Gandhinagar: Chief Minister Shri Bhupendra Patel has announced a new Gujarat IT and ITeS policy with a commitment to promote rapid and inclusive growth in the IT sector in the state. This new policy will be in force for five years i.e., from 2022 to 2027.
The Chief Minister announced this new policy at Gandhinagar in the presence of Shri JitubhaiVaghani, Minister of Education and Science and Technology. Chief Secretary to the Chief Minister Shri K. Kailasanathan, Chief Secretary Shri Pankaj Kumar, Senior Secretaries, Secretary of the Department of Science and Technology Shri Vijay Nehra as well as representatives of nine nationally and internationally renowned IT organizations were also present on the occasion.
Hon'ble CM launches IT/ITeS policy 2022-2027, aiming at unprecedented growth of IT sector in Gujarat https://t.co/Mf6WipOvNV
— Bhupendra Patel (@Bhupendrapbjp) February 8, 2022
The Chief Minister said that technological revolution has changed the world economically and commercially. These new and emerging IT technologies are revolutionizing all sectors throughout the world, and have had a significant impact on businesses, governments, and the labour market, and are enabling the smallest of players to compete with traditional giants. The Chief Minister said that the Indian IT sector under the enterprising leadership of Hon’ble Prime Minister of India, Shri Narendra Modi has steered our nation to a leadership position in the global IT landscape in terms of employment and economic value creation.
He further said that the state government has envisaged the creation of a conducive business ecosystem by formulating a robust policy framework and introducing simplified procedural requirements for setting up IT operations in the State. He stated that in its efforts to institutionalize the vision of ‘Aatmanirbhar Gujarat to Atmanirbhar Bharat’ in the Information Technology sector, the Government of Gujarat has launched the Gujarat IT/ITeS Policy (2022-27). Chief Minister Shri Bhpuendra Patel said, “I strongly believe that this policy will help us contribute significantly to one of the eight dreams of Hon’ble Prime Minister, Shri Narendrabhai Modi – Berozgari se mukt, Rozgari se yukt.”
Explaining the objectives of Gujarat IT/ITes Policy in detail, the Chief Minister said that the objectives are to create high skilled, industry ready IT talent pool; provide state-of-the-art IT Infrastructure; develop a unique and simplified incentive scheme; establish a robust cloud ecosystem in the State and foster research & development in new and emerging technologies such as Artificial Intelligence, Machine Learning, Quantum computing, Blockchain etc.
He further said that the new policy also aims to increase Gujarat’s annual exports in the IT sector from Rs.3,000 crore to Rs.25,000 crore and create more than 1 lakh new employments in the IT and ITeS sector. The Chief Minister also added that Gujarat is striving to get a place in the top five states of the country in the field of IT. He said that the new policy aims to make Gujarat a leader in world class IT infrastructure, data centers and availability of innovation centers in emerging technology.
The Chief Minister presented the salient features of the new policy, which are as under:
- The policy introduces a unique concept of CAPEX-OPEX model which is first-of-its-kind across the nation:
- A) The policy envisions CAPEX support of 25% up to INR 50 Cr. for normal projects and INR 200 Cr. for Mega Projects.
- B) Under the OPEX model the government will provide support of 15% up to INR 20 Cr. per year for normal projects and INR 40 Cr. per year for Mega Projects
- In an effort to boost the IT employment in the State, the Government of Gujarat has envisaged two special incentives in the Policy:
- Employment Generation Incentive (EGI) up to INR 60,000 per employee
- Up to 100% reimbursement of employer’s EPF contribution through the Atmanirbhar Gujarat Rojgar Sahay
- Assistance for Interest repayment @7% on term loan up to INR 5 Cr.
- 100% reimbursement of Electricity Duty to all eligible IT/ITeS units.
- Establishment of the Gujarat AI School / AI Center of Excellence with the objective to become the foremost source of Industry ready skilled talent for the IT Industry.
- Financial support up to INR 50,000 per person through Direct Benefit Transfer (DBT) to the graduate students and working professionals for skill development.
- Large-scale Information, Education and Communication (IEC) programs targeting school children and general public for improving digital literacy and enhancing awareness of Information Technology.
