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Information Technology, Electronics & Communications Department

Government of Andhra Pradesh
 NARA CHANDRABABU NAIDU
HONBLE CHIEF MINISTER
OF ANDHRA PRADESH

MESSAGE

The Government of Andhra Pradesh is determined to script its development journey

while incorporating Information Technology at each level and attain leadership
position in the current age.

The Government aims to use e-Governance as a tool to provide integrated services

to its citizens through a free flow of information, and to be a role model in Good
Governance. Based on the Blueprint document, the State Government has
formulated three core policies; IT, Electronics and Innovation & Start-up.

IT policy is based on key four pillars, namely, Human Capital, Infrastructure,

Incentives and above all, a system of Good Governance. The policy envisages
abundant investment opportunities for the industry, employment generation and
enhancing productivity and competitiveness.

With the Electronics policy, Government intends to make Electronics industry as the
growth engine while effectively utilizing the huge talent pool and skilled manpower of
Andhra Pradesh.

For the development of Innovation, entrepreneurship and start-up culture in the State,
The Government has set up an Innovation & Capacity Building Mission. Through this
the State envisages to create the culture of research, innovation and
entrepreneurship. This would contribute to increased knowledge, wealth and
employment in our society.

I am certain that these three policies, prepared with due deliberations and
consultation with the industry and thought leaders, would act as a strong foundation
for the development of the State in the coming years.

[ N. CHANDRABABU NAIDU ]
 DR. PALLE RAGHUNATHA REDDY, MSc, MPhil, Phd
HONBLE MINISTER, GoAP
Information & Public Relations,
Information Technology, Electronics & Communications,
Non-resident Indian Empowerment & Relations,
Telugu Language & Culture,
Minority Welfare & Empowerment

MESSAGE

The state firmly believes that technology is the backbone of economy and hence has
developed an inclusive Blueprint for development of Electronics & ICT Industry in the
State.

Taking cues from the Blueprint, ITE&C Department has come out with three
comprehensive policies. The IT Policy being an umbrella concept provides lucrative
incentives for setting up industries in all locations in the State. The Policy aims to enable
the Government and citizens to take advantage of the cutting-edge technologies like
SMAC currently and those that emerge in future.

Further, the Electronics Policy aims to develop Electronics manufacturing clusters, build
infrastructure such as Electronic Hardware Parks and also provide fiscal and non-fiscal
incentives to promote the industry, while generating employment.

Our Government is determined to promote the culture of innovation and

entrepreneurship in the youth. The Innovation and Start-up Policy ambitiously targets to
create a world class 'technology start-up ecosystem' by nurturing 'entrepreneurship and
a culture of innovation' which would contribute to increased knowledge, wealth and
employment.

IT and Electronics industries are the core industries that can help the Government re-
imagine and reconstruct the new state of Andhra Pradesh. I am sure, these policies
would help accelerate the process.

(PALLE RAGHUNATHA REDDY)

 J. SATYANARAYANA, IAS (Retd.)
ADVISOR TO GOVERNMENT OF AP
e-Government, Electronics & IT

MESSAGE

The Government of Andhra Pradesh has developed a blueprint "Re-Imagining Andhra

Pradesh - role of e-Governance, Electronics and IT" for development of ICT Industry in
the State. The blueprint envisages a large number of conducive policies and simple but
effective frameworks being put in place. It has laid out a vision to "develop AP as an
Innovation Society of global repute, with a focus on enhancing the Quality of Life of its
citizens, through high-quality Education and Healthcare, increased productivity in
Agriculture and allied activities, creation of Employment by promoting Electronics and
IT, and above all, by providing Good Governance."

The IT policy, Electronic Policy and Innovation & Startup Policies are among the 18
policies that have emanated out of the Blue Print, for the growth of IT and Electronics
sector in the Andhra Pradesh, the sun-rise state of Nation

All these three policies are based on key four pillars, namely, Human Capital,
Infrastructure, Incentives and above all, a system of Good Governance.

I am sure these three policies will play a lead role over the next 5 years in spreading of
IT applications across the length breadth of the State for generation of gainful
employment and socio economic development.

(J. SATYANARAYANA)
 B. SREEDHAR, IAS
SECRETARY TO GOVERNMENT
Information Technology,
Electronics & Communications Department
Government of Andhra Pradesh

MESSAGE

Government of Andhra Pradesh came up with the IT, Electronics and Innovation &
Startups policies in order to enable the Government to inter-operate IT businesses
with ease, and provide integrated services to the citizens.

