Maharashtra, the economic powerhouse of India, has been a trailblazer in embracing technology and driving digital transformation across various sectors. With Mumbai already being termed as the entertainment and financial capital of the Country, the state cabinet recently approved the IT-ITES (Information Technology and Information Technology Enabled Services) 2023 policy, which is a significant contributor to its economic growth and employment generation. This comprehensive policy aims to propel the IT-ITES sector to new heights by fostering innovation, empowering entrepreneurs, and creating an enabling environment for businesses to thrive. The policy presents several opportunities for growth, especially in the tech (gaming, animation, visual effects), manufacturing and logistics sectors by increasing automation and harnessing the power of technology to its full potential.
In this article, we will delve deeper into the key highlights of the policy and explore its broader implications on the state's IT-ITES landscape.
Promoting Startups and Innovation
The policy's first pillar is to promote startups and drive innovation across the state. Maharashtra has already witnessed the rise of several successful startups, and the government seeks to nurture this vibrant entrepreneurial ecosystem further. With this new policy, IT companies will have the freedom to establish various “tech parks” and will receive various subsidies including waiving off of stamp duty (ranging from 50-100%) and electricity charges (ranging from a period of 10-15 years). Furthermore, Maharashtra Hub (“M-Hub”) is proposed to be set up, to provide financial support to start-ups. The Chief Operating Officer (COO) of M-Hub will be appointed as the technology ambassador of Maharashtra to drive growth and innovation.
Specialized incubation centers will be established in major cities, including Mumbai, Pune, and Nagpur, to provide startups with a growth-centric environment. These centers will offer mentorship, access to funding, and networking opportunities, enabling young entrepreneurs to transform their groundbreaking ideas into commercially viable products and services, without the years of struggle to find an entry into the market. By fostering a culture of innovation, the policy aims to position Maharashtra as a global financial hub.
Skill Development and Human Capital
The success of the IT-ITES industry largely depends on a skilled and adaptable workforce. The Maharashtra IT-ITES Policy 2023 recognizes this and lays considerable emphasis on skill development initiatives. As per the policy, there will be up to 25% of fee reimbursement of online courses and programs for “super specialized courses.”
Furthermore, a “talent launchpad” will be created to support young entrepreneurs and provide courses and conduct competitions across schools and colleges for skill development. M-hub, in collaboration with prominent organizations such as NASSCOM, Gaming Developers and Associations, Animation Society, Maharashtra State Innovation Society, and others, will host annual events and competitions. These events include FICCI FRAMES & Best Animated Frames Awards in Mumbai, NASSCOM's Game Developers Conference in Pune, The Animation Society of India's Anifest in Mumbai, ASIFA's World Animation Day celebrated on the 28th of October across India, MCCIA's Digital Content Conference in Pune, and NTLF - NASSCOM Technology Leadership Forum. The State will extend financial support of Rs 20 Lakh for each of these events and competitions every year, fostering growth and innovation in the relevant industries and promoting collaborative initiatives in the region.
The Maharashtra IT-ITES Policy 2023 encourages IT-ITES companies to invest in research and development (R&D) activities. The government will collaborate with leading academic institutions to establish innovation labs and research centers focused on emerging technologies such as Artificial Intelligence, Blockchain, and Internet of Things. These centers will not only enhance the state's technological capabilities but also attract global companies seeking to leverage research and development resources for their business growth.
These measures will ensure that the workforce is equipped with the latest technological advancements and industry-relevant skills, enhancing employability and attracting global companies looking for top-tier talent.
Infrastructure Development
To attract investments and facilitate seamless business operations, the policy outlines an ambitious plan for infrastructure development. The government intends to establish state-of-the-art IT parks and technology hubs in strategic locations across Maharashtra. These centers will offer world-class amenities, cutting-edge technology infrastructure, and a plug-and-play environment for businesses to set up their operations swiftly. By providing a conducive infrastructure, Maharashtra aims to become a preferred destination for both domestic and foreign IT-ITES companies, driving economic growth and generating employment opportunities.
Several benefits have been provided to entities in the IT parks that will be created as part of the new policy; such as:
(i) Increased Floor-Space Index (FSI) limit would be provided to all IT parks, as compliant with the Development Control Regulations;
(ii) The Policy proposes the creation of an Integrated Information Technology Township wherein the minimum area to be notified has been decreased from 25 to 10 acres with reduced restrictions on terms of usage as compared to the 2015 IT-ITES policy;
(iii) The state will set up a Center of Excellence (COE) which would comprise industry experts, government officials and celebrated individuals from various academic fields to further foster the ecosystem.
(iv) The 2023 Policy has introduced a novel approach to support unregistered IT Parks, partially constructed private IT Parks, or those with expired Letter of Intent (LOI). It involves obtaining a de-novo LOI, streamlining the approval process for such cases.
Ease of doing business and additional support
To shift the focus on growth of small businesses, the state has taken the initiative to streamline and simplify the approval process for such businesses and provide additional support for the growth of MSMEs. The Government has created an integrated portal called the “Mahiti” portal which would help simplify the process by providing the following services on a single platform: registration and application for IT & ITES parks, units and data centers; applications for LOI and de-novo letter, information on 2023 Policy and subsequent government resolutions of the 2023 Policy, applications for incentives to be availed under the 2023 Policy. Furthermore, IT industry would be granted a continuous industry status, allowing them to work on all days of the year without any restrictions. The government of Maharashtra has allocated INR 5 billion for the growth of micro, small and medium businesses, startups and incubations centers.
Creation of Data Centers
To further promote the growth of technology, the IT-ITES policy of 2023 provides for various fiscal exemptions and incentives for data centers, which will be at the heart of this new financial hub. Along with stamp duty exemptions and waiving off of electricity charges, the 2023 Policy grants infrastructure status to data centers on par with sectors such as railways, roadways, and power in order to make them eligible for various benefits; including taking of long-term credit from lenders for sustainable growth. The data centers state will be exempted from the standard parking norms, eligible units can avail of renewable energy under open access and develop captive power plants for data centers.
The policy acknowledges the significance of safeguarding sensitive data and ensuring a strong cybersecurity infrastructure as well.
Our Perspective
The Maharashtra IT-ITES Policy 2023 is a well-crafted roadmap to position the state as a global technology and innovation hub. The vision behind this policy, as per the Maharashtra Industry, Trade and Investment Facilitation Cell is to make Maharashtra a “global destination” for investments and the “Technology Capital of India,” and this policy is the step in the right direction to achieve exactly that. By promoting startups, investing in skill development, providing world-class infrastructure, and offering attractive incentives, Maharashtra is moving towards innovative, equitable, inclusive and sustainable Technology Development. This policy is a highly celebrated one for the Tech industry and will propel various sectors such as AVGC (Animation, Visuals, Gaming and Comics) to new heights. The policy places great importance on secure and sustainable growth of MSMEs, start-ups and new-age business models that have taken the country over by a storm- ringing in a new era for the Indian economy.