Modification / Amendments / Clarification in the IT/ITeS Policy (2016-21)

IT/ITeS Policy (2016-21)

Over the last two decades Information Technology (IT) and Information Technology enabled Services (ITeS) Industry in India has emerged as a strategic sector in India’s competitiveness in global market on both employment as well as economic value creation fronts. IT as a sector has marched ahead at a brisk pace evolving into a key driver to both India’s global trade and to Indian’s mobility.

A report by NASSCOM evaluating the contribution of IT over last decade brings out that; IT has offset 65% of India’s cumulative net oil imports. IT/ITeS sector has contributed to 45% of incremental urban employment – both direct and indirect – with over 30% women employees and 45% new entrants. The report also acknowledges that for the globally competitive marketplace IT has opened the doors for India in forging business relationships with almost all Fortune 500 companies.

Another research predicts that innovation in the IT will drive the global value creation over next 10 years. Such growth will be led by innovations build around Cloud, Mobile, Social Media, Bigdata Analytics, Crowd-sourcing and Internet-of-things (IoT). The Internet-of-things spending which currently stands at USD 1.7 trillion, driven by nearly 15 billion devices, is expected to rise 2 to USD 3 trillion with nearly 30 billion devices

NASSCOM report also predicts that several global mega trends in economic, demographic, business, social and environment will create new opportunities for IT/ITeS by 2020. Such mega trend will open up new industry verticals such as public sector, healthcare, media and utilities; will open up new customer segments pre-dominantly from small and medium businesses; and will open hitherto closed economies from IT perspectives, in countries such as Japan, BRICS nations, African and South American continents. The report predicts that these new opportunities will lead to IT exports from India of USD 175 billion by 2020.

Acknowledging the potential of IT as a key driver of increasing knowledge based global economy, the Government of India came out with National Policy on Information Technology (NPIT), 2012, to achieve twin goals of bringing the power of Information and Communication Technology (ICT) within the reach of people of whole of India and harnessing the capability and human resources within the country to enable it to emerge as an important Global Hub for IT and ITeS. The Policy has set the following objectives:

  • To increase revenues of IT/ ITeS Industry from USD 100 billion in 2012 to USD 300 billion by 2020 and expand exports from the segment from USD 69 billion in 2012 to USD 200 billion by 2020.
  • To create a pool of 10 million additional skilled manpower in ICT.
  • To gain significant global market- share in emerging technologies and services.

The increasing importance of IT/ITeS industry and its huge scope for encouraging employment has been recognized by all State Governments. Previously, banking on its locational advantage and entrepreneurial spirit of its people, Gujarat built core strength in Pharmaceuticals, machine tools, chemicals, textiles, petrochemicals, port development and power sector. Beginning with IT Policy in 1999, the Government recognized the need for a different approach for development of IT/ITeS Industry in Gujarat. Subsequently, the state came out with IT/ITeS policy in 2006. Thereafter, recognizing the importance of IT as an integral part of all other industries and its penetration in to all walks of day-to-day life, it was felt that the power of technology needs to be harnessed to act as a force multiplier in addressing the current challenges in the fields of agriculture, education, healthcare, energy, industry, 3 telecommunication, rural development, tourism, textile, etc. and to ensure equitable and inclusive growth and development. In this context the IT Policy for the State of Gujarat (2014- 19) was issued.

Subsequent to the issuance of the State policy, the Government of India has stepped-up on the criticality of IT in the national growth objective. The National Policy on Skill Development and Entrepreneurship while acknowledging a huge demographic dividend potential, recognizes the need to gainfully upskill around 400 million personnel by 2022 and create employment opportunities for the same. Another initiative of Government of India in Digital India also lays emphasis on adoption of ICT for governance, employment generation, citizen empowerment and economic development.

To meet with the challenging expectations, it is necessary that IT/ITeS sector plays a lead role for both employment creation, economic growth, etc. and for upskilling and capacity building.

In consideration of the above emerging trends, it has become necessary to revisit the provisions of the IT Policy (2014-19) to make it more attractive and entrepreneur-friendly. Accordingly, the Government of Gujarat has decided to come out with the ‘Gujarat State New IT Policy’ (2016-21) as under:

Click here to download Scheme of Assistance

Realizing to the fullest possible extent the infinite potential of the Equation:

IT + IT = IT,

That is, Indian Talent + Information Technology= India Tomorrow
to create and build a vibrant and sturdy edifice of IT/ITeS Eco-system on the basis of Innovation and Knowledge Capital, to utilize huge talent pool of Young India and to contribute
to the overall economy and prosperity of the State and the Nation.