The Policies lay emphasis on the development of state-of-the-art infrastructure, more

specifically, Mega IT hubs, EMCs, ITIRs, IT Layouts/Parks, and Innovation sectors,
through Public Private Partnership mode with conducive incentives and felicitations.

The incentives and business enablers in these policies are unparalleled in the Country.
In addition to investor-friendly incentives and proactive government support, the policies
also emphasize on developing the Innovation & Entrepreneurship culture amongst the
students.

I am certain that these policies will boost investments into Andhra Pradesh, create
ample job opportunities and also build the culture of innovation and entrepreneurship.

(B. SREEDHAR)
VISION
To develop AP as an Innovation Society of global
repute, with a focus on enhancing the Quality of Life
of its citizens, through high-quality Education and
Healthcare, increased productivity in Agriculture
and allied activities, creation of Employment by
promoting Electronics and IT, and above all,
by providing Good Governance
 Srikakulam
Vijayanagaram

Visakhapatnam

East Godavari

West Godavari

Guntur Krishna

Kurnool
Ongole

Anantapuram Nellore
Kadapa

Chittoor
01 AP IT Policy 2014-2020
 ANDHRA PRADESH - SUNRISE STATE OF INDIA

A
ndhra Pradesh had taken a leadership position environment that promotes quality of education in
in e-Governance and Information Technology. emerging technologies and alignment with the specific
The Growth was propelled by the availability needs of the industry. To this end, the following initiatives
of rich talent pool, lower cost of operations and in shall be taken.
some measure due to the innovative policies of the
Government. Consequent on the reorganisation of the 1.1 Changing Course Curriculum: Universities
State, it is imperative to revisit the existing policy initiatives will be advised to change the course curriculum
and make them more attractive to suit the current and to be in tune with the emerging technologies
future requirements of the new State of Andhra Pradesh. and aligned to the requirements of the Industry,
and to introduce courses in entrepreneurship
In the above context, the Government of Andhra Pradesh development.
has developed a blueprint Re-Imagining Andhra
Pradesh - Role of e-Governance, Electronics and IT 1.2 Credits for Online Courses: The Universities
for the development of the ICT Industry in the State. will be advised to give credits to the students
The blueprint envisages a large number of conducive successfully completing notified online courses.
policies and simple but effective frameworks being 1.3 Faculty Upgradation: A special scheme of
put in place. It has laid out a vision to develop AP as faculty upgradation shall be introduced.
an Innovation Society of global repute, with a focus
on enhancing the Quality of Life of its citizens, through 1.4 Establishment of Premier Institutes:
high-quality Education and Healthcare, increased The Government would support opening of
productivity in Agriculture and allied activities, creation premier IT institutes in partnership with the top
of Employment by promoting Electronics and IT, IT Companies and Foreign Universities.
and above all, by providing Good Governance.
1.5 Mandatory Apprenticeship: All educational
The objectives and targets laid out for the next five institutions offering under-graduate courses in
years are software engineering, electronics and computer
to be FIRST in India in Quality & Quantity sciences shall implement a mandatory scheme
of e-Services of internship / apprenticeship in the 4th Year
to be known as the Silicon Corridor of India of the course in association with the industry.
to attract Investments of US $ 2 bn in IT
1.6 Skill Enhancement by MSMEs: Assistance shall
and US $ 5 bn in Electronics manufacturing
be provided to MSMEs with a minimum of 20
to get a 5% share in national exports of Software
employees on its rolls by way of reimbursement
to create an additional direct employment
of 50% of training fees, subject to a maximum of
of 0.5 mil
` 10,000 (INR Ten thousand only) per employee,
to take Gigabit to all Villages
on obtaining recognized certifications in emerging
to make at least one person e-literate
technologies. The assistance under this category
in every household
shall be limited to ` 1 lakh (INR One lakh only)
The blueprint has identified a set of 18 policies and per year per unit.
frameworks to realize the vision and goals stated above.
1.7 Recruitment Assistance: A recruitment assistance
The IT policy laid down in this document is one among
of `15 lakh (INR Fifteen lakh only) to the SMEs
them.
which attain an employment of 100 employees
An effective policy for the development of IT should base within three years of commencement of
itself on the four pillars, namely, Human Capital, commercial operations.
Infrastructure, Incentives and above all, a system of
1.8 Innovation Policy: Innovation is the prime focus
Good Governance. This document specifies the policy
area for the growth of IT industry in the State.
initiatives that the Government intends to take in these
An Innovation Policy shall be announced to
four areas.
promote start-ups and IT units developing
1. Human Capital: Availability of a pool of high-quality innovative products in the State.
manpower is a sine qua non for the development of IT
1.9 e-Literacy: An appropriate scheme would be
Industry. While AP has over 200 engineering colleges and
announced to make one person e-literate in
a large number of training institutions specialized in IT
every household, in partnership with the industry.
and computer sciences, it is necessary to create an

