Gujarat launches new IT/ITeS policy, aims to generate 1 lakh jobs in 5 years

BL Ahmedabad Bureau | | Updated on: Feb 08, 2022

Mumbai: Gujarat Chief Minister Bhupendra Patel speaks during the curtain raiser for the 10th edition of Vibrant Gujarat Global Summit 2022, in Mumbai, Thursday, Dec. 2, 2021. (PTI Photo/Kunal Patil)(PTI12_02_2021_000130B) | Photo Credit: KUNAL PATIL

Targets to increase annual IT/ITeS exports from ₹3000 crore to ₹25,000 crore

Gujarat government has announced new IT/ITeS policy for the next five years providing financial incentives of up to ₹200 crore to the entities willing to incur capital expenditures.

The new policy, unveiled by Gujarat Chief Minister Bhupendra Patel on Tuesday, aims to generate employment for about 1 lakh people during the next five years. It also seeks to increase Gujarat's IT-ITeS exports from current ₹3,000 crore annually to ₹25,000 crore over the next five years.

The operative period of the new policy will start from the day of notification till March 31, 2027.

"We are launching this policy with an aim to realise the Atmanirbhar Bharat Mission through Atmanirbhar Gujarat with the help of information technology. The other objectives of the policy include creating an IT talent pool for the high-skilled industries and provide modern IT infrastructure to build a complete ecosystem," said Patel while launching the policy.

The policy looks to encourage research and development in crucial components of the cloud ecosystem including artificial intelligence, machine learning, quantum computing, blockchain and other emerging technologies.

Vijay Nehra, Secretary, Department of Science and Technology, Gujarat stated that the new policy is unique on multiple counts as it is developed on the Capex (capital expenditure)-Opex (operations expenditure) model.

"We are adopting a Capex-Opex Model to provide a simplified and flexible approach towards the industry so that they can plan the expenditure and turnaround the viability concerns," said Nehra.

The policy, according to Nehra, has enhanced the tailor-made incentive scheme with special provisions for mega projects. While the policy fosters R&D in emerging technologies, it also incentivises the development of IT city/ townships for facilitating a walk-to-work culture.

"A unique incentive structure is specifically designed to ease the complexity involved in claiming the fiscal incentives," stated Nehra.

Cheers from industry

The industry veterans hailed the new policy. Amit Saluja, Centre Head of NASSCOM Centre of Excellence at Gandhinagar termed the policy "transformational", which will "drive a lot of growth in the IT and ITeS industry in Gujarat."

"The focus on skilling, preparing industry-ready talent, and providing robust infrastructure is a meaningful endeavour to take Gujarat among the top-5 states in the IT industry," he added.

Welcoming the policy, Tapan Ray, MD & Group CEO, GIFT City has hinted that it will boost "fintech and start-up activities giving rise to quality employment opportunities, leading to overall prosperity of the region."

Rajiv Bhatia, President and Country Head, Analytix Business Solutions stated that the new policy will play a catalyst role in the growth of the IT & ITES industry in the State.

"We look forward to supporting this excellent policy by adding growth and expansion to our operations in the State," he said.

Incentives

The new IT/ITeS policy offers up to 25 per cent (with ceiling of ₹50 crore) capex support for projects having gross fixed capital investment (GFCI) of up to ₹250 crore. For the GFCI over ₹250 crore, there are tailor made and enhanced incentives with capex support at 25 per cent with ceiling of ₹200 crore. To encourage companies invest more, the government has introduced early mover advantage wherein first three companies with GFCI of over ₹100 crore will be considered as mega units.

The government has also introduced employment generation incentive with one-time support to those units hiring local employees for a minimum one year period.

For each employee employed, the unit will get one-time assistance of 50 per cent of the CTC maximum up to ₹50,000 in case of male employee and ₹60,000 for female employees.

There is up to 100 per cent concession for employers on employee provident fund (EPF). The policy offers seven per cent interest on term loan of up to ₹5 crore. It also encourages training and skill development for IT/ITeS by offering concession on course fees for identified training programmes.

In order to encourage cloud infrastructure, the policy offers electricity concession for data centers and cable landing station. Besides, the State government is planning to develop co-working facilities.

Published on February 08, 2022
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