Need incentive scheme for data centres, separate economic zones: TRAI

The telecom regulator has also proposed a new data centre readiness survey for states and a new national body for digitisation, sharing and monetisation of data

India’s telecom regulator has recommended swift roll-out of the proposed Data Centre Incentivisation scheme, creation of data centre-specific economic zones, and a new data centre readiness index for states to boost the digital infrastructure ecosystem in the country.

The recommendations are part of an exercise initiated by the Centre to create a regulatory framework for the setting up of more data centres (DCs), content delivery networks (CDNs), and interconnect exchanges (IXPs) in India.

In its recommendations released over the weekend, the Telecom Regulatory Authority of India (Trai) said the scheme aimed at establishing data centres and that DC Parks should be quickly formulated. It said the Centre can create guidelines on the issue, leaving enough flexibility for the states to announce fiscal incentives through their policies.

Last year, media reports had suggested the Ministry of Electronics and Information Technology (MeitY) was formulating a scheme to incentivise investments into new hyperscale data centres in India, and planning to offer incentives worth up to Rs 15,000 crore for the same. However, no such scheme has been announced so far even as the government expects investments worth Rs 3 trillion in the sector.

The new scheme should offer both fiscal and non-fiscal incentives in the form of land and capital and interest subsidies, Trai said. It also pointed out the Centre should continue to shoulder the majority of the subsidies at this stage. “In such a scheme, while the land may be offered by respective states, the expenses on other offered incentives, including capital and interest, should have at least 75 per cent contribution from central government,” Trai said.

Trai has also pushed for the handholding of states that have scanty data centre footprints and prepare guidelines listing out incentives for data centre parks in line with other advanced states.

New ideas

The regulator has flagged the need for establishing DC Economic Zones (DCEZs) and identified one existing SEZ each in Andhra Pradesh, Kerala, Karnataka, Maharashtra, Haryana, Uttar Pradesh, Madhya Pradesh, Gujarat, Rajasthan, and Odisha, which are located in areas with abandon power and water. It has said these can either be converted into DCEZs or zones for DC parks carved out.

The regulator has recommended a national-level DC Readiness Index (DCRI) framework implemented by the Centre to rank Indian states according to their suitability in promoting the sector. It has also suggested an indicative list of parameters and their weightages for ranking the states.

Data centres are physical facilities used by organisations to house their critical applications and data that enable delivery of shared applications and data. Official discourse on the subject had till now been restricted to the physical location of such centres with the government earlier announcing data localisation and several effective policy measures preventing data flows beyond borders.

However, modern data centres are increasingly evolving into virtual networks that support applications and workloads across pools of physical infrastructure and into a multi cloud environment.

The Trai recommendations focus on physical data centres as of now, an official said. It has suggested the Indian Green Building Council (IGBC) along with Telecommunication Engineering Centre (TEC) should be entrusted with the task of framing certification standards of green DCs in India.

Data body

Trai has suggested the formation of the Data Digitization and Monetization Council (DDMC), an apex body to oversee all issues related to data digitisation, data sharing, and data monetisation in the country. The authority also recommends that DDMC be entrusted with the responsibility of putting in place an overarching framework for the ethical use of data both by the government as well as by the corporates in India.

“The framework should address the generic as well as vertical sector specific requirements,” it said.

It has also recommended the government should put in place a data sharing and consent management framework to provide telecom subscribers a consent-based option to share their KYC data with recipient telecom service providers when they port their numbers.

The suggestions

• Fast roll-out of Data Centre Incentivisation Scheme with land and related subsidies on capital and interest   
• Central govt should bear 75% of incentives and handhold weaker states
• Develop new SEZs for data centres 
• Rank Indian states according to their suitability in promoting the sector
• DDMC should also be entrusted with putting an overarching framework in place for the ethical use of data
  
  
  DDMC: Data Digitisation and Monetisation Council