Vision

To transform the IT landscape of Gujarat by becoming one of the leading states in terms of world-class lr infrastructure, availability of high-skilled resources and innovation in Emerging Technologies

Objectives

The key objectives of the Policy are

1. To act as a catalyst in the growth of the lT/lTeS ecosystem
2. To enable the stakeholders of the lT/lTeS sector to create state-of{he-art lT infrastructure in the form of ready to occupy co-working office spaces
3. To enable the creation of high-skilled lT human resources in the state.
4. To encourage large-scale investment in the lT/lTeS sector through specia provisions for mega lT/lTeS projects.
5. To establish the state as a hub for innovation in Emerging and Advanced Technologies.

Targets

The proposed Policy aims to achieve the following milestones in the next five years:

1. Place Gujarat in the top five performing states of lndia in lT sector
2. lncrease Gujarat’s annual lT exports from INR 3,000 Cr. to over INR 25,000 Cr.
3. Generate more than one lakh new lT/lTeS jobs in the State.
4. Become the national leader in terms of world-class lT infrastructure, Data Centers and lnnovation Centers in Emerging Technologies.

Drivers

1. Government facilitated state-of-the-art lT infrastructure
2. lncentivising the development of lT Cityffownship for facilitating a Walkto-Work culture
3. Fostering Research & Development in Emerging Technologies
4. Al School or Center of Excellence – Advanced research center as a special Mega Project
5. Upskilling state-wide talent through fiscal incentives for skill upgradation courses
6. Enhancing digital literacy from the grassroots level
7. CAPEX-OPEX model – A unique and simplified approach towards the scheme of assistance
8. Enhanced tailor-made incentive scheme with special provisions for Mega Projects
9. Special employment generation incentives for boosting local employment
10. Enabling cloud computing by encouraging technologically advanced Data Centers and supporting the establishment of Cable Landing Station (CLS)
11. Online lncentive Portal for efficient and transparent implementation

Eligible Units:

New Unit: New IT/ITeS Entities commencing commercial operations from 7th Feb’2022 onwards in Gujarat with minimum of 10 employees on its payroll (also included, Existing units operating outside Gujarat but commencing commercial operations in Gujarat from 7th Feb’2022 onwards)

Expansion Unit:

IT/ITeS units already operating in Gujarat (with minimum 10 employees on its payroll) and increases headcount on its payroll by 50% of past 1 year average number of employees. (As per Policy, 50% growth to be achieved during the operative period of the Policy but clarification like previous policy is expected where 50% increase shall be required in 1 or 2yrs period depending upon the amount of Investment)

Incentives and Offerings for the Eligible Units (with Investment up to INR 250 Cr.):

CAPEX Support:
One-time CAPEX support of up to 25% of the eligible CAPEX expenditure, subject to a max ceiling of INR 50 Cr. (in twenty (20) equal quarterly installments). Eligible Capex Expenditure includes (within 2years of commencement of commercial operations): – construction of the building (capped at INR3,000/sq. ft. of built-up area, applicable for a total built-up area computed at 60 sq. ft. of built-up area per employee )

• Computers, software, networking related hardware and
• Other related fixed assets (expected to include major asset heads of IT/ITeS units like Furniture, Electrification, ACs and other Office Equipments but clarification is awaited)
• Stamp Duty & Regn Fees paid for lease/sale/transfer of land and office space. – Expenditure towards purchase of equipment for setting up of captive Renewable Energy Plant

OPEX Support:
OPEX support of up to 15% of the annual eligible OPEX expenditure (max ceiling of INR 20 Cr. per year for a period of 5 (five) years from the date of eligibility. The disbursement will be done in quarterly installments. ‘Eligible OPEX expenditure’ includes the following:
A. Lease rental paid to a third party (cap of Rs.50/sqft of built-up area)
B. Bandwidth expenditure (from a service provider with valid GST Number)
C. Cloud rental expenditure (from a service provider with valid GST Number)
D. Power tariff expenditure (excluding Electricity Duty which is refunded separately)E. Patent expenditure (up to INR 5Lacs per patent, max 10 patents/year for 5 years)(Expansion Units are expected to get OPEX Support only on the Incremental OPEX Expenditure like previous policy but new policy is silent on the same and clarification is awaited)

Employment Generation Incentive (EGI):

One-time support for every new and unique job created in the State. It is applicable for new local employees hired and retained for a minimum period of one year at 50% of one month’s CTC up to INR 50,000 per male and INR 60,000 per female employee.
Note: The EGI assistance is tied to each individual IT employee and can only be claimed once for each individual IT employee in their lifetime. Therefore, if an IT/ITeS unit claims this incentive for any individual IT/ITeS employee, and thereafter the same individual IT/ITeS employee moves to another IT/ITeS unit, the subsequent IT/ITeS unit cannot claim the EGI assistance for the same. The applicable rules to implement the EGI assistance shall be formulated and released separately. (This support is expected to be provided not only for Freshers but even Lateral/Experienced Hiring, one-time for each employee and is expected to be tracked via Aadhar Number of the Employees with Gujarat address but detailed clarification is awaited)

Interest Assistance:
Interest subsidy at 7% p.a. on the Term loan for 5 years from the start of actual interest repayment, with a ceiling of INR 1 Cr. per annum. Presently, policy includes Term loan only for the Expenditure towards construction of the building, Computers, software, networking related hardware and other related fixed assets. (Clarification is awaited to include Purchase of Office Premises as well under this head like it was allowed in the previous policy)

Electricity Duty Incentive (EDI)
Reimbursement of the entire amount of electricity duty paid by the eligible units to the Government of Gujarat for a period of five years. (Presently, it comes around INR 2 per unit of consumption)

Apart from these incentives, there are provisions for even better incentives for Mega Projects with Investments > INR 250 Cr. or Employment Generation of 2000 Direct IT/ITeS Employees.

Upskilling industry-ready talent: The Government will incentivize the beneficiaries (students and working professionals of Gujarat) for successfully completing globally recognized courses in Information & Communication Technology (ICT) through Direct Benefit Transfer (DBT) up to a maximum of IN R 50,000 per course or up to 50 per cent of the course fee, whichever is lower. (Separate operational guidelines will be issued for the same)

Facilitating Infrastructure (Co-working Spaces)
The eligible IT/ITeS units opting to start their operations in co-working IT office spaces under the Government facilitated/empanelment model shall be eligible for the following fiscal support for a period of five years from the date of start of commercial operations or in-principle approval, whichever is later: –

• 50% of per seat monthly rental for First 2yrs with Incentive ceiling of INR 10,000 per seat per month
• 25% of per seat monthly rental for 3 to 5yrs with Incentive ceiling of INR 5,000 per seat per month