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The Finance Minister Arun Jaitley had announced that the government has sanctioned an Indian Institute of Technology (IIT) for Karnataka. Consequently, a team of experts, comprising of IIT Directors and representatives of the centre was appointed for inspecting the three towns which were selected as options for setting up the institute. They were to choose the best suitable town out of these three.

Initially, Dharwad, a town in north of Karnataka had been selected on the basis of its infrastructure facilities and other provisions, such as an already set up institution which can accommodate up to 750 students, function as a temporary campus and make it possible to begin classes next year onward. Although there was contention that the centre might be changed to Raichur, the final decision remains fixed on Dharwad.

The city has also been included in the list of approximately 100 hotspots which have been chosen for the national Smart Cities project. Under this initiative, the selected towns will get improved public service facilities, upgraded roads and free WiFi.

When the Chief Minister Siddaramaiah had suggested to the Union government that the new institute should be set up in Raichiur, there was outcry in Dharwad. Raichur comes under one of the least developed districts in north Karnataka, it has also been given Special Status, which helps the town receive special financial aid from the central government.

At present, there are 16 IITs across the country, which are proving to be insufficient when compared to the number of engineering aspirants. The existing institutes are unable to incorporate a majority of the students who wish to pursue engineering at graduate level.