Karnataka Government today approved new IT and Electronic Hardware policies to further boost the growth of these sectors, which account for 20 per cent of the state's Gross Domestic Product.

The new IT Policy 2011 envisages promotion of the information technology industries and innovative parks in Tier II and III cities, Minister for Higher Education V S Acharya told reporters after a cabinet meeting that approved the development.

Karnataka, considered as the IT hub of the country, has achieved Rs 75,000 crore worth exports in software this year, Acharya said.

The government also approved the Karnataka Electronics Hardware Policy and earmarked Rs 25 crore as budgetary allocation for its implementation.

Acharya said the state plans to develop four Electronic Hardware parks in the clusters of Bangalore-Tumkur, Shimoga- Hassan, Hubli-Dharwad and Mysore-Nanjangud.

About 500 to 1,000 acres of land has been identified for the establishment of each of the parks, the minister said.

In a major policy decision, the cabinet decided to withdraw tax exemption granted to tertiary sector activities in the Export Oriented SEZ located in the city.

The tax concession will now be available only to units that are engaged in production of export oriented products, Acharya said.