Himachal Pradesh IT and ESDM Policy 2019

The Department of Information Technology, Government of Himachal Pradesh, has launched the IT, ITeS and ESDM Policy in 2019. The policy enables a competitive environment for setting IT, ITeS and ESDM (Electronics System Design and Manufacturing) organisations and generates more employment through entrepreneurship in the state.

Objectives

The objective of the policy is to:

Transform the State of Himachal Pradesh as a front runner destination for IT, ITeS and ESDM companies
Set up all the infrastructure facilities required to build the IT, ITeS and ESDM companies in the State
Establish an organisational arrangement in the State to strengthen the skilled manpower resources
Encourage and support Micro, Small and Medium Entrepreneurs in the state to participate in the field of IT, ITeS and ESDM sector
Develop a framework with backend automation to strengthen the business process
Establish a favourable environment by guaranteeing digital services delivered within a specified time framework
Improve the overall socio-economic growth of in the state
Concentrate on the long-term development of technology and innovation
Generate more employment opportunities and encourage entrepreneurship in the State

Eligibility Criteria

The entrepreneurs who are setting up business activities in the field of IT, ITeS and ESDM sector, they can claim financial assistance during the period of five years from the date of implementation on incentives and other concessions on the products/services. The eligibility criteria are as follows:

They should possess a minimum qualification of bachelor’s degree or below
They should employ a minimum of 80% of Himachali Bonafides
They should employ a minimum of 5 labours either on a daily, regular or contractual basis at the time of commencement of commercial production in the States
Enterprises embarking on Substantial Expansion with the minimum 25% of their FCI can also apply for the benefits under the scheme
They should stick to the rules and regulations established by the Department and clear all the outstanding dues in the Department
They should hold an authorised Udyog Aadhaar Memorandum/Entrepreneur Memorandum/Commencement of Commercial Production Certificate and should submit the same to the Department

Benefits

The Department of Information and Technology, Government of Himachal Pradesh is disbursing subsidies and benefits as a motivation for the entrepreneurs to establish Information Technology (IT), Information Technology enabled Services (ITeS), Electronics System Device and Manufacturing (ESDM) industries and Green Data Centers in the State. Some of them are as follows:

Subsidy for the preparation of Detailed Project Reports (DPR)
- The 50% of the total cost borne by the entrepreneurs for the preparation of the Detailed Project Report (DPR), certification of the Technical Civil Works or investment made for the procurement of the mandatory plant and machinery can be reimbursed under the policy.
- The claim amount is limited to the maximum ceiling of Rs.1 Lakh and can be availed after the initiation of commercial production.
Lease Rental Subsidy
- The entrepreneurs who are setting up operations for the IT, ITeS enterprises in the IT, Multi-purpose SEZs, IT Parks, Designated Tech Parks, can claim the lease rental subsidy of 75% for the first year, 50% for the second year and 25% for the third, fourth and fifth year from the date of initiation of the production.
- The maximum ceiling amount is Rs.15 Lakhs for the first year, Rs.10 Lakhs for the second year and Rs.5 Lakhs for the third, fourth and fifth years.
- Entrepreneurs who are setting up operations for the ESDM and Green Centers in IT/Multi- purpose SEZs, IT Parks, Designated Tech Parks etc., can claim the lease rental subsidy of 85% for the first year, 60% for the second year and 35% for the third, fourth and fifth year from the date of launch of commercial operations.
- The maximum ceiling amount is Rs.20 Lakhs for the first year, Rs.15 Lakhs for the second year and Rs.10 Lakhs for the third, fourth and fifth years.
Capital Subsidy
- Entrepreneurs who are setting up operations in IT/ITeS sectors can claim the capital subsidy for the Fixed Capital Investment of 25% from the date of inauguration of the commercial operations.
- The maximum amount that can be availed is Rs.1 Crore and the cost of land is not included in the capital subsidy.
- Entrepreneurs who are setting up operations in the ESDM industry and Green Data Centers can claim the capital subsidy for the Fixed Capital Investment of 50% from the date of inauguration of the commercial operations.
- The maximum amount that can be availed is Rs.2 Crores and the cost of land is not included in the capital subsidy.
Waiver from the payment of stamp duty and registration fee
Eligible entrepreneurs can avail a complete waiver from the payment of Stamp Duty, and Registration Fee levied on the Instrument of Conveyance Deed or Lease Deed once the commercial operations are begun.
Exemption from Land use Fee
- The eligible entrepreneurs can opt for the exemption from the payment of change in land use fee charged under the H.P. Town and Country Planning Act, 1977.
Interest Subvention
- Entrepreneurs who are setting up operations in IT/ITeS enterprises are eligible for the interest subvention of 5% on the term loan or maximum ceiling of Rs.25 Lakhs per year for the duration of 5 years.
- Entrepreneurs who are setting up operations in ESDM and Green Data Centers are eligible for the interest subvention of 5% on the term loan or maximum ceiling of Rs.30 Lakhs per year for the duration of 5 years on the following conditions.
- Interest Subvention would be calculated from the date of release of the first instalment of the term loan
- It would be calculated on the simple rate of interest
- It would be paid directly to the Financial Institutions/Banks
- It would be counted on a half-yearly basis after the initiation of commercial operation
- It is permissible for the enterprises for the duration for which it has not evaded the loan repayment and period of default would be included in the admissible duration.
SGST refund
- Entrepreneurs can reimburse 100% of the Net SGST paid to the State Government under the H.P. SGST Act, 2007, for the duration of 7 years.
- The maximum ceiling is 100% of the Fixed Capital Investment from the date of initiation of the commercial operation.
Incentive for Patent Filing
- The expenses borne by the entrepreneurs for the payment of patent attorneys, domestic patent service centres and domestic patent fillings can be claimed under the policy.
- The maximum ceiling is of Rs.5 Lakhs or 75% of the total expenses incurred or for the maximum of 5 domestic patents.
- The reimbursement amount varies to Rs.10 Lakhs or 100% of the total expenses incurred or for the maximum of 5 international patents.
Disbursement for Environment Protection
- The entrepreneurs can claim 25% of the charges incurred for the procurement of plant and machinery for the establishment of the Effluent Treatment Plant (ETP) and rainwater harvesting systems.
- The maximum ceiling of Rs.3 Lakhs, excluding the cost of construction, can be reimbursed after the initiation of commercial operations.
- The entrepreneurs can claim 50% of the charges incurred for the functioning of ETP and rainwater harvesting systems for the period of 4 years.
The maximum ceiling of Rs.1 Lakh per year is released depending upon the reading of the installed meters.
Support for Quality Certification
- Entrepreneurs can reimburse 50% of the expenses incurred for attaining the certification of ISO 9001 or any other equivalent certifications for their enterprises involved in the operations of IT, ITeS, ESDM and Green Data Centers. The maximum ceiling is of Rs.7 Lakhs per enterprise.
Market Development Assistance
- Entrepreneurs can claim as an incentive for 50% of the expenses spent on:
  - Total rent of stall
  - Cash paid to the organiser for the establishment of the stall
  - Product literature/catalogue
  - Display materials created for the participation of International Trade Fairs.
The maximum ceiling amount is Rs.5 Lakhs per enterprise and can be claimed twice during the policy period.
Establishment of Incubation Centers for IT, ITeS and ESDM Sectors
- The Department of Information and Technology encourages new and already existing entrepreneurs to set up incubation centres in the State to strengthen the growth of entrepreneurship. The financial assistance would be provided to the entrepreneurs as per norms mentioned in the Chief Minister Projects/Innovation Projects/New Industrial Scheme.
Disbursement for Transportation of Plant and Machinery
- 50% of the cost spent on the inland carriage and inland transit insurance of plant and machinery can be reimbursed by the entrepreneurs after the initiation of commercial operations. The maximum ceiling amount is Rs.7 Lakhs per enterprise.

