Proposed rental subsidy for IT firms meaningless

Lalit Mohan

The Himachal Pradesh Government has announced major incentives to attract information technology (IT) companies. The steps were announced during the Global Investors’ Meet at Dharamsala recently.

The new Information Technology policy proposes lease rental subsidy for IT companies coming to Himachal. The IT enterprises taking space on lease for operations in multipurpose SEZs, IT parks and designated technology parks will be provided a lease rental subsidy of 75 per cent for the first year, 50 per cent for the second year and 25 per cent subsidy for the next three years from the date of the commencement of commercial operations. The subsidy will, however, have the ceiling of Rs 15 lakh for the first year, Rs 10 lakh for the second year and Rs 5 lakh for the next three years.

Green data centres taking space on lease in multipurpose SEZs, IT parks and designated technology parks will get a lease rental subsidy of 85 per cent for the first year, 60 per cent for the second year and 35 per cent for the next three years. Here also, the maximum subsidy has been capped at Rs 20 lakh for the first year, Rs 15 lakh for the second year and Rs 10 lakh for the next three years.

Though the government has announced rental lease subsidy for units in SEZs, IT parks and designated technology parks, the irony is that at present there is no such facility available in the state. The government has proposed to set up two IT parks at Gaggal in Kangra district and Vakanaghat in Shimla district. However, even the land acquisition process for the proposed projects is yet to start.

The previous Chief Minister, Virbhadra Singh, had laid the foundation stone of an IT park in the Jadrangal area of Kangra district. However, now that land has been transferred for Central University Himachal Pradesh.

The delegates from IT companies, who attended the Global Investors’ Meet, had suggested that since there were no designated IT parks in the state the government should allow the rental lease subsidy for any form of building taken on rent by the IT companies. This could help attract many start-up IT enterprises.

The government has also announced that eligible enterprises that bring their businesses to Himachal will be exempted from the payment of stamp duty and registration fee on the instrument of conveyance deed or lease deed.

These enterprises will also be exempted from the payment of the change in land use fee levied under the provisions of the HP Town and Country Planning Act 1977.

Varun Rattan, a Dharamsala resident, has an IT start-up in the town providing jobs to about 200 youths. He says that already many small IT start-up firms have come up in the state and are providing jobs to locals. The government should provide them a platform at the national and international levels to showcase their products and skills so that they can generate more jobs, he adds.

The government has kept a budgetary provision of 3 per cent for e-governance in all its departments. However, experts say that the government should also ease the process for providing land to IT professionals for permanent residence. People running an IT company in Dharamsala say that many professionals are ready to move to Himachal from cities such as Delhi that are getting chocked with pollution. However, the fact that they are not allowed to purchase land in the state serves as a discouragement.