Andhra Pradesh Innovation and Startup Policy

The State of Andhra Pradesh requires world-class scientific and technologically-advanced ecosystems that could empower and enable its youth to carry out the fundamental duties for the country. For the development of innovation, entrepreneurship and startup culture within the State, the Government of Andhra Pradesh has proposed to set up a mission for Innovation and Capacity Building. This Mission has helped formulate the Andhra Pradesh Innovation and Startup Policy which is based on Shared Infrastructure, Incubators/ Accelerators, Human Capital, Funding and the most important of all, a system of Good Governance. This article talks about the various aspects of the Andhra Pradesh Innovation and Startup Policy.

Vision of the Policy

The Vision of the Andhra Pradesh Innovation and Startup Policy is as follows:

" To create a world-class ‘technology startup ecosystem’ by fostering ‘entrepreneurship and a culture of innovation’ which contributes to increased knowledge, wealth and employment in our society. "

Targets of the Policy

Andhra Pradesh strives to achieve their collective dream of a new India where a new generation of software products would be manufactured and thereby, would create multiple effects in the growth of the State and the Nation along with employment creation and social transformation. Through this Policy, the Government hopes to create an ecosystem that brings up an entrepreneur in almost every other family. The following are the targets that the Government aims to cross off through this Policy.

100 Incubators/ Accelerators to be established.
1 million sq. ft. of Incubation Space to be developed.
5,000 Companies & Startups to be incubated.
Venture Capital of INR 1000 Crores to be mobilised for Innovation.
To create at least one billion dollar technology startup that is home-grown.
Foster Innovation Culture among the youth of the State.

State Support

The Non-Fiscal and Fiscal incentives applicable to every category of the IT industry would also be relevant to the incubators, accelerators and startups. Along with this, the following would be offered.

Non-Fiscal Incentives

The following are the Non-Fiscal Incentives that are offered by the Government to various startups.

An effective Single-Window System: A highly powered Single Window Clearance Unite would be created and operationalised for granting various approvals and clearances to first time and young entrepreneurs.
Special provisions for Startups: Allocation of spaces would be offered to incubators and startups on the basis of priority.
Awards for Innovation: The Government encourages innovation among young entrepreneurs through the Innovation Awards.
Cloud Server: The Government offers to host a cloud server that could connect every incubation centre in the State of Andhra Pradesh.
Enterprise Software and Device Testing Laborataries: The Government has offered to procure Enterprise versions of critical software that is essential for testing and other purposes at an incubator.
MIT FAB Laborataries: A high-end FABLAB from MIT, Boston, USA would be set up at a Pilot Incubator to promote education in hardware manufacturing and developing prototypes of hardware products.

Fiscal Incentives

The following are the Fiscal Incentives that are offered by the Government to various startups.

Registration & Stamp Duty: Startups would be eligible for 100% reimbursement of Stamp Duty, Transfer Duty and the Registration Fee paid on the sale or lease deeds on the initial transaction and 50% for the second transaction.
Power Subsidy:
- Startups would be eligible for 25% subsidy on electricity bills for INR 30 Lakhs or 3 years from the commencement date of commercial operations, whichever is earlier.
- Startups established by the SC/ ST and Women Entrepreneurs shall be eligible for 50% subsidy on electricity bills for 5 years from the date of commencement of commercial operations or INR 50 Lakhs, whichever is earlier.
- Electricity Duty Exemption and applicability of Industrial Tariff: New IT/ ITES units would be entitled to a complete exemption on Electricity duty for 5 years after coming into commercial operations.
Patent Filing Cost: The expenses for filing patents would be reimbursed to the startups in Andhra Pradesh with a limit of INR 5 Lakhs per domestic patent and INR 10 Lakh for an international patent.
Quality Certification: Startup units would be eligible for reimbursement of 20% of expenses incurred for obtaining quality certifications for CMM Level 2 onwards with a limit of INR 5 Lakh.
Technology & Market Support: Government would support IT Exporters Associations, ITsAP, NASSCOM, ELIAP, STPI, IEG, or any such organisation for conducting surveys and research on trends in technology, market intelligence and on other work essential to the IT Industry.
Business Networking and Promotional Events: The Government promotes and encourages participation in various national and international events by the industry and by leading a Government-industry business delegation to identified Exhibitions and Conferences.
A 50% subsidy on lease rentals with a limit of INR 5 Lakhs per annum for 3 years for any "plug and play" built-up office space occupied by start-ups, MSMEs, first-generation technocrat entrepreneurs, ST, SC & women entrepreneurs in IT, Multi-purpose SEZs, IT Parks or in any notified private location.
Market Development: 50% reimbursement of the rental cost for the exhibition stall for participating in notified national or international exhibitions limited to a space of 9 Sq. Mt.
Recruitment or Training Assistance: Assistance at the cost of INR 20,000 for a single IT professional employed within two years of establishing the startup unit.
Every turnkey projects with an outlay of up to INR 5 Crores, to be undertaken by Government Departments, would be reserved for every MSMEs registered and operating in the State of Andhra Pradesh.
Performance-linked Grants: MSMEs and startups that record a year-on-year growth rate of 15%, according to the audited accounts, would be eligible to receive a grant of 5% on the Turnover.
The Official Government Portal of Andhra Pradesh has published a Blueprint for the development of IT, Electronics and e-Governance sectors. Suo moto proposals, based on the AP Blueprint for applications relevant to the needs of the Government would be accepted from an AP-based MSME IT or startup units. The best proposals among those found to be appropriate for achieving the goals set out in the blueprint would be accepted, and the selected IT units, and startups would be awarded INR 50 Crores per annum.
Subsidy on Bandwidth for Internet Connectivity: A 20% subsidy on the bandwidth for internet connectivity paid to an Internet Service Provider (ISP) would be available for a period of two years from the date of starting commercial production or operation.

Governance of the Innovation Policy

APInC: The empowered ‘Andhra Pradesh Innovation Council (APInC)’ has been formed with the various representatives of the industry, incubators and the other stakeholders. APInC would be in charge to administer the incentives in a speedy, time-bound and transparent manner.
Empowered Mission for Innovation & Capacity Building: An empowered Mission has been established for the development of the sector and to take agile and faster decisions. The mission is headed by a Technocrat who has a record of promoting innovation in areas related to technology. It would comprise of 3 experts, one each in e-Governance, Electronics and IT along with 3 academicians and representatives each of the Industry.

Company Registration

OPC Registration