- Incentivizing the development of IT Cities / Townships with CAPEX support up to INR 100 Cr. and relaxations in regulatory & FCI norms.
- Facilitate the creation of world class co-working spaces to enable any IT company to fast track their IT operations in the State.
- Rental subsidy @50% up to INR 10,000 per seat per month to IT companies setting up under the Government facilitated infrastructure scheme.
- Recognizing the importance of cloud technology, the Government has undertaken substantive steps towards improvement of Cloud infrastructure:
- Data Center: CAPEX support of 25% up to INR 150 Cr. and Power tariff subsidy of INR 1/unit for a period of 5 years
- Cable Landing Station (CLS): CAPEX support of 25% up to INR 20 Cr. and Power tariff subsidy of INR 1/unit for a period of 5 years.
Summary Table of Fiscal Incentives under the Gujarat IT/ITeS Policy (2022-27)
|S.No.||Incentive Category||Applicable Entity||Fiscal Assistance|
|1||CAPEX OPEX Model
Category – I Projects
(GFCI < INR 250 Cr.)
|IT / ITeS Unit||CAPEX Support
25% of Eligible CAPEX Expenditure up to INR 50 Cr.
15% of Eligible OPEX Expenditure up to INR 20 Cr. per year for 5 years
|2||CAPEX OPEX Model
Category – II Projects
(GFCI > INR 250 Cr.)
|IT / ITeS Unit or any other deemed Mega Project||CAPEX Support
25% of Eligible CAPEX Expenditure up to INR 200 Cr.
15% of Eligible OPEX Expenditure up to INR 40 Cr. per year for 5 years
|3||Support for IT City / Township||Only IT Office space in the City / Township||25% of Eligible CAPEX Expenditure up to INR 100 Cr.|
|4||Government Facilitated Infrastructure||IT / ITeS Unit||Monthly Rental support for 5 years for IT/ITeS units utilizing empanelled office spaces:
First 2 years – 50% support up to INR 10,000 per seat per month
Next 3 years – 25% support up to INR 5,000 per seat per month
|5||Skill Development||IT professionals & Graduate Students of Gujarat||Financial support by way of Direct Benefit Transfer (DBT) up to a maximum of INR 50,000 per course or up to 50% of course fee, whichever is lower|
|6||Employment Generation Incentive (EGI)||IT/ITeS Unit||Eligible IT/ITeS unit shall be entitled to one-time support for new job creation applicable for new local employees hired and retained for minimum period of one year @ 50% of one month’s CTC up to INR 50,000 per male & INR 60,000 per female employee|
|7||Aatmanirbhar Gujarat Rojgar Sahay||IT/ITeS Unit||Eligible IT/ITeS units will be eligible to claim reimbursement on the Employer’s statutory contribution under EPF subject to following criteria:
· 100% for female employees
· 75% for male employees
|8||Interest Assistance||IT/ITeS Units||Eligible IT/ITeS units will be entitled to interest subsidy @7% on term loan with a ceiling of INR 1 Cr. per annum for 5 years.|
|9||Electricity Duty Incentive (EDI)||Eligible IT/ITeS units||100% reimbursement of Electricity Duty|
|9||R&D incentive||R&D institutes / R&D center||One-time CAPEX support @ 60% of the cost for Machinery and Equipment, Hardware & Software (COTS/License) up to INR 5 Cr.|
|10||Support for Data Center||Data Center||CAPEX Support @25% of eligible CAPEX Expenditure up to INR 150 Cr.
OPEX Support – INR 1 / unit power tariff subsidy
|11||Support for Cable Landing Station (CLS)||Cable Landing Station (CLS)||CAPEX Support @25% of eligible CAPEX Expenditure up to INR 20 Cr.
OPEX Support – INR 1 / unit power tariff subsidy
This IT / ITeS policy (2022-27) is envisioned to transform the state’s information technology landscape in the IT ecosystem of Gujarat. The Chief Minister expressed confidence that Gujarat would become a “Destination of Choice” for the IT ecosystem by strengthening various aspects to make Gujarat one of the leading states in the field of information technology.