Enabling Information Technology for all sections of society. It is aimed

  • to leverage Information Technology as an enabler and catalyst for the socioeconomic development of the State
  • to attract and promote IT and ITeS companies that provide product or services for urban and rural markets to ensure that overall regional balance is achievedand maintained, thereby effectively bridge the digital divide
  • to create capacities in IT/ITeS industry in the state to play an important role inskill building, employment generation and earnings from exports.

Facilitating MSMEs as key drivers of Growth

  • to become a preferred IT destination for Micro, Small and Medium Enterprises(MSMEs)
  • to aim for Excellence in Innovation, R&D and Entrepreneurship
  • to seed educational and R&D institutions with required IT infrastructure forpromoting innovation and excellence
  • to promote entrepreneurship and to create equitable employment opportunities for different sections of the society across different geographical regions

Forging powerful Global Partnerships

  • to forge partnerships in emerging technologies with leading IT/ITeSorganisations/agencies in the world to promote the sector in the state

Empowering youth through ICT Skills

  • to significantly enhance quality and availability of IT skilled manpower.
  • to establish knowledge based economy in the State.

Making Gujarat a preferred destination for Global Knowledge Workforce and Industry

  • to achieve higher level of domestic and export revenue turnover resulting in enhanced productivity and augmentation of Gross State Domestic Product(GSDP).
  • to provide proactive, congenial and industry-friendly climate conducive for ITcompanies to flourish in a most competitive and efficient manner.

The key objectives of this Policy are:

  • To increase the current investment in IT/ITeS sector by 10 times.
  • To increase the turnover up to USD 15 Bn.
  • To increase IT exports from the State up to USD 2 Bn.
  • To promote and develop employment opportunities in the IT and ITeS Sector andprovide direct employment to 10 lakh persons.
  • To focus, inter alia, on Financial Services, Mobile Applications, Animation, 3D-Gaming,Digital Entertainment, Cloud, Big-data and Internet-of-things.
In order to avail benefits under the IT/ITeS Policy 2016-21, the unit shall intimate the Competent Authority in the Government by an Expression of Interest as per Annexure 1 to this scheme.
Any IT/ITeS unit with minimum 10 employees on its payroll, setting up its operations in Gujarat during the operative period of this policy or an existing IT/ITeS unit in Gujarat undertaking expansion and/or diversification will be eligible for availing incentives under this policy. For IT/ITES units being setup in the Gujarat International Finance Tec – City (GIFT), the minimum requirement of 10 employees will not apply.
IT Enabled Services (ITeS) implies service rendering through application of IT and will include the following:
  1. Call Centres
  2. Medical Transcriptions
  3. Back Office Operation/Business Process Outsourcing (BPO)/ Knowledge Process Outsourcing (KPO)
  4. Revenue Accounting and other ancillary operations
  5. Insurance claim Processing
  6. Web/Digital Content Development / ERP / Software and Application Development
  7. Financial and Accounting Processing
  8. HR & Payroll Processing
  9. Bioinformatics
  10. IT enabled banking, non-banking services including insurance, pension, Asset Management and market related services
  11. Depository and Security registration and dematerialization services
“Expansion and/or Diversification” means an existing unit in Gujarat undertaking 6 seat capacity expansion such that total seat capacity as well as head count of employees on its payroll goes up by 50% of current seat capacity or by 1000 persons, whichever is lower, during the operative period of the policy.

‘Horizontal IT/ITeS Park’ means a site which is developed during the operative period of policy in a minimum area of 5 acres in which 70% of saleable/leasable area is allotted to at least three IT/ITeS units.

‘Vertical IT/ITeS Park’ means new development undertaken during the operative period of policy in the nature of either a vertical development in the shape of a tower or a group of towers with minimum 100,000 sqft of saleable/leasable area; out of which 70% of saleable/leasable area is allotted or to be allotted to at least three IT/ITeS units or a vertical development in the shape of a tower or a group of towers with minimum 3000 seat capacity built by any IT/ITeS unit of which 60% capacity is actually occupied during the operative period of the policy