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Gujarat IT/ITes Policy 2022-27

1536 GujaratITITesViren

The policy introduces a unique concept of the CAPEX-OPEX model which is first-of-its-kind across the nation.

 

The global economic structure has been altered by the technological revolution fuelled by Information Technology (IT) and Information Technology Enabled Services (ITeS). These new technologies are transforming industries throughout the world and have had a tremendous influence on corporations, government allowing even tiny enterprises to compete with conventional giants.

India is emerging as the hub for ‘Digital Skills’. The Indian IT/ITes sector is steering India’s leadership position in the global landscape in terms of employment and economic value creation. While the global market is saturated India is growing steadily. Global IT market share is an 8.6% annual growth rate whereas India's IT market growth is at 10.71%. In the pre-Covid-19 years from 2010-18, the Indian IT market grew at a rate of 10.71 percent. In 2020, the IT industry contributed 8% of India's GDP and by 2025 it is estimated to contribute 10% of the country's GDP.

The policy-driven business environment in the state is primarily responsible for enhancing the state's industrial production and company viability. Gujarat is dedicated to encouraging the IT/ITes sector's rapid and more inclusive growth. This policy aims to attract investments and create jobs throughout the state while also promoting growth incentives and facilitation.

Gujarat's New IT policy was published on the 8th of February 2022, and it is published for 5 years, till 31st March 2027. It is observed that it can be very useful and good for Gujarat to develop in the IT field by far. For any other field of development now, IT is a booming industry and one of the leading industries by far.

The IT/ITes Policy (2022-27) will enhance an innovative environment, build a strong infrastructure, and grow the state's IT skill base. The policy will enhance different elements of the industry and give benefits to Co-working spaces to promote Gujarat as a destination.

 

 For Gujarat, majorly: 

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The policymaking process can briefly be described as:

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Major targets and expected results from this policy are:

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The government is also working on the online portal for the policy where registration forms and all other details regarding the policy will be provided. This will lead to an increment in transparency, the contactless application process, enabled data verification, end-to-end digital interface, timesaving, and ease in incentive outlay. These factors can be considered as guiding principles behind the drafting of the new policy.

The policy introduces a unique concept of the CAPEX-OPEX model which is first-of-its-kind across the nation.

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CAPEX: IT/ ITes Units - GFCI < INR 250 Cr then the policy envisions CAPEX support of 25% up to INR 50 Cr for normal projects and for GFCI > INR 250 Cr then INR 200 Cr for Mega Projects.

Development of IT township of 10-50 acres and IT city >50 acres will get CPAEX support of 25% up to INR 100 Cr, assistance in identification of land and process approvals, and relaxation in FSI norms and utilities support. Incentivizing the development of IT Cities / Townships with CAPEX support up to INR 100 Cr. and relaxations in regulatory & FCI norms.

 

For acknowledging the potential of IT as a key driver of increasing knowledge based on the global scenario of all the IT companies. CAPEX support for Data Centre of 25% up to INR 150 Cr. and Power tariff subsidy of INR 1/unit for a period of 5 years.

CAPEX support for Cable Landing Station (CLS) of 25% up to INR 20 Cr. For civil works of the building and to set up in-house R&D centers/ institutes/ laboratories acknowledge by CSIR/ DSIRCAPEX support of 60% up to INR 5 Cr.

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OPEX: Under the OPEX model, for GFCI< INR 250 Cr the government will provide support of 15% up to INR 20 Cr.

For normal projects, and for GFCI > INR 250 Cr OPEX support of 15% up to INR 40 Cr. for Mega Projects per year for 5 years.

Power tariff subsidy of INR 1/unit for a period of 5 years as an OPEX support for advanced data centers and cable landing stations.

 

After the launch of an online portal, registered first 3 companies with GFCI > INR 100 Cr will be automatically considered Megaprojects. Which can be termed as the “Early Mover Advantage”.

  

Under the new policy, the state government is aiming to establish an AI school and AI centre of excellence in the state as a Megaproject, with the objective to become the foremost source of industry-ready skilled talent for the IT industry. To facilitate a state-of-the-art infrastructure, the Employment model includes IT office spaces providers to create plug & play IT infrastructure and the Government facilitated model includes – utilization of existing infrastructure at GIFT city, plug & play office acquisition for short term lease, and rent to market in the short run, and to develop a great co-working facility in the long run.

 

For upskilling talent financial support up to INR 50,000 per person for successful certification through Direct Benefit Transfer (DBT) to the graduate students and working professionals for skill development.

 

Also, for facilitating IT/ITes units in government facilitated infrastructure, Monthly rental support to IT/ITes units for the first two years 50% - 10,000(INR)/seat per month and for 3 to 5 years 25% - 5,000(INR)/seat per month. There are certain additional incentives for IT/ITes units, eligible units can claim for Employment Generation Incentive & Aatmanirbhar Gujarat Rojgar Sahay.

Large-scale Information, Education, and Communication (IEC) programs target school children and the general public for improving digital literacy and enhancing awareness of Information Technology.

 

Special initiatives to boost IT employment in the state through Employment Generation Incentive (EGI) – 50 % of CTC up to INR 60,000 for female employees and INR 50,000 for male employees for new employees hired and retained for a minimum of one year. Also, reimbursement of female employers up to 100% and for male employers 75% EPF contribution through Aatmanirbhar Gujarat Rojgar Sahay. Also, for interest subsidy up to INR 1 Cr. Per year for 5 years at 7% on the term loan or the actual interest paid. For securing operational needs electricity duty incentives (EDI), 100% of electricity duty paid by IT/ITes units to the government of Gujarat for a period of 5 years.

 

Investor facilitation desk service will be provided which includes a 24*7 centralized helpdesk, easy connections with stakeholders, promotion of the Gujarat IT sector, institutional financial support, and a knowledge-sharing platform.

The Department of Science and Technology, Government of Gujarat, is authorized to interpret any provision of this resolution and to provide an explanation/judgment concerning any provision, bearing in mind the policy and scheme's objectives, and its decision will be final and binding on everyone. This new policy is intended to be the reason for the development of the IT industry in the state which will affect the real estate industry in many factors. Dedicated IT buildings, demand of new offices as per the enhancement in the IT can be predicted high.

*GFCI – Gross Fixed Capital Investment.


Related Experts

Viren Mehta

Managing Director

Office Services

Ahmedabad

Viren Mehta is the Managing Director, Office Services | Gujarat.

Based in Ahmedabad, Viren leads our Office Services business in Gujarat – one of our key markets – to identify new business opportunities to grow our market share in the state. He collaborates with other Office Services and service line leaders to cross-sell and explore new business opportunities.

A well-known name in India’s real estate industry, Viren has more than 23 years of experience in the real estate and banking industries, where he focused on establishing and growing new businesses, implementing end-to-end transactions, and leading operations to drive productivity and maximise revenue. He also has an expertise in conceptualising and implementing successful strategies to acquire new accounts.

Viren joined Colliers from JLL India, where he was the City in-charge and Head of Transactions for Gujarat. Previously, he also assumed leadership roles at ING Vysya and Yes Bank and took on various international assignments with the Equitorial Trust Bank in Nigeria.

With his enterprising spirit and impressive track record of driving transactions and establishing successful businesses, Viren sets out to successfully position Colliers as the preferred partner of clients and lead our industry into the future.

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