Gujarat unveils new IT policy to generate 1 lakh direct jobs

Chief Minister Bhupendra Patel said the new policy would take the state to “newer heights in IT sector” and will place Gujarat among top five performing states of India in IT sector.

He said the new policy will propel a eight-fold growth in IT exports from Rs 3,101 crore to Rs 25,000 crore. Currently IT exports form about one percent of the total exports from Gujarat.

Jitu Vaghani, State Minister for Science and Technology who accompanied the chief minister later told media persons that Gujarat might have missed the IT bus in the past, but the new policy prepared after studying similar policies of other states, will help attract IT firms from other states to Gujarat.

“Through this policy, we are making a fresh attempt to ride the bus we missed,” Vaghani said.

The policy launched at a formal event at a club in GIFT City in Gandhinagar replaces the 2016-2021 policy that had set an ambitious target to increase exports up to USD two billion (Rs 13,000 crore), IT turnover to USD 15 billion (Rs 75,000 crore) and create 10 lakh direct jobs.

According to office bearers of GESIA IT Association who were present at the launch of new policy, Gujarat had 7,000 IT/ITES firms having a cumulative turnover of Rs 7,000-7,500 crore and an employee strength of two lakh, as on 2019-20.

When asked how many jobs and investments were generated by the last policy, Vaghani said, “I do not want to get involved in politics, but you journalists can research on why Gujarat missed the bus.”

The policy provides support for both capital (CAPEX) and operational (OPEX) expenditures. “This is a unique model that gives flexibility to industries to plan their expenditures and addresses the viability concerns,” said Vijay Nehra, secretary, Science and Technology department while presenting the policy.

According to the official, GIFT City, 5G infrastructure and the government’s Bharat Net initiative for providing broadband connections to rural areas will drive future IT growth in Gujarat.

Under the new policy, the CAPEX support has been raised up to Rs 200 crore from the existing Rs 1 crore, the official said. For capital investments that are less than Rs 250 crore, a 25 percent CAPEX support of a maximum of Rs 50 crore will be provided.

The government has also proposed to provide 15 per cent OPEX support that will range from Rs 20- 40 crore per year for the policy duration of five years.

The policy will also provide an employment generation incentive where a support of up to Rs 50,000 (male employees ) – Rs 60,000 (female employees ) or 50 perc ent of one month’s CTC will be given to the IT firm for hiring and retaining a new local employee for a year.

Apart from this, IT/ITES units will be able to claim reimbusement on employer’s statutory contribution under Employees’ Provident Fund, like they did in the 2016-2021 policy.

The state government will reimburse 100 per cent of EPF amo-unt for female employees and 75 per cent for male employees.

Apart from this, the government is also providing CAPEX support of a maximum of Rs 100 crore for creating IT office space in an IT city or township.

Reacting to the new policy Tapan Ray, MD and Group CEO of GIFT City stated in a release, “the new IT/ITES policy will further accelerate the presence of technology related companies in GIFT City, which is fast becoming a hub for leading IT/ITES companies in the state. It will also boost FinTech and startup activities, giving rise to quality employment opportunities, leading to overall prosperity of the region.”