Booklet on ITE&C Department Policies, 2014-2020 | 12

2. Infrastructure b. Assured Power: Andhra Pradesh has recently
been selected as a pilot State to implement the
2.1 Vizag as a Mega IT Hub: Government shall scheme of 24x7 power supply. Within a span of
endeavour to establish state-of-the-art 5 years, the Government intends to make the
infrastructure of international standards suiting State power surplus. As an interim measure,
to the requirements of the IT / ITES Industry. the ICT industry would be exempt from the
Visakhapatnam will be developed as a Mega IT purview of statutory power cuts.
Hub, through an initial effort of developing an IT
township with a built-up space of 5 million square c. Social Infrastructure: A multi-departmental
feet. A signature tower of 1 million square feet mechanism would be established to improve
shall form the nucleus of the Mega IT Hub. the social infrastructure in the cities selected
to be developed as IT Hubs.
2.2 IT Hubs: IT Hubs shall also be developed at
Vijayawada, Kakinada, Tirupati and Anantapur.

2.3 PPP for IT Infrastructure: The facilities, in the 3. Incentives

form of IT Towers, IT Parks and IT Zones, shall be
developed adopting a transparent PPP policy. The A. Incentives applicable to all categories of
following principles will form part of such a policy: IT Industry:

a. For each project, APIIC shall select a partner, A1- Non-Fiscal Incentives
who can be a developer or a consortium of 3.1 ICT industry would be exempt from the purview
developers and the industry players, through of the AP Pollution Control Act, except in respect
a bidding process involving QCBS method. of power generation sets.
b. The responsibility of marketing the facilities created 3.2 IT industry would be exempt from inspections
shall be with the selected partner. The Government under the following Acts and the Rules framed
shall provide such promotional support as needed. there under, barring inspections arising out of
c. Appropriate relaxations will be provided from the specific complaints. The IT units are permitted to
zoning regulations and land usage conversions, file self-certifications, in the prescribed formats.
subject to environmental safeguards. i. The Factories Act, 1948
d. Relaxation to AP Building Rules would be ii. The Maternity Benefit Act, 1961
considered, subject to the payment of City Level
Infrastructure Impact Fee and clearances from Fire iii. The AP Shops & Establishments Act, 1988
Services, Airport Authority and conformance to the
iv. The Contract Labour (Regulations & Abolition)
National Building Code and statutory regulations.
Act, 1970
e. The principles of green buildings, green IT, e-Waste
v. The Payment of Wages Act, 1936
management, Walk-to-Work and Cycle-to-Work
shall be followed while designing the facilities. vi. The Minimum Wages Act, 1948
2.4 Information Technology Investment Regions vii. The Employment Exchanges (Compulsory
(ITIRs): To attract Investments in IT / ITES, and Notification of Vacancies) Act, 1959
Electronic Manufacturing units, Government of
India, had notified the ITIR policy in 2008. ITIR 3.3 General permission shall be available for 3 shift
is expected become a significant driver of the operations with women working in the night for
economic activity in the region, by funnelling the IT / ITES Units / Companies, subject to the IT
resources and efforts of the Central, State and local units taking the prescribed precautions in
governments into the ITIR. Government proposes respect of safety and security of employees.
ITIRs to be developed in Visakhapatnam and
3.4 IT / ITES Units / Companies and non-hazardous
Tirupati initially. The Tirupati-Anantapur corridor
hardware manufacturing industry are declared
will be proposed at a later phase.
as essential service under AP Essential Services
2.5 Other Critical Infrastructure: Maintenance Act.

a. Air Connectivity: The process of expansion and 3.5 CCITI: An empowered Consultative Committee
modernization of the airports at Visakhapatnam for the IT Industry would be formed with the
and Tirupati are afoot. The Government shall take representatives of industry and the other
speedy and effective steps to develop the other stakeholders. The CCITI would administer the
airports in the state to cater to needs of the incentives in a speedy, time-bound and
industry. transparent manner.

