Andhra Pradesh’s new IT policy incentivises job creation, provides exemptions from laws and boasts several reform measures to woo companies

Chief Minister Y.S. Jagan Mohan Reddy conducting the meeting of the Andhra Pradesh Cabinet at the Secretariat on June 30.

The Andhra Pradesh government unveiled its new ‘AP Information Technology Policy 2021-24’ on June 30. The new policy has several incentives for IT firms to set up companies and envisages the setting up of three different IT concept cities to provide a boost to remote working and plentiful opportunities as part of the gig economy. The policy will come into effect retrospectively from April 1, 2021, and will be in force until March 31, 2024.

The new policy, according to the policy note, envisages the setting up of a comprehensive investment portal to handle project applications, permissions and incentive claims. The policy has several reforms in land allotment, provision of infrastructure and permissions for IT companies planning to set up operations in the State. It offers end-to-end support for startups, such as plug and play office space, access to investors, mentors, talent pool and funds through venture capital. The government will establish incubation centres and conduct hackathons and workshops for startups, the policy note adds.

The new policy links incentive disbursement to realisation of committed direct employment. Companies will receive a one-time incentive of 10 per cent of the annual salary for each job created in the State. The incentive is capped at Rs.50,000 for an entry-level IT job, Rs.75,000 for a mid-level job and Rs.1,00,000 for a high-end job. This incentive will be 5 per cent higher for women/SC/ST/BC enterprises run by women, Scheduled Castes, Scheduled Tribes and Backward Classes. The incentive will be given after an employee completes one year of work with a company.

The State government will procure all of its IT requirements from companies or startups operating within the State, with the caveat that their products or services are of competent quality. The government is also establishing an ‘IT Emerging Technologies Research University in Visakhapatnam’. The university will offer full-time and part-time degree/diploma programmes for fresh graduates as well as working executives, with the primary focus on applied research in IT and emerging technologies “in priority areas of interest to the State and its governance.”

IT firms will be exempt from the purview of the A.P. Pollution Control Act (except in respect of power generation sets), and also from inspections under the following Acts and Rules, unless there are specific complaints — The Factories Act 1948, The Maternity Benefit Act 1961, The AP Shops & Establishments Act 1988, The Payment of Wages Act 1936, The Minimum Wages Act 1948, The Employment Exchanges (Compulsory Notification of Vacancies) Act 1959, and the AP Employment of Local Candidates Act 2019.

The new policy which was cleared by the State Cabinet, is expected to generate more than 55,000 jobs over the next three years and also create 1.65 lakh indirect employment opportunities. The new policy, according to the policy note, will earn the State a revenue of Rs.783 crore over the next 10 years in the form of taxes, while the direct employment alone is expected to infuse over Rs.2,200 crore every year, leading to the overall growth of the economy through the multiplier effect.