The Tamil Nadu government on Friday released the Data Centre Policy to develop the State as the numero uno destination for Data Centres by catering to all the specific requirements of Data Centres and providing them with an attractive business environment. The State had already signed MoUs for an investment of over ₹18,000 Crore in Data Centres during FY 2020-21.
Tamil Nadu has the second highest number of submarine cable landing stations in India housing over 30 per cent of India’s subsea cables which connect to 264 landing stations globally.
State govt’s support
The government will provide power, land and connectivity infrastructure for Data Centres; fiscal and non-fiscal incentives to Data Centre developers and operators to boost investment in the sector; support R&D, innovation and entrepreneurship and promote green Data Centres, says the policy released by Chief Minister MK Stalin at Connect2021.
The State shall encourage and support the operations of Data Centres through various incentives to the projects with an investment above ₹500 crores and those who meet at least 30 per cent of their energy consumption from renewable energy sources:
Data Centre units/parks can purchase power from Tamil Nadu Generation and Distribution Corporation Ltd. at prevailing industrial tariff rates as per the governing TNERC regulations.
Data Centre facility/Data Centre park shall be eligible for 100 per cent subsidy of Electricity Tax on power purchased from the Tamil Nadu Generation and Distribution Corporation Ltd. or generated and consumed from captive sources for 5 years from the date of commencement of commercial operation.
Concessions on Stamp duty
To facilitate the development of the Data Centre market in the State, concessions on Stamp duty/ Registration fee paid on sale/lease/transfer of land for Data Centres and parks will be offered.
“A” & “B” Category Districts — 50 per cent stamp duty concession will be given for purchase/lease of land obtained from ELCOT / SIDCO/ SIPCOT. In the case of private lands, stamp duty concession will be given as 50 per cent back ended subsidy (disbursed after full investment of ₹500 crore is achieved) for up to 10 acres for Data Centre units/parks.
“C” Category Districts — 100 per cent stamp duty exemption will be given for purchase/ lease of land obtained from ELCOT / SIDCO/ SIPCOT. In the case of private lands, stamp duty concession will be given as 100 per cent back ended subsidy (disbursed after full investment of ₹500 crore is achieved) for up to 10 acres for Data Centre units/parks.
This incentive shall have to be refunded if the Data Centre operations ceases or changes its use of land to a non-Data Centre land use within 10 years from the date of incorporation, the policy said.
The Government will encourage the maintenance of sophisticated hardware and auxiliary services required by Data Centre to involve the participation of local MSMEs
A training subsidy of up to ₹10,000 per person trained per month (for up to 6 months) per Data Centre unit shall be provided, capped at ₹1 Crore per Data Centre for the duration of the policy period.
To improve spatial efficiency and optimise operational costs, tailor-made building regulations shall be offered through the creation of a separate category for Data Centres under the Tamil Nadu Combined Development and Building Rules, 2019.
The Policy will be applicable for all Data Centres incorporated from April 1, 2021 and will be applicable to all Data Centres units/parks incorporated until March 31, 2026.
Data Centre Developers shall be encouraged to set up Data Centres within the IT SEZs developed by ELCOT. To achieve inclusive development, ELCOT has established ELCOSEZs (IT Specific Special Economic Zones) across Chennai and in 6 Tier II cities.
ELCOT shall be the State level nodal agency for the administration of the Data Centre Policy. Investment promotion for Data Centre policy shall be done by Guidance and MOUs will be signed by Guidance, the policy said.