Data centre policy of Karnataka aims INR 10,000 cr. in five years

Data centre policy of Karnataka aims INR 10,000 cr. in five years
Data centre policy of Karnataka aims INR 10,000 cr. in five years

Data centre policy incentives and concessions are available to both existing and proposed data centres

A futuristic data centre policy along with a slew of attractive incentives and concessions for investments in these units has been unveiled by Karnataka as the government aims to attract about INR 10,000 cr. in the emerging sector over the next five years.

As the Cabinet cleared the data centre policy on Monday, the southern state joins the league of Maharashtra, Uttar Pradesh, West Bengal, Tamil Nadu and Telangana to have an exclusive data centre policy for the sector. States are vying with each other to get big ticket investments in the fledgling data storage sector as India’s digital economy is estimated to touch $1 trillion by 2025 and the Centre is pushing for localising storage of data.

With 200MW in capacity over the next five years, the IT/BT department wants to use the data centre policy to jumpstart the data centre industry. While the state currently has eight data centre players including Reliance, Siffy, NTT, NextGen, Trimax, and Airtel, 10 new data centres are expected over the next five years with a capacity of about 170 MW, State’s IT/BT Minister CN Ashwath Narayan said.

In July last year, Adani Group, Mantra Data Centers, NTT Netmagic and Web Werks signed up with Karnataka, proposing to invest about INR 8,000 cr. in data centres.

On value of fixed assets, excluding land and building, investments in data centres will get a one-time capital subsidy of 7 per cent. Over the data centre policy period of five years, an investor can get up to INR 10 cr. in capital subsidy. Besides, the government will also give a land subsidy at 10 per cent of the cost or INR 3 cr. whichever is less on purchase or lease of land.

“With this policy, the government wants to position Karnataka as the destination of choice for futuristic data centres and to make the state an integral part of the global data centre ecosystem and digital supply chain”, said EV Ramana Reddy, Additional Chief Secretary, IT/BT & Industries.

For projects that are of strategic importance in nature and where investments exceed INR 4000 cr., the Cabinet has also decided to consider special incentives on a case-by-case basis.

State’s IT/BT director Meena Nagaraj said the data centre policy incentives and concessions are available to both existing and proposed data centres. While those related to land are available only to investments outside of Bengaluru urban district, other concessions like electricity duty, concessional power tariff and green power tariff reimbursement are applicable everywhere.

INR 1,467 cr. is the estimated cost of concessions over the five-year data centre policy period.

By tweaking a host of building by-laws and construction regulations to align them with the specific needs of data centre buildings, the urban development department has helped data centre policy formulation.

The data centre policy allows eight types of incentives and concessions such as exemption of stamp duty, land conversion fee, and electricity duty, concessional registration charges, concessional power tariff and green power tariff reimbursement.

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