13 | Booklet on ITE&C Department Policies, 2014-2020

 3.6 Land Allotment: Allotment of Government land would be permitted in the IT Layouts / IT Towers
or land held by APIIC for industrial development, to synergise collaborations and enhance IT
to the IT units shall be governed by the following employment, subject to the condition that such
principles. sub-leasing shall be only in favour of only any
other IT company.
a. The land allocation for IT Industry will be as per
GO Ms. No:571, Revenue (Assgn.I) Department, A2 Fiscal Incentives
dated:14/09/2012.
3.7 Registration & Stamp Duty: IT industry shall be
b. The land allotment would be based on the business eligible for 100% reimbursement of the Stamp Duty,
proposal and the investment capacity of the Transfer Duty and Registration Fee paid on sale /
company / investor. lease deeds on the first transaction and 50%
thereof on the second transaction.
c. Rebate on Cost of Land Allotted: A rebate on the
cost of the land will be provided @ ` 60,000 per 3.8 Power Subsidy:
employee to the Mega IT Projects (defined below)
and ` 40,000 per employee for other IT projects, a. IT Units classified as MSME shall be eligible for
subject to a maximum of 80% of the land cost as 25% subsidy on power bills for a period of 3 years
determined by the allotment agency. Prescribed from the date of commencement of commercial
guarantees would be taken from the sponsors operations or ` 30 lakh, whichever is earlier.
of the project for the rebate. b. IT Units established by SC / ST & Women
d. Units, for which land is allotted on a rebated cost, Entrepreneurs shall be eligible for 50% subsidy
shall ensure that the facility to be created shall be on power bills for a period of 5 years from the
adequate to provide space for 500 IT professionals date of commencement of commercial operations
on every acre of land. or ` 50 lakhs, whichever is earlier.

e. Only the IT units with IT employee strength of a c. Exemption of Electricity Duty and applicability
100 will be eligible to be considered for allotment of Industrial Tariff: New IT / ITES units, after
of land. coming into commercial operations will be entitled
for 100% exemption on Electricity duty for a period
f. CCITI is empowered to consider the eligibility of of 5 years.
the applicant based on the track record, business
proposal in terms of employment to be created, 3.9 Patent Filing Cost: The cost of filing patents will be
office space to be built, investment to be made reimbursed to the companies having their
and viability of the project proposal. headquarters in Andhra Pradesh, subject to a limit
of ` 5 lakh (0.5 mil) per domestic patent awarded
g. The Conditions of allotment, extent of land to be and ` 10 lakh (1 Mil) per international patent
allotted, employment to be created, office space awarded.
to be built, investments to be made and timelines
shall be incorporated in the MOU / Agreement 3.10 Quality Certification: IT Units shall be eligible for
to be signed with the applicant-company. reimbursement of 20% of expenditure incurred for
obtaining quality certifications for CMM Level 2
h. Sub-leasing: Sub-leasing of the space created upwards, subject to a limit of ` 5 lakh (0.5 mil).
for IT employment, under a scheme of incentives Similar reimbursement will be made to BS 7799

Booklet on ITE&C Department Policies, 2014-2020 | 14

 for security and also for ITES Companies for a. A 50% subsidy on lease rentals up to a maximum
achieving COPC and eSCM certification. of ` 5 lakh (0.5 mil) per annum for a period of 3
The IT / ITES units / Companies can claim this years for any plug and play built up office space
incentive only once. In addition, this incentive taken by start-ups / MSMEs / first-generation
may be extended to other certifications based technocrat entrepreneurs, SC, ST & women
on the recommendations of the CCITI. entrepreneurs STPI, either in IT / Multi-purpose
SEZs / IT Parks or in any notified private area /
3.11 Technology & Market Support: Government will location.
support IT Exporters Associations, ITsAP,
NASSCOM, ELIAP, STPI, IEG, or any such b. Market Development: 50% (100% for SC / ST
organisation (as decided by CCITI) for conducting & Women Entrepreneurs) reimbursement of
surveys and / or research on trends in technology, the exhibition stall rental cost for participating
market intelligence or on other work useful to the in the notified national / international exhibitions
IT Industry. limited to 9 sq.m. of space.

