Investment Opportunities in Odisha, India | Invest Odisha

Odisha IT Policy, 2022

Introduction

The Indian Information Technology(IT) industry has been an unqualified success story globally, becoming the topmost offshoring destination for IT companies across the world accounting for approximately more than half of the Global Services Sourcing Business. It has created huge job opportunities and contributed majorly to India’s growth and development; and in the last two decades, the industry has grown manifold in revenue terms, and its relative share of India’s GDP has increased.

Odisha, the Sunrise State in Eastern India is on the cusp of an information & communication technology revolution. The Government of Odisha has been at the forefront of the adoption of IT and experimenting with emerging technologies to drive and transform governance in the state to positively impact the lives of its citizens. This policy attempts to put in place a conducive environment for welcoming investment in the state through various initiatives. The policy also aims to usher in balanced socio-economic growth of Odisha with the suitable deployment of technology for seamless electronic service delivery, ensure the acquisition of a higher degree of employability skills for its people, provide a strong foundation for Start-ups and Innovators, and ideates to promote innovation & entrepreneurship in the state.

Objective

  • Creation of employment for 1 lakh people to be directly & indirectly employed in the IT sector.
  • Skilling for 10000 professionals.
  • Achieving 10000 crores of gross IT revenue per Annum including IT exports & domestic sales.
  • Doubling the area earmarked for the IT sector from the present level.

Vision

The vision of this policy is to transform Odisha into a leading destination for Information Technology in the country and position it prominently on the global map as a preferred IT outsourcing destination along with the quantum increase in the creation of employment opportunities thereby contributing significantly to growth and development. Odisha Government intends to use IT to usher in efficiency and transparency in governance, and give a fillip to the spread of Digital literacy in the state by realizing the goal of “Internet for all”. This policy aspires to establish Odisha as a preferred IT hub with innovation and new age/emerging technologies featuring prominently in it.

  • The PIU would be responsible for executing the Odisha IT Policy 2021 , for implementation & facilitation of various activities i.e. Application processing, Field verification & Inspection, Recommendation, issue of Operational Guidelines etc.
  • The formation of the Project Implementation Unit (PIU) and notification of Operational Guidelines for implementation by PIU shall be done within 3 months of the notification of the IT policy.
  • A task force shall be set up by E&IT Department for consultation and recommendations for quick disposal all IT Policy related points.
  • The State Government may amend any provision of this policy at any time.

Incentive framework

Incentive Name Incentive Particulars
Incentive for Fixed Capital Investment
  • Capital subsidy of 30% of fixed capital investment in buildings and infrastructure, excluding the cost of land subject to a maximum of Rs. 3 Cr. shall be accorded to eligible IT units.
  • The Subsidy is only applicable for one time purchase of computers, networking and related hardware & software.
SGST
  • 100% reimbursement of SGST as per actual paid for a period of 5 years limited to 100% of the fixed capital investment, in Bhubaneswar Development Authority (BDA) areas
  • 100% reimbursement of SGST as per actual paid for a period of 7 years limited to 100% of the fixed capital investment, in Non-Bhubaneswar Development Authority (BDA) areas
Exemption on Electricity Duty
  • IT units shall be exempted from Electricity duty, and Electrical Inspection Fee for 05(five) years. The IT Units shall be eligible for Industrial Tariff. There will be reimbursement of electricity tariff @ 30 % for 3 years capped at Rs. 35 lakhs per unit.
  • Energy Audit: Reimbursement would be provided @75% of the cost of Energy Audit subject to a cap of INR 1.5 lakhs.
Specific incentives for green practices in IT

25% reimbursement on cleaner /greener production measures limited to Rs. 30 Lakhs per unit on the basis of certification by accredited certifying agencies/State Pollution Control Board, Odisha.

Power Subsidies

Power Tariff Reimbursement of INR 0.25 to INR 1.25 per unit for a period of 5 years provided there is a minimum investment of INR 100 Crores and minimum employment of 100 people.

Employment-Based Incentives
  • 100% reimbursement of the expenditure incurred towards contribution for Employees State Insurance (ESI) and Employees Provident Fund (EPF) of employees of IT units who are domicile of Odisha up to Rs. 5 crores per annum for a period of 03(three) years.
  • For investment in Non-BDA area, reimbursement would be up to Rs. 7 Crore per annum per unit for 3 years.
Recruitment and Skilling

Recruitment Assistance: One-time Recruitment Assistance shall be provided @ Rs. 10,000 per newly recruited employee at the executive level who are domiciles of Odisha with a maximum limit of Rs. 10 Lakhs per unit for a period of 03 years. Additional Rs. 1000 per employing women, SC/ST, and Physically Disabled employees.

