Odisha allows 20% capital investment subsidy for IT, ITes, ESDM firms

With the second Make in Odisha summit barely four months away, the state government has allowed 20 per cent capital investment subsidy for the IT (information technology), IT-enabled services (ITes) and ESDM (Electronic System Design & Manufacturing) companies investing in the state.

The state government has notified operational guidelines for reimbursement of subsidy on capital investment under  Information and Communication Technology (ICT) Policy 2014 belatedly.

The state government has declared 20 per cent investment subsidy on fixed capital investment for plant and machinery (except land & building) for  IT/ITES/ESDM units with a maximum limit of Rs five million for IT/ITes industries and Rs 50 million for  ESDM industries.

The total investment of the company must be within Rs 500 million in the state to avail the subsidy.

The Odisha government has identified information technology, ITes and ESDM units along with agro and food processing, ancillary and downstream, automobiles and auto-components, manufacturing in aviation and maintenance repair & overhaul (MRO) facilities, biotechnology, gem stone cutting and polishing, handicraft, handloom, coir and leather products, petroleum, chemicals & petrochemicals, pharmaceuticals, plastics and polymers, sea food processing, textile including technical textile & apparel, tourism and hospitality as the priority sectors for attracting investment’s in the Industrial Policy Resolution-2015.

“The government notifying the operational guidelines of the ICT policy will help in attracting investments in the IT and ITes and ESDM sector. The notification will clear the hurdles in the mind of the investors on availing the sops promised by the state government in the policy”, said an official.

Recognising the importance of ESDM, the government had already announced a special incentive package scheme for the sector comprising of subsidy on fixed capital investment for plant & machinery, training subsidy and interest subsidy.

The state government is developing an electronics manufacturing cluster (EMC) under EMC scheme of the Centre exclusively for the ESDM sector. It is coming up on 203 acres of land at Infovalley at the city's periphery at a cost of Rs 2.05 billion. 

Out of this, the Government of India will give a grant of Rs 0.95 billion with the rest being contributed by the state government.

As per India Electronics and Semiconductor Association (IESA), the trade body representing the ESDM industry, the EMC is expected to attract industries with a combined investment value of Rs 10 billion and employment potential of 10,000 to 12,000 persons.