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Policy 2023 introduces several financial incentives and exemptions aimed at promoting data center development.
The Service Policy for Information Technology and Information Technology Support was established in 1998 and subsequently revised in 2003, 2009 and 2015. The Maharashtra government launched the Maharashtra Information Technology and Information Technology Support Services Policy 2023 on June 27, 2023, replacing the 2015 policy.
The initiative aims to position Maharashtra as a global destination for IT and ITES and aspire to become the technology capital of India. The 2023 policy will be effective for five years from June 27, 2023, or until replaced by a new policy. This 2023 policy introduces a number of financial incentives and exemptions aimed at promoting data center development, including: (a) 100 for the purchase of land/site for new data centers and expansions and related transactions such as pledges and lease agreements % stamp duty exemption; (b) Permanently exempt new and existing registered data center units from electricity tax; (c) For new data center units outside Zone I, extend the electricity price subsidy from three to five years at a rate of 1 per unit Indian rupee; (d) Implement dial-first, dig-later policy to protect underground network infrastructure; (e) Grant data center infrastructure status in line with sectors such as railways and power to facilitate access to long-term credit from financial institutions.
The 2023 Policy provides comprehensive support for data centers through protective measures such as financial incentives, electricity tariff exemptions, extended electricity price subsidies, infrastructure status, and the allocate-before-dig policy, highlighting the government’s commitment to creating a conducive environment for the growth and development of data centers. Commitment. Data center industry in Maharashtra.
These measures not only encourage investment and expansion, but also ensure the safety and efficiency of data center operations, making the state a preferred destination for data center construction and driving technological advancement and economic growth. Establishment of Integrated IT Township (IITT) under Policy 2023 requires reducing the minimum area requirement of contiguous land from 25 acres to 10 acres. Furthermore, the land use allocation under the new policy earmarks 50% for IT/ITES activities and 50% for unrestricted use, as compared to the previous 2015 policy which allocated 60% for IT/ITES and 40% for support services and Other business endeavors.
The completion time frame of the IITT project has been set at 7.5 years for areas of 10 to 25 acres and 10 years for areas above 25 acres, with the possibility of extension based on the approval of the committee set up under the Policy 2023 . Another key feature of Policy 2023 goes beyond mere infrastructure development and also extends to promoting economic expansion. The policy aims to attract investments totaling Rs 95,000 crore, create 3.5 million jobs and boost exports worth Rs 1,000 crore.
Such significant economic activity is expected to have a profound impact on the commercial and residential real estate industries. Additionally, as technology professionals migrate to Maharashtra for job prospects, demand for residential properties is expected to surge, especially in areas close to major IT hubs.
This policy effectively addresses the need for uninterrupted IT operations. By granting “Sustained Industrial Status” to the IT industry, operations can run seamlessly 24/7, 365 days a year, ensuring a stable working environment. In addition, IT services have been granted basic service status, ensuring the stability and reliability of the industry. The move is aimed at easing uncertainty and stimulating real estate development, especially in areas where data centers and IT companies are located.
In summary, the Policy 2023 has been significantly improved in line with global growth trends and the vision of the Maharashtra government to improve the performance of the IT/ITES industry. Strategic initiatives outlined in the policy such as implementation of unified single window system, decentralization of IT/ITES units across Maharashtra, allocation of additional FSI for IT parks, and provision of financial and non-financial incentives for IT/ITES Units and data centers are poised to make Maharashtra a technological hub of excellence in India.
Khushbu Jain is a practicing lawyer of the Supreme Court and a founding partner of Ark Legal. She can be reached via X: @ Advocatekhushbu
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