Gujarat declares new IT/ITES policy; targets 15-fold turnover jump by 2020

With an aim to help “create an IT/ITeS ecosystem” in Gujarat and to attract new IT firms…

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It is proposed that forging units, particularly the SMEs, should also be allowed to import on concessional terms, new or used machinery of not more than 10 years

With an aim to help “create an IT/ITeS ecosystem” in Gujarat and to attract new IT firms, the state government on Saturday declared a new Information Technology Policy (2014-19). This policy has a target of achieving an ambitious 15-fold increase in the state’s annual IT/ITES turnover, by 2020.

The IT policy aims to increase the turnover of the state to 75,000 crore or USD 15 billion and create employment opportunities for 10 lakh persons by 2020, stated state finance minister Saurabh Patel in a release here.

“At present there are about 1400 plus IT/ITES companies in Gujarat with a total annual turnover of USD 1 billion or Rs 6000 crore. With this policy we expect 500 new IT units to be set up in the state every year,” said a state government official.

Under this new policy, the state government will “duly facilitate allotment of land for IT/ITES units investing in the state.” Special provisions have been made for mega IT/ITES projects that have an investment size of Rs 50 crore (excluding the cost of land) and can provide employment to 1000 (for IT companies) and 1500 (ITES firms) persons. For those interested in developing IT/ITES technology parks the state government will give a 50 percent exemption in the fixed capital investment (cap of Rs 2.5 crore) in buildings and infrastructure facilities.

Among a slew of sops announced today, the state government will also provide all new IT/ITES companies with 100 percent relief in electricity duty for a period of five years from the date of commencement of operations. These units will also be given 100 percent exemption in stamp duty and registration fee for the sale/lease/transfer of land which will be limited to the first transcation.

About 30 percent subsidy — with a ceiling of five lakh per annum for two years — will be given. Moreover, 25 percent subsidy will also be given for new IT/ITES units who wish to set up their firms in IT parks.

Apart from this, 100 percent reimbursement will be given to the units on EPF deposited for women employees and 75 percent reimbursement in case of male employees (ceiling of Rs 5 lakh per annum).

Some of the provisions for Micro, Small and Medium Enterprises (MSME) units in Gujarat has been incorporated in this IT policy. This includes interest subsidy for five years, seven percent subsidy on a sum of up to Rs 25 lakh annually and a five percent subsidy for up to Rs 35 lakh for IT/ITES MSMES.

Encouragement will also be given to help the firms acquire new technology, get patents, quality certification, R&D and development of markets.

The state government also plans to establish a “start-up village or incubation centre” at one of more places in the state. “By declaring a separate IT/ITES, E-governance (declared today) and a electronic policy (declared a couple of days back), we are trying to create an entire ecosystem for the sector in the state,” said S J Haider, secretary, Department of Science and Technology in the state.

The new IT policy comes just days after the state government had announced an Electronics Policy which targets an investment inflow of USD 6 billion by 2020.

“Duty exemptions of various kinds offered in IT policy will encourage SME segment to sustain businesses and we would surely see influx of investments in SME sector.” Jay Ruparel, President GESIA (Gujarat Electronics & Software Industries Association).

“The financial assistance in infrastructure and interest subsidy will attract larger companies to setup their operations in Gujarat and hence create immense opportunities for jobs” Ruparel added.

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