In a move set to transform the technology landscape of Uttar Pradesh, the state government has officially granted ‘Industry’ status to the Information Technology (IT) and IT-enabled Services (ITES) sectors. This historic approval for IT Parks announced on October 11, 2024 has potential to fuel growth, investment and set up Uttar Pradesh as a ITcity of North India.
The new policy has been issued by Anil Kumar Sagar who is the principal secretary of industry and it requires all the industrial Development Authorities, power department and the housing and urban planning department to extend industry status to the IT and ITES sectors immediately. It imposes flexible incentives and benefits to technology based companies to improve the environment that the reclassification creates.
Perhaps the greatest opportunity for this new status is the opportunity for IT companies to buy lands from development authorities at industrial prices. This change should particularly benefit tech-savvy Noida as it will enable global IT companies to get cheaper land prices than before. Today, the cost of IT plots in Noida in the institutional segment can be between Rs 26000 to Rs 73120 per sq mtr, and the cost of industrial plots can be between Rs 28000 to Rs 30000 per sq mtr. The new policy will allow IT companies to get all these lower industrial rates, which may help significantly decrease costs.
Moreover, the government has declared new IT/ITES units of 150 kW and above requirements on electricity as industrial powers tariffs. It is expected to give direct savings of roughly Re. ₹1/ unit to the firms intending to avail of this scheme since industrial tariffs are around ₹7 per unit, which is cheaper than the now ₹8.30 per unit paid by information technology companies.
This decision of the Uttar Pradesh government belongs to a greater plan aimed at providing better infrastructure to the state’s IT industry, such as power backup facilities, high-speed internet connectivity, and IT parks. The state is also in the process of minimizing the wait time to get approvals for the acquisitions of land and other incentives to overcome the regulatory hurdles and achieve a reduction in operational costs.
This change in policy has come at a time when the Uttar Pradesh economy is aspiring to touch a $ 1 trillion economy in the next five years. This challenging growth rate has been pegged to the IT sector as a major player towards its realisation. Today the state is among the top six software exporting states in India and this new industry status is likely to give a further fillip to its position in the software industry map of the country.
The IT and ITES industries and sectors of Uttar Pradesh have a diverse cluster of industries comprising software service industries, BPO, KPO, artificial intelligence, software technologies, game industry, animation industry, and so on. It proposes a new policy to nurture and promote growth in this diverse technological spectrum.
Market players have paraded their excitement for the move and majority has left their message of optimism. The new policy will be first taken to the board of the Noida Authority for necessary approval before being put into practise, as per the words of its CEO Lokesh M, who spoke enthusiastically about a swift move to implementing this decision.
The latest step of the government toward according industry status to IT and ITES sectors is bound to set very significant impact of the economy of the state. It is probable to generate more local and international investment, generate employment, and foster general development in the region. This policy is also expected to help spur the development of new small to mediums IT firms as the state nurtures innovative businesses.
Nevertheless, the outcome of this kind of initiative will depend on how it has been implemented and on the government’s response to the possible obstacles. Some of them include developments such as infrastructure, skill, and appropriate industrialization, as well as environmental effects, which will require proper strategic planning.
While Uttar Pradesh moves on this new era towards the development of more significant technology, the entire nation and especially the global tech community, will be watching closely. The state’s opportunity to capitalize on this new status and replicate the environment that fosters the creation of a healthy IT market might well serve as a reference point for other rates aspiring to do the same.
This audacious move places Uttar Pradesh on the right side of history as the state looks to play a part in shaping the digital future of India. Over the next few years, the growth will only intensify as more and more companies test the policy and start realizing its benefits, leading to a sea change in the state’s technology scenario in the coming years’ IT map of North India.
