vision for Equitable Growth
Karnataka, home to Bengaluru’s globally recognized tech ecosystem (ranked 10th in StartupBlink 2025 and 14th in Startup Genome 2025), contributes significantly to India’s IT exports. However, regional disparities have long concentrated opportunities in the capital. “LEAP is our blueprint to make every corner of Karnataka a hub of innovation,” said IT/BT Minister Priyank Kharge at the launch event on September 22 at Vidhana Soudha. “By investing ₹1,000 crore, we aim to create 5 lakh jobs, nurture 1,000 startups, and build self-sustaining ecosystems in cities like Mysuru, Hubballi, and Kalaburagi.”
The programme, approved by the state cabinet in July 2025, builds on Karnataka’s Budget 2025, which allocated ₹300 crore for a Fund-of-Funds and ₹100 crore for deep-tech innovation. LEAP integrates 16 sub-programmes, addressing gaps in funding, mentorship, and market access while promoting inclusivity for women entrepreneurs and rural innovators.
Key Features of the LEAP Initiative
LEAP adopts a cluster-based approach, grouping districts to leverage local strengths. Key clusters include Mysuru-Chamarajanagar (agri-tech, tourism), Mangaluru-Udupi (fintech, maritime tech), Hubballi-Belagavi-Dharwad (manufacturing), Tumakuru (logistics), Kalaburagi (sustainable energy), and Shivamogga (biotech). The initiative’s major components include:
- Karnataka Startup Foundry: Integrates entrepreneurship into school and college curricula, targeting 10,000 young innovators annually across 500+ institutions.
- ELEVATE NXT Grants: Allocates ₹100 crore for deep-tech startups in AI, biotech, and cleantech, with private sector matching funds to support 200+ ventures.
- Centres of Excellence (CoEs): Establishes 10 new CoEs in clusters to drive industry-academia R&D, aiming to create 50,000 research-linked jobs.
- Fund-of-Funds: A ₹300 crore pool to attract ₹1,000 crore in private investments, strengthening the venture capital ecosystem in non-metro areas.
- Incubators & Accelerators: Sets up 20 plug-and-play hubs with mentorship and co-working spaces, housing 1,000 startups and generating 2 lakh jobs.
- Critical Research Fund: Provides ₹150 crore to prototype and commercialize innovative products, targeting 100+ product launches.
- Global Technology Centres: Facilitates international partnerships to boost IT exports by 20%, leveraging clusters’ unique strengths.
A unified digital portal, launched concurrently, streamlines access to resources, grants, and stakeholder networks, ensuring entrepreneurs in remote areas can participate seamlessly.
Economic Impact and Industry Support
LEAP is projected to create a ₹20,000 crore economic ripple effect by 2030, easing Bengaluru’s burden (currently 70% of state IT exports) and curbing urban migration. The programme has already attracted ₹200 crore in private investments, particularly for deep-tech ventures in AI, cybersecurity, and quantum technologies. Industry bodies like NASSCOM and the Indian Venture Capital Association have praised LEAP as a transformative step. “This is a bold move to make Karnataka a constellation of innovation hubs,” said Shalini Rao, a Mangaluru-based startup founder. “The focus on clusters ensures local talent stays local.”
The programme aligns with Karnataka’s IT Policy 2025, emphasizing cloud computing, emerging technologies, and non-metro expansion. Early applications for Innovation Labs have surged, with the first grants set for November 2025 disbursement.
Challenges and Future Outlook
While LEAP’s ambition is commendable, experts highlight challenges like bridging digital divides, ensuring private sector commitment, and sustaining momentum amid economic volatility. The government has pledged transparent monitoring through an online dashboard tracking job creation, startup success, and patent filings.
As Karnataka embarks on this transformative journey, LEAP positions the state as a pioneer in equitable innovation. With applications open and clusters gearing up, the initiative promises to redefine Karnataka’s economic landscape, fostering a future where innovation thrives beyond Bengaluru’s borders.
Source: Karnataka IT/BT Department, official statements, and industry reports.
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