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May 18, 1999


Andhra Pradesh announces more incentive for IT

Email this page to a friend. The Andhra Pradesh government has announced a special incentive package for the IT sector with emphasis on IT-enabled services.

This package would be initially applicable for three years and subject to review thereafter.

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Revenue Minister Devender Goud has said that the state cabinet, which met recently, cleared the new policy initiatives, keeping in view the fact that Andhra Pradesh, and particularly Hyderabad, are becoming a favoured destination for the IT industry.

The government has identified IT enabled services or 'remote services' as a growth area.

It has estimated that in 1998, this segment generated more than Rs 9.8 billion in revenues in India and it is estimated that by 2008, the ITES industry in India would generate annual revenues of $20 billion (Rs 850 billion) leading to opportunities for more than 10,000 full-fledged units.

The state cabinet has approved that:

  • IT infrastructure and services industry is exempted from the purview of the AP Pollution Control Act except in respect of power generation plants.
  • Industrial power tariff and all other admissible incentives and concessions applicable to industries in respect of power shall be applicable to the IT infrastructure and services industry.
  • This sector is exempted from zoning regulations for purposes of location.
  • It has been agreed in principle to simplify the compliance procedures through self-certification, or exemption, wherever possible, for the IT services industry from the provisions of various regulatory acts and rules.
  • General permission has been given to the IT sector to run a three-shift operation.
  • Incentives applicable to industries under the Target 2000 Scheme would be extended to the IT industry.
  • Rebate on cost of land allotted to IT services companies at Rs 20,000 per job created is subject to the following conditions:
    1. The rebate shall be applicable only in respect of lands allotted by the government or the APIIC with and shall be restricted to Rs 20,000 per job created or the cost of the bare land, excluding development cost, subject to a ceiling of 3 acres per 1,000 jobs created. On areas in excess of this limit, no concessions would be applicable.
    2. The minimum number of employees to be hired by a company in order to avail itself of the concessions on land cost shall be 100, corresponding to a ceiling of 30 cents.
    3. The period for which such employment would have to be sustained shall be two years. The concessions linked to employment generation will be limited to the extent of the number of persons of Andhra Pradesh origin employed by the company.
    4. In the case of IT infrastructure and services companies that establish facilities on private lands, concessions will be given in the form of rebates on registration and transfer of property charges and exemption from stamp duty on a tapering scale for sale or lease of built-up space.
  • For facilities established and sold or leased before April 1, 2000, 90 per cent rebate is to be given. For facilities established and sold or leased on or after April 1, 2000 but before April 1, 2001, 70 per cent rebate will be offered and thereafter for facilities set up before March 31, 2002, 50 per cent rebate can be claimed.

These concession would be available for IT parks notified by the Department of Information Technology which provides certain minimum facilities such as uninterrupted / backup power, reliable telecom links etc.

The rebate would be applicable to the combined levy of registration fee, stamp duty and transfer of property duty and no total exemption of stamp duty would be entertained.

These concessions would be available only for the first transaction, when the IT industry is first established and full levy would be applicable for subsequent transactions.

For IT infrastructure companies establishing facilities on private lands outside the limits of the municipal corporations and the nine municipalities of Hyderabad and Gaddiannaram village, relaxation of FAR to the extent of 50 per cent of the prevailing norm will be available.

The state government has drawn plans to encourage establishment of IT parks in district headquarters and will consider providing required telecommunications linkage through the AP State Wide Area Network to such IT parks.

This will enable APSWAN to meet one of its objectives of serving as a highway for jobs to percolate into the state.

- Compiled from the Indian media

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