Human Capital Investment Subsidy: 50% reimbursement of training fees for obtaining industry-recognized skill certifications (in Emerging technologies, Project Management program, Six Sigma, ITIL, and Security Certifications such as CEIH, CISM, and CISA or equivalent, etc.) limited to Rs. 10,000 per employee and subject to an overall ceiling of Rs. 20 lakhs per unit for 5 years.

Building a skilled resource base in the state

  • Units getting any assistance under this Policy will be required to take interns in the period it gets such assistance. It can get reimbursement of 50% of stipend
  • Paid for each intern. However, the reimbursement is for maximum 20 number of interns.
  • Eligible Units can get reimbursement of 100% of stipend paid for each intern, if such interns are selected through SDTE/OSDA limited to maximum 20 interns. The duration of such internship for which reimbursement would be made is maximum 06 months & this mechanism will be different from Scheme of Apprenticeship by Govt. Of India.

Skill Upgradation: Reimbursement of up to Rs. 1.5 Lakhs for travel and stay of international guest faculty from reputed foreign Universities/Institute for maximum 5 guests in a year per Government College/University for conducting training sessions, skill upgradation programs, etc. for faculty on advanced courses related to Information Technology.

Marketing Incentive

Reimbursement would be provided as per norms indicated below for participating in designated state/national/ international exhibitions and approved trade delegations. These incentives are available to recognized Industry Associations too. Companies can avail of this incentive maximum 2 times during the Policy.

  • For National level events - 50% reimbursement of expenses capped at Rs 3 Lakhs
  • For events outside India - 50% reimbursement of expenses capped at Rs 6 Lakhs
  • For Associations/Industry bodies – Capped at Rs. 10 Lakhs with minimum 5 IT Units participation limited to international events. This can be availed 3 times by an Industry Association during the policy period.
Stamp Duty Exemption
  • The Government shall extend 100% exemption of stamp duty on first transaction and 50% exemption on second transaction on lease / sale agreement of land or built-up space allotted by Government/ IDCO/ designated development authorities to eligible IT units or to other agency for IT Projects.
  • The eligible units will be entitled to get 100% reimbursement of the conversion fee and registration fee for 1st transaction.
Interest Subsidy
  • Eligible IT units will be entitled to get interest subsidy @ 5% per annum on term loans availed from recognized financial institutions and banks, subject to a maximum of Rs. 10 Crores per year for a period of 5 years from the date of commencement of commercial operation.
  • The Government shall encourage women, SC/ST & Disabled entrepreneurs by providing them additional interest subsidy of 1 % per annum over and above the instant incentive.
Reimbursement for Internet Connectivity
  • Reimbursement @ 50% of Internet bandwidth charges per annum subject to a maximum of Rs 5 lakhs per annum for a period of 2 years from the date of first billing.
Incentives for filing patents
  • For domestic patent, 75% reimbursement of the cost incurred is capped at Rs. 2 Lakhs per domestic patent and limited to Rs. 10 Lakhs per unit during the Policy period.
  • For international patents, the amounts are Rs. 5 Lakhs and Rs. 25 Lakhs respectively.
Incentives for Certifications
  • 75% of the expenses incurred for obtaining quality and security certifications (CMM/ CMMi/ PCMM/ COPC and eSCM certification, ISO 9001, or an Equivalent / Higher Certification) limited to a maximum of Rs. 15 lakhs will be reimbursed
  • This incentive may be extended to other certifications based on the recommendations of the policy implementation authority
Research & Development Incentive
  • Reimbursement of 50% of R&D expenses (including manpower cost), limited to Rs. 1 crore per annum on the successful development of a software product/successful completion of any R&D activity.
  • Above R&D incentive will be contingent on certification by a Committee to be set up for this purpose by the Electronics and IT department comprising of Industry experts, academicians, Scientists etc.
  • Applicable only for R&D projects driven by domestic IT entities (Not applicable to Indian subsidiaries of Foreign entities) in the field of emerging technologies, new area of interest.
Promotion of VFX and Animation

Capital Subsidy: AVGC unit with min. investment of Rs. 3 Cr. and min. employment of 30 people, shall get a capital subsidy of 25% of FCI, subject to an upper cap of Rs. 20 lakhs. For Women/SC/ST/disabled entrepreneurs additional subsidy of Rs. 10 lakhs will be provided.

