Telangana incentives to fuel IT sector growth

Hyderabad: The Telangana government is providing fiscal and non-fiscal incentives to information technology (IT) and information technology enabled services (ITeS) companies under its IT Policyto attract new investment into the State.

Hyderabad leads in terms of attracting Fortune 500 companies to invest in the State. Though the city boasts of the presence of IT giants, the State government is placing major focus on attracting new investments and new companies into the State.

Apart from providing world-class infrastructure, ensuring continuous power and water supply, giving access to a rich talent pool, the Government of Telangana has created a favourable business environment for all kinds of companies such as R&D companies, BPO centres, mega investments, SMEs and startups by providing attractive incentive packages under the policy launched in 2016.

The fiscal incentives given by the State are of two types.The first one is a common fiscal incentive for all companies. Under this, an IT company if it meets eligibility criterion, can avail the benefits of easy allotment of government land to setup units -all allotments of Government land to the IT Industry are made subject to land availability, fulfillment of eligibility criteria by the applicant IT/ITeS company.

To avail the land, the companies are required to pay land cost and development cost, as determined by the Government/ Government agencies from time to time.

IT firms have been classified as industrial units for the purpose of levying the industrial power tariff category.

Industrial Power Category Conversion Certificate is accorded to all the service connections, and also to be exclusively used by the IT industry for their operations, even in multiple locations/metres.

"The various incentives being provided by the Telangana government under the State IT Policy has been working well for the companies who have invested in the State," Srikanth Srinivasan, Sr Director & Head – Membership and Outreach, Nasscom, Hyderabad, told Bizz Buzz:

The incentive policy and pro-active steps have greatly helped in attracting a number of new Tech organisations to invest in Telangana, he added.

Under the policy, the TS government is offering 100 per cent reimbursement of stamp duty, transfer duty and Registration fee paid by IT companies on sale/lease deeds on the first transaction. Also, 50 per cent reimbursement of stamp duty, transfer duty and registration fee paid by IT companies on sale/lease deeds on the second transaction. The reimbursement of the registration cost is not applicable for mega projects.

In addition to the incentives mentioned above, the State government will reimburse the cost of filing patents/copy rights to companies having their research and development units in Telangana for successfully receiving patents/Copy Rights from competent statutory authority.

Reimbursement of such cost will be limited to a maximum of Rs 5 lakh per successful Indian patent/copy right awarded and Rs10 lakh per successful international patent/copy Right awarded.

The Government will reimburse 20 per cent of expenditure incurred for obtaining quality certifications for CMM Level 4 upwards. Reimbursement will be limited to a maximum of Rs 4 lakh. Similar reimbursement will be made to BS7799 for security and also for ITeS companies for achieving COPC and eSCM certification. The IT/ITeS units/ companies can claim this incentive only once.

Sector specific incentives, facilitation

Apart from the above stated incentives that are available for IT companies from the entire ICT industry, the Telangana Government has identified and listed down focus areas for which a few additional incentives are available. These include startup companies, IT product/R&D companies in Tier II locations, SMAC Technologies, Smart City initiatives, engineering services, SMEs andmid-scale companies, SC/ST entrepreneurs, women entrepreneurs, corporate social responsibility.

The various incentives being provided by the Telangana government under the State IT Policy has been working well for the companies who have invested in the State

- Srikanth Srinivasan, Sr Director, Hyderabad, Nasscom