3.12 Business Networking and Promotional Events: c. Recruitment / Training Assistance: Assistance
Government shall promote and encourage @ ` 20000 per IT professional employed within
participation in various national and international a period of two years of establishing the unit.
events by the industry and by leading a
Government-industry business delegation d. All turnkey projects with an outlay up to ` 5 Cr.
to identified Exhibitions and Conferences. (INR 50 Mil) to be undertaken by Government
Government would also undertake various Departments would be reserved for MSMEs
promotional events and road shows at various registered and operating in the State
locations from time to time. e. Performance-linked Grant: MSMEs that record
B. Additional Incentives available to Mega IT Projects: a year-on-year growth rate of 15%, as per audited
accounts, shall be eligible to get a grant of 5%
3.13 Mega Projects: Mega Projects are projects or on Turnover.
investment intents that can create employment
of 5,000 or more in a span of 5 years. f. The Government has published on its portal
The following additional incentives would be (www.ap.gov.in) a Blueprint for development of IT,
provided to the Mega Projects. Electronics and e-Governance sectors in the State.
Suo moto proposals, based on AP Blueprint for
a. In casse where the premises is taken on lease / applications relevant to governmental needs would
rent, a rental subsidy @ ` 10 per sft. per month be accepted from AP-based MSME IT units and the
shall be provided for a period of 3 years in a proposals adjudged to be the best among those
prescribed scale of space per employee. found to be relevant for achieving the objectives
set out in the blueprint will be accepted and
b. An investment subsidy of 10% of the value of the projects to the tune of ` 50 Cr. (INR 500 Mil) p.a.
Capital Expenditure, other than land, shall be would be awarded to the IT units so selected.
provided to Mega Projects that enter into an
MoU with the State within 2 years of notification g. Subsidy on Bandwidth for Connectivity: A 20%
of the Policy. subsidy on Bandwidth for connectivity paid to
Internet Service Provider (ISP) shall be available
C. Additional incentives available to MSME IT Units: for a period of two years from the date of starting
3.14 MSME IT units are those units that have an annual commercial production / operation.
turnover of ` 25 Cr. (250 mil). The following
additional incentives are available to such units:

D. Additional incentives available to IT Units established by SC / ST Entrepreneurs

3.15 The following additional incentives shall be available to IT Units established by SC / ST entrepreneurs.

ITEM INCENTIVE AVAILABLE

Reservation of Built-up space Reservation of 15% built up space

Investment Subsidy 25% on the Fixed Capital & an additional 5% to SC / ST women

entrepreneurs, with a maximum limit per unit of ` 25 Lakh

Interest Subsidy 8.5% Interest Subsidy on Prime Lending Rate (PLR) on the term loan and
Working Capital subject to a maximum of ` 50 Lakh per year for a period
of 5 years for the units which commence commercial operations

15 | Booklet on ITE&C Department Policies, 2014-2020

 E. Additional Incentives available to IT Units established by Women Entrepreneurs
3.16 The following additional incentives shall be available to IT Units established by women entrepreneurs.

ITEM INCENTIVE AVAILABLE

Reservation of Built-up space Reservation of 15% built up space

Investment Subsidy 20% on the Fixed Capital with a maximum limit per unit of ` 20 Lakh

Interest Subsidy 5% (8.5% for SC / ST women entrepreneurs) Interest Subsidy on Prime

Lending Rate (PLR) on the term loan and Working Capital subject to a
maximum of ` 50 Lakh per year for a period of 5 years for the units which
commence commercial operations

F. Additional Incentives available to Rural IT Units A provision shall be made in the relevant legislations
or rules that in case the required approvals are not
3.17 In addition to the incentives available for MSMEs, granted within 4 weeks of receipt of an application in
IT Units established in Rural areas shall be eligible full-shape, the approval shall be deemed to have been
for the following incentives: given.
a. All district-based turnkey projects with an outlay 4.3 Empowered Mission for Electronics & IT
of up to ` 50 Lakhs would be reserved for Promotion: An empowered Mission would be
Rural IT companies. established to give a fillip to the development of
b. Subsidized loans towards the infrastructure / the sector and take faster and agile decisions.
operations cost through SFC / rural banks The mission would be headed by a technocrat
would be arranged for such enterprises. and would have 3 experts in Electronics & IT,
2 academicians and an expert in Marketing &
G. General Provision relating to incentives: Promotion.

