The 2023 policy introduces several fiscal incentives and exemptions aimed at promoting data centres.
the formulation of an Information Technology and Information Technology Enabled Services Policy in 1998, subsequently amending it in the years 2003, 2009 and 2015. The Government of Maharashtra introduced the Maharashtra State-2023 Information Technology and Information Technology Enabled Services Policy on 27 June 2023, superseding the 2015 policy.
This initiative aims to position Maharashtra as a global destination for IT and ITES, aspiring to become India’s technology capital. Effective from 27 June 2023, the 2023 policy remains valid for five years or until replaced by a new policy. This 2023 policy introduces several fiscal incentives and exemptions aimed at promoting data centres, including: (a) 100% stamp duty exemption for acquiring land/ premises for new data centres and expansions, as well as related transactions like hypothecation and lease agreements; (b) permanent exemption from electricity duty for both new and existing registered data centre units; (c) extension of power tariff subsidy from three to five years at INR 1 per unit for new data centre units outside Zone- I; (d) implementation of a dial-before-dig policy to safeguard underground network infrastructure; and (e) granting infrastructure status to data centres, aligning them with sectors like railways and power, facilitating access to longterm credit from financial institutions.
The 2023 policy’s comprehensive support for data centres through fiscal incentives, electricity duty exemptions, extended power tariff subsidies, infrastructure status and protective measures like the dial-before-dig policy underscores the government’s commitment to fostering a conducive environment for the growth and development of the data centre industry in Maharashtra.
These initiatives not only encourage investment and expansion but also ensure the safety and efficiency of data centre operations, positioning the state as a preferred destination for data centre establishments and driving technological advancement and economic growth. Establishment of Integrated Information Technology Township (IITT) under the 2023 policy entails reducing the minimum area requirement from 25 acres to 10 acres of contiguous land. Additionally, the allocation of land use under the new policy designates 50% for IT/ ITES activities and 50% for unrestricted use, contrasting with the previous 2015 Policy, which allotted 60% for IT/ITES and 40% for support services and other commercial endeavors.
The completion timeframe for IITT projects is set at 7 ½ years for areas between 10 and 25 acres, and 10 years for areas exceeding 25 acres, with the possibility of extension contingent upon approval by the Committee established under the 2023 policy. Another primary feature of the 2023 policy extends beyond mere infrastructure development to fostering economic expansion. With a goal of attracting investments totaling Rs 95,000 crore, the policy aims to generate 3.5 million jobs and propel exports valued at Rs 10 lakh crore.
Such significant economic activity is anticipated to profoundly impact both commercial and residential real estate sectors. Moreover, as tech professionals migrate to Maharashtra for employment prospects, the demand for residential properties is expected to surge, particularly in close proximity to major IT hubs.
The policy effectively addresses the imperative of uninterrupted IT operations. By granting the IT industry a “continuous industry status,” operations can run seamlessly round the clock, 365 days a year, ensuring a stable working environment. Additionally, IT services have been accorded essential services status, guaranteeing industry stability and reliability. This move is poised to mitigate uncertainty and stimulate real estate development, particularly in regions housing data centres and IT firms.
In conclusion, the 2023 policy has undergone significant refinement to align with global growth trends and the vision of the Maharashtra government, aimed at enhancing the performance of the IT/ITES sector. The strategic initiatives outlined in the policy, such as the implementation of a unified single window system, the decentralization of IT/ITES segments across Maharashtra, the allocation of additional FSI for IT Parks, and the provision of fiscal and non-fiscal incentives to IT/ITES units and data centres, are poised to establish Maharashtra as the preeminent technology hub of India.
Khushbu Jain is a practicing advocate in the Supreme Court and founding partner of the law firm, Ark Legal. She can be contacted on X: @ advocatekhushbu