Here is a summary of the policy’s objectives, targets, eligibility and the incentives available to eligible units.
Objectives.
- Act as a catalyst for the growth of the IT/ITeS ecosystem.
- Enable stakeholders to create state-of-the-art IT infrastructure, in the form of ready-to-occupy co-working office spaces.
- Enable the creation of high-skilled IT human resources in the state.
- Encourage large-scale investment in the IT/ITeS sector through special provisions for mega IT/ITeS projects.
- Establish the state as a hub for innovation in emerging and advanced technologies.
Targets for the next five years.
Top five states
Place Gujarat among the top five performing states of India in the IT sector.
IT exports
Increase annual IT exports from INR 3,000 Cr to over INR 25,000 Cr.
Jobs
Generate more than one lakh new IT/ITeS jobs in the state.
National leader
Lead the country in world-class IT infrastructure, data centres and innovation centres in emerging technologies.
Policy drivers.
- Government-facilitated, state-of-the-art IT infrastructure
- Incentives for IT cities/townships to support a walk-to-work culture
- Research and development in emerging technologies
- AI School or Centre of Excellence: an advanced research centre as a special mega project
- Upskilling state-wide talent through fiscal incentives for skill upgradation courses
- Enhancing digital literacy from the grassroots level
- CAPEX-OPEX model: a simplified approach to the scheme of assistance
- Tailor-made incentives with special provisions for mega projects
- Special employment generation incentives to boost local employment
- Enabling cloud computing by encouraging advanced data centres and supporting Cable Landing Stations (CLS)
- An online incentive portal for efficient and transparent implementation
Eligible units.
New unit
New IT/ITeS entities commencing commercial operations in Gujarat from 7 February 2022 onwards, with a minimum of 10 employees on payroll. Existing units operating outside Gujarat that start commercial operations in Gujarat from that date are also included.
Expansion unit
IT/ITeS units already operating in Gujarat with a minimum of 10 employees on payroll, which increase headcount by 50% over the past one-year average number of employees.
Incentives at a glance.
For eligible units with investment up to INR 250 Cr:
| Incentive | Support | Ceiling / period |
|---|---|---|
| CAPEX support | Up to 25% of eligible CAPEX | INR 50 Cr, in 20 equal quarterly instalments |
| OPEX support | Up to 15% of annual eligible OPEX | INR 20 Cr per year, for 5 years |
| Employment generation | 50% of one month’s CTC per new job | INR 50,000 (male), INR 60,000 (female) |
| Interest assistance | 7% p.a. on term loan | INR 1 Cr per year, for 5 years |
| Electricity duty | Full reimbursement | 5 years |
The incentives in detail.
CAPEX support
One-time support of up to 25% of eligible CAPEX expenditure, subject to a maximum of INR 50 Cr, paid in twenty equal quarterly instalments. Eligible CAPEX, incurred within two years of starting commercial operations, includes:
- Construction of the building, capped at INR 3,000 per sq. ft. of built-up area, applicable to a total built-up area computed at 60 sq. ft. per employee
- Computers, software and networking-related hardware
- Other related fixed assets (expected to include furniture, electrification, ACs and other office equipment; clarification is awaited)
- Stamp duty and registration fees paid for lease, sale or transfer of land and office space
- Expenditure on equipment for setting up a captive renewable energy plant
OPEX support
Support of up to 15% of annual eligible OPEX, with a maximum of INR 20 Cr per year for five years from the date of eligibility, disbursed quarterly. Eligible OPEX includes:
- Lease rental paid to a third party (capped at Rs 50 per sq. ft. of built-up area)
- Bandwidth expenditure (from a service provider with a valid GST number)
- Cloud rental expenditure (from a service provider with a valid GST number)
- Power tariff expenditure (excluding electricity duty, which is refunded separately)
- Patent expenditure (up to INR 5 lakh per patent, maximum 10 patents a year for 5 years)
Employment Generation Incentive (EGI)
One-time support for every new and unique job created in the state. It applies to new local employees hired and retained for at least one year, at 50% of one month’s CTC, up to INR 50,000 per male and INR 60,000 per female employee.
The EGI is tied to each individual IT employee and can be claimed only once in that person’s lifetime. If a unit claims it for an employee who later moves to another IT/ITeS unit, the new unit cannot claim it again. The rules to implement the EGI will be formulated and released separately.
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. At present, the policy covers term loans only for construction of the building, computers, software, networking-related hardware and other related fixed assets.
Electricity Duty Incentive (EDI)
Reimbursement of the entire electricity duty paid by eligible units to the Government of Gujarat for five years. At present, this comes to around INR 2 per unit of consumption.
Mega projects.
The policy offers even better incentives for mega projects, with investment above INR 250 Cr or employment generation of 2,000 direct IT/ITeS employees.
Upskilling industry-ready talent.
The Government will incentivise students and working professionals of Gujarat who successfully complete globally recognised ICT courses, through Direct Benefit Transfer (DBT) of up to INR 50,000 per course or up to 50% of the course fee, whichever is lower. Separate operational guidelines will be issued.
Facilitating infrastructure: co-working spaces.
Eligible units that start operations in co-working IT office spaces under the Government-facilitated or empanelment model get fiscal support for five years from the start of commercial operations or in-principle approval, whichever is later:
| Period | Support | Ceiling |
|---|---|---|
| First 2 years | 50% of per-seat monthly rental | INR 10,000 per seat per month |
| Years 3 to 5 | 25% of per-seat monthly rental | INR 5,000 per seat per month |
Need help claiming these incentives?
Contact our Gujarat subsidy team for guidance on eligibility and applications.