3.18 The incentives listed herein would be available 4.4 APIIC to be Industrial Area Local Authority
to the new companies and to the expansions of (IALA): All IT Industrial Areas / IT Layouts / Zones /
existing companies, unless the same has been Corridors, including Electronic Manufacturing
claimed earlier. Clusters (EMCs) and ITIR delineated processing
areas of APIIC in the State shall be accorded the
4. Governance of IT Policy
status of Industrial Authority Local Area (IALA)
4.1 Effective Single-Window System: A highly immediately so that the execution and maintenance
empowered Single Window Clearance Unit will be of IT Industrial areas shall be effectively planned,
created and operationalized for granting approvals executed and implemented by APIIC in the interest
& clearances for setting up New IT Units and for of the promotion of Information Technology Sector.
expansion of the existing IT units in the State. All statutory clearances to IT Parks / IT Campuses
It would be supported by a state-of-the-art constructed by IT Infrastructure Companies /
centralized help desk on a 24x7 basis duly builders / developers and IT / ITES Industry /
leveraging the e-Biz portal set up by GoI. Companies / Units for own use on lands allotted
The objective of this window would be to by APIIC in their Industrial Local Area Authority,
(a) reduce time to set up business and would be given by APIIC.
(b) reduce cost of doing business.
This Policy is valid for a period of 5 years from the date
4.2 Time-bound Approvals: The following procedural of its notification and supersedes the ICT Policy 2010-
reform would be undertaken with an aim to provide 2015.
approvals to the industry / investors within 4 weeks.
ITE&C Department shall issue appropriate
a. Integrated Application for all permissions Implementation / Operational Guidelines with
simplified application proforma and procedure for
b. Escort Officer to be assigned the responsibility claiming of the incentives.
for getting approvals

c. Escalation at various levels and regular monitoring

Booklet on ITE&C Department Policies, 2014-2020 | 16

02 Andhra Pradesh Electronics Policy 2014-2020
 PREPARING FOR THE FUTURE

Globally, the Electronics Industry is the largest and

fastest growing manufacturing industry in the world,
with a size of USD 1.75 Trillion. It is expected to reach
USD 2.4 Trillion by 2020. The demand in the Indian
market was USD 70 Billion in 2013-14 and is expected
to reach USD 400 Billion by 2020. Domestic demand
is expected to be driven by the growth in income levels
leading to higher off-take of electronics products,
automation demands of corporate sector and
Governments focus on e-Governance. However, with
a low domestic manufacturing base and a low value
addition, the demand-supply gap is likely to reach
USD 300 Billion by 2020. To meet this alarming situation,
and to enhance domestic manufacturing and value-
addition in Electronics Systems Design and
Manufacturing (ESDM), the Department of Electronics
and Information Technology (DeitY), Ministry of h
es y
Communications and Information Technology (MoC&IT), rad olic
P P
a
Government of India, notified the National Policy on d hr nics 020
An ectro 14-2
Electronics in 2012. The NPE 2012 seeks to attract El 20
investments to the tune of USD 100 Billion and to create
employment of 28 Million by 2020.

Context for the AP Electronics Policy

Government of Andhra Pradesh has recently developed
a blueprint Re-Imagining Andhra Pradesh -
Role of e-Governance, Electronics and IT for the
development of the Electronics & ICT Industry in the
State. It has laid out a vision to:

Develop AP as an Innovation Society of global repute, The Vision envisaged for the Andhra Pradesh
with a focus on enhancing the Quality of Life of its Electronics Policy 2014-2020 is: To develop
citizens, through high-quality Education and Electronics Industry as an important Growth Engine
Healthcare, increased productivity in Agriculture and for Andhra Pradesh through effective use of the
allied activities, creation of Employment by promoting talent pool, skill enhancement, promotion of
Electronics and IT, and above all, by providing Good innovation & future technologies and creation of
Governance. excellent infrastructure.

The blueprint has identified a set of 18 policies and The Policy aims to attract investments to the tune of
frameworks to realize the Vision. The Electronics Policy ` 40,000 Cr. (USD 5 Billion) in ESDM sector and create
laid down in this document is one among them. an employment of 4 lakhs (0.4 Million) by 2020.
Andhra Pradesh with its huge talent pool, skilled
manpower and entrepreneurship is highly suited to Government of AP intends to achieve its vision,
take advantage of the opportunities offered by the objectives and goals set forth above, through a
Electronics sector. combination of the following strategies.

