The Kerala government has released the draft Information Technology Policy 2023 proposing several incentives to spur further growth in the sector, promote private IT parks and to transform the State into an inclusive knowledge society. The policy sets a target for the State to garner 10% of the IT and electronics industry market share of the country in the next 5 years and making a push in the space industries sector with a specialised park.
As per the policy, private IT parks will be encouraged and the current incentives of the IT parks will be extended to these by way of affiliations. In the four IT development corridors to be identified by the government, any private building with an IT seating capacity of 1,000 or more will be deemed as a private IT park and will enjoy all privileges available for units with the government IT park. To encourage more private developers, the government will provide up to 50% reimbursement of land tax for a period of 5 years for private IT parks and co-developers.
Land-pooling mechanism
One of the novel initiatives proposed is the land-pooling mechanism, in which groups of landowners pool their land and hand it over to a government agency for leasing to private investors for the development of IT infrastructure projects. It is aimed at saving the time involved in the traditional land acquisition process. After the development of the pooled land, the agency will reapportion the land to the landowners after deducting some portion as compensation towards infrastructure cost and development cost. The primary benefit of the land pooling policy is that the ownership remains with the original titleholder. It reduces the chances of legal disputes and compensation disbursements.
To support large-scale co-developers to set up facilities within the IT parks or land owned by government agencies, the Government will provide encumbrance-free land with a phased payment option for the land owned by the Government. All recognised IT spaces will be treated as deemed IT parks with various incentives. All companies operating out of IT parks should have a single window clearance with the respective park centre as the touch point. All engagement with external agencies like the following will be done through this central mechanism.
An IT/ITES organisation with 25 employees or more operating from a leased built-up space in a government-owned IT Park, can claim salary reimbursement as a rent discount, 5% of the monthly rent, maximum up to ₹15,000/month, for one year for providing permanent employment to transgender persons in the campus. Similar financial aid is applicable for neurodivergent and people with disabilities. Organisations with 50% or more women employees working from the campus, will be eligible for 10% discount on base rent, for a period of 12 months.
All the incentives applicable as per the State Industrial Policy approved in March 2023 will be extended to companies in the KSPACE space park. The new Digital Transformation Mission announced as part of the policy will design and implement specific programmes in different sectors and vocations to enable their digital transformation.
The draft policy makes the admission that Kerala could not gain much from the information technology industry growth in the country and that the State’s share of the industry is abysmally low when compared to its immediate neighbours. One of the key targets for the next decade is to address this. The policy views the trend towards decentralised development in IT as against centralised parks to be a major advantage for the State which has an urban continuum throughout the State with good civil facilities and with the State already having kick-started work near home initiative.
An exclusive Electronic Industry policy for the development of the Electronics Industry will be released separately.