Animation Film/Series/Games: Reimbursement of 20% (40% for Women/SC/ST/disabled entrepreneurs) of project/production cost for animation films/ cartoon series/games produced in Odisha subject to 80% of animation film/series/game production happening in Odisha using local people. This incentive is limited to Rs. 10 lakhs per film per year. Women/SC/ST and disabled entrepreneurs will get additional subsidy of Rs. 5 lakhs per film per year.

Lease Rental: Reimbursement of 25% of lease rental charges, limited to Rs. 3 lakhs per year for 3 years. For Women/SC/ST/disabled entrepreneurs, reimbursement will be @ 50% of lease rental charges, limited to Rs. 5 lakhs per year for 3 years.

Stamp Duty: 100% reimbursement of stamp duty, registration fees and transfer duty for first transaction and 50% of second transaction is also allowed.

Recruitment Assistance: Assistance of Rs. 15 lakhs for employing minimum 80 people within 2 years of operation with a condition that 50% recruitment is of Odisha domicile people.

Marketing Assistance: 50% reimbursement (100% for Women/SC/ST/disabled entrepreneurs) of cost incurred for participating in national exhibition/trade event or promotion events capped at 1.5 lakh per year . Such incentive can be claimed maximum 3 times during the policy period per company for participating in events.

Quality Certification: Reimbursement of 20% expenses (40% for Women/ST/SC/disabled entrepreneurs) incurred towards compulsory marketing/quality certificates. This incentive is limited to maximum Rs. 4 lakhs per unit

Bandwidth Connectivity Charges: Reimbursement of Internet bandwidth charges up to 1.5 lakhs per year for a period of 3 years

Large and Mega Projects

Special package on a one-on-one basis

Lease Rentals
  • Eligible IT units hiring buildings on rent for operating their centers employing above 40 employees for its main economic activity(core operations)will be entitled for a subsidy of 75% of the actual rent paid or Rs. 20 per sq. ft. per month whichever is lower
  • The overall limit of this subsidy shall be limited to Rs. 12 lakhs per annum. The reimbursement of carpet area occupied by the unit is limited to 50 Sq. ft. per employee.
  • An additional 25% lease rental limited to 5 lakhs per annum during the policy period will be provided to women, SC/ST and disabled Entrepreneurs.
Incubation Rentals
  • IT units with up to 40 employees will get a subsidy on the rental of Incubation Space (without O & M) for a maximum of 3 years as follows on reimbursement basis on fulfillment of minimum new employment in core area.
  • A rental reimbursement @ Rs. 20 per Sqft. per month or 75% of the actual rent paid, whichever is less, will be available for incubation space taken on lease or rent basis in notified private IT tower/Space at the scale of 30 Sqft. carpet area per employee.
  • The below Subsidy will be applicable in all Government owned facilities as well as designated IT Parks & Incubation Centers approved by Government.
    Category Incentive
    Up to 300 Sqft (min. 10 employees) 80% subsidy
    301-600 Sqft (min. 20 employees) 70% subsidy
    601-1000 Sqft (min. 40 employees) 60% subsidy
  • Reimbursement up to Rs. 1000/- per seat per month for Co-working space in notified private IT Park/IT Space will also be available and 1400/- per seat per month in all Government owned facilities as well as designated IT Parks & Incubation Centers approved by Government.
Specific Incentives for IT Parks
  • Capital subsidy @ 25% of fixed capital investment in buildings and infrastructure facilities, excluding the cost of land, subject to a ceiling of Rs. 20 crores.
  • Such parks shall have at least 60% of the built-up area dedicated for IT units.
  • Within this, 10% shall be earmarked as furnished space for allocation as Plug & Play incubation & co-working space to start-ups & ideates. The balance area may be used for supporting infrastructure such as canteen/food courts, recreational facilities, fitness centers and crèches etc.
  • To support such projects, reimbursement of SGST on machines, equipment, capital goods and construction material procured for implementation of above project, for a period of three years or till the date of completion of the project, whichever is earlier shall be granted.
  • The Government shall reimburse 15% of the cost of developing solar power plant subject to maximum of Rs. 25 lakhs. Also, Greenfield IT Parks shall be eligible of 100% reimbursement of stamp Duty/ Registration Fee/ Conversion Fee.