Booklet on ITE&C Department Policies, 2014-2020 | 20

 1. Adopting and 2. Building Infrastructure
promoting of
NPE 2012 of GoI
2.1 Mega Electronics Hub: Government of Andhra
Pradesh envisages developing an Information
4. Promotion of Technology and Investment Region (ITIR) in
Electronics AP Visakhapatnam. In the ITIR, the Government would
2. Building reserve two clusters / areas to be solely developed
Infrastructure as Electronics Hubs. Visakhapatnam is proposed
to be developed as a Mega Electronics Hub for the
5. Adoption of State.
Mission

3. Top-up
Approach 2.2 Electronic Hardware Park(s): GoAP will facilitate
incentives of GoI
the setting up of the Electronic Hardware Park in
Kakinada as announced by GoI. The Park would
6. Innovation & feature state-of-the-art infrastructure with all basic
Capacity amenities such as internal roads, water, power and
Building other common facilities for the Electronics Units.

2.3 Common Facilities Centre: Common Facilities

Centres would be created in all identified
Electronics Hubs.

2.4 Visakhapatnam-Chennai Corridor: Fast

movement of inputs, components and finished
products is essential for cost-effectiveness in the
ESDM sector, which otherwise operates on thin
1. Adopting and promoting of NPE 2012 of GoI margins. Steps would be taken to enhance the
logistics along the Visakhapatnam-Chennai
Given the comprehensive and holistic nature of the Corridor.
National Policy on Electronics 2012, the Government
of AP intends to fully leverage the same and build upon 2.5 PPP for Creation of Electronics Hardware
its strengths, as stated below. Infrastructure: Facilities, in the form of electronics
hubs, hardware parks and electronics zones, shall
1.1 Electronics Manufacturing Clusters (EMCs): be developed adopting a transparent PPP policy.
The EMC Scheme intends to create infrastructure The following principles will form part of the policy:
highly suited to electronics units by providing a
subsidy of 50%. The Government of Andhra a. For each project, APIIC shall select a partner, who
Pradesh proposes to promote the development can be a developer or a consortium of developers
of 20 EMCs across the State, by facilitating the and the industry players, through a bidding
preparation of project proposals by the process involving the QCBS method.
entrepreneurs and providing single-window
b. The responsibility of marketing the facilities
clearances.
created shall vest with the selected partner.
1.2 Target investment of ` 30,000 Cr. under The Government shall provide promotional
M-SIPS: Government would make all efforts to support as needed.
attract investments to the tune of ` 30,000 Cr.
c. Appropriate relaxations will be provided from the
(USD 5 Billion) and facilitate the units to get
zoning regulations and land usage conversions,
the 25% Capital Expenditure subsidy
subject to environmental safeguards.
under the M-SIPS scheme of GOI.
d. Relaxation to AP Building Rules would be
1.3 Preferential Market Access: The policy of GoI
considered, subject to the payment of City Level
on preferential market access for domestically
Infrastructure Impact Fee and clearances from
manufactured electronics products shall be
Fire Services, Airport Authority and conformance
implemented in all departments procuring
to the National Building Code and statutory
electronics in large quantities. Additional
regulations.
preference shall be given to AP-based domestic
manufacturers. 2.6 Renewable Energy: The State Government will
encourage units using renewable energy. Units
1.4 Create a Joint Government-Industry committee
using renewable source of energy with a minimum
to market India and attract investments in the
of 40% of their power requirements coming from
Country.
renewable sources for their operations and
1.5 Create a fund under the management of the manufacturing will be eligible for additional
Committee comprising representatives of industry incentives such as Electricity Duty exemption for
bodies and government, with an equal stake to 5 years. Sales tax exemption for 2 additional
promote design, manufacturing, assembling and years shall be available against the Carbon
innovation and packaging business. Credits earned on a year-on-year basis.

21 | Booklet on ITE&C Department Policies, 2014-2020

 2.7 Other Critical Infrastructure: 3.4 CCITI: An empowered Consultative Committee
on Information Technology Industry (CCITI)
a. Air Connectivity: The process of expansion and would be formed with the representatives of
modernization of the airports at Visakhapatnam Electronics industry and the other stakeholders.
and Tirupati are afoot. The Government shall take The CCITI would administer the incentives in a
speedy and effective steps to develop other speedy, time-bound and transparent manner.
airports in the State to cater to the needs of the
Industry.

b. Assured Power: Andhra Pradesh has recently A2 Fiscal Incentives

been selected as a pilot State to implement the
24x7 power supply scheme. Within a span of 3.5 Registration & Stamp Duty: The Electronics
5 years, the Government intends to make the Industry shall be eligible for 100% reimbursement
State power surplus. As an interim measure, of Stamp Duty, Transfer Duty and Registration Fee
the electronics industry would be exempt from paid on sale / lease deeds on the first transaction
the purview of statutory power cuts. and 50% thereof on the second transaction.