Other Benefits

In order to promote and encourage entrepreneurs to invest in IT, ITeS and ESDM sectors in the State, the Government treats such enterprises as Essential Continuous Process and offers several non-fiscal benefits to them. They are,
Land Banks – Government acquires land banks in the selected districts marking it down as IT parks and IT SEZ with all the adequate infrastructure and network.
Local Preference – Government prefers purchase of hardware and software products from the local vendors at the lowest approved rate of 40%, provided the quoted prices of the local vendors are within an array of 5% of the L-1 rates.
Security for Women working in night shifts – Government permits the entrepreneurs to with the general permission of 3 shifts for women to work in the night shifts. The safety arrangements should be organised by entrepreneurs.
Exemption from the inspection – Entrepreneurs get exemption form the inspection of various departments such as Labour Inspection, Factory Inspection and Boilers Inspection.
Relaxation from NOC from Pollution Control Board – Entrepreneurs get relaxation from the Pollution Control Board except for the power generations sets with the capacity of 1000KVA capacity.
Eligible entrepreneurs get clearance by the Government within the stipulated time under the Himachal Pradesh Public Service Guarantee Act, 2011.

- Support for the establishment of Co-working Space
- The State Government establishes instant co-working spaces for entrepreneurs with advanced infrastructure such as video conferencing facilities, common areas, power backup, Wi-Fi, etc., through PPP mode.
- Private organisations can establish co-working spaces on their own, rented or leased land and rent these spaces for IT, ITeS enterprises with the support of State Government.
- Private agencies who are setting up co-working spaces with the minimum land area of 10,000 Sq.ft or have completed at least 3 residential/commercial co-working space with the land area of 20,000 Sq.ft are eligible to obtain fiscal benefits of 50% of the total project cost and the maximum ceiling of Rs.20 Lakhs for the establishment of the below listed space rented.
- 5000 Sq.ft land with STM leased line and minimum of 80 seats in Shimla, Dharamshala and Manali
- 2500 ft of land with 100 MBPS leased line and a minimum of 50 seats in Palampur, Bir, Dalhousie, Kasauli, and other district headquarters excluding Shimla and Dharmashala.
- The leased space would get an incentive of Rs.10 per Sq.ft per month or the maximum ceiling of 25% on the rent paid for 3 years from the date of initiation of the operations.

Contact Details

Department of Information Technology
Government of Himachal Pradesh
IT Bhawan, Mehli, Simla-171009
Phone: +91-177-2628914
E-Mail: dirit-hp@nic.in
Website: http://himachaldit.gov.in

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