c. Social Infrastructure: A multi-departmental 3.6 Power Subsidy:

mechanism would be established to improve
the social infrastructure in the cities where a. 50% to micro, 40% to small & 25% to medium &
ITIR or EMCs are proposed to be developed. 10% to large-scale industry limited to ` 50 lakhs
Power Subsidy on power bills for a period of
5 years from the date of commencement of
commercial operations.
3. Top-up Incentives of GoI
b. Exemption of Electricity Duty: New Electronic
In addition to the incentives by the GoI as per NPE 2012, Hardware units, after coming into commercial
the Government of Andhra Pradesh shall provide the operations will be entitled for 100% exemption
following additional incentives. on Electricity duty for a period of 5 years.

A. Incentives applicable to all categories of 3.7 Patent Filing Cost: The cost of filing patents
Electronic Hardware Industry: will be reimbursed to the companies having their
headquarters in Andhra Pradesh, subject to a limit
A1- Non Fiscal Incentives of ` 5 Lakh (0.5 Million) per domestic patent
awarded and `10 Lakh (1 Million) per international
3.1 Electronics Industry would be exempted from patent awarded.
inspections / certifications under the following
Acts and the Rules framed thereunder and as 3.8 Quality Certification: 50% subsidy on the
administered by the Labour Department, barring expenses incurred for quality certification limited
inspections arising out of specific complaints. to ` 4 Lakh (0.4 Million) (Conformity European (CE),
The Electronic Industry (units) are permitted to China Compulsory Certificate (CCC), UL
file self-certificates, in the prescribed formats Certification, ISO, CMM Certification, SA, RU etc.)
for the following statutes.
3.9 Cleaner / Greener Production Measures:
i. The Factories Act, 1948 25% subsidy on cleaner / greener production
measures limited to `10 Lakh (1 Million).
ii. The Maternity Benefit Act, 1961
3.10 VAT / CST Reimbursement: 100% Tax
iii. The AP Shops & Establishments Act, 1988 reimbursement of VAT / CST, for units started
iv. The Contract Labour (Regulations & Abolition) after the date of issue of this Policy, for a period
Act, 1970 of 5 years from the date of commencement of
production for products manufactured in AP
v. The Payment of Wages Act, 1936 and sold in AP.

vi. The Minimum Wages Act, 1948 3.11 Skill Upgradation & Training: 50% reimbursement
/ grant of cost involved in skill upgradation and
vii. The Employment Exchanges (Compulsory training local manpower limited to ` 2,000 per
Notification of Vacancies) Act, 1959 person.

3.2 General permission shall be available on the lines 3.12 Investment Subsidy: 20% Investment Subsidy
similar to IT / ITES industry for 3 shift operations limited to Rs.20 lakhs (2 Million) for MSME and
with women working in the night, subject to the additional 5% investment subsidy for
Electronics Units taking the prescribed precautions Women/SC/ST Entrepreneurs.
in respect of safety and security of employees.
3.13 Interest Rebate: 3% Interest Rebate limited to Rs.5
3.3 Electronics Hardware industry is declared as an lakhs (0.5 Million) per year for 5 years
essential service under the AP Essential Services
Maintenance Act.

Booklet on ITE&C Department Policies, 2014-2020 | 22

3.14 Capital Subsidy: 10% subsidy on new capital Products in the State. The Bazaars would also
equipment for technology upgradation limited to provide space for new product launches.
Rs.25 lakhs (2.5 Million) as one time availment by
the eligible company. 4.4 Enhance Web Presence / Marketing: An
extensive web marketing campaign will be run
3.15 Rebate on Land Cost: 25% rebate on land cost with the help of a professional agency.
limited to ` 10 Lakh (1 Million) per acre in The Campaign would focus on marketing and
Industrial Estates, Industrial Parks, SEZs, EMCs branding Advantage AP.

4.5 Create widely known Points of Contact:

Government would create liaison offices in select
B. Additional incentives available to Mega Projects: locations for facilitating industry interactions.
3.16 Mega Projects: Mega Projects are the projects 4.6 Incentives to the Industry
or the investment intents with minimum Investment
of ` 250 Cr. (2.5 Billion) or the ones that can create a. Technology & Market Support: Government will
an employment of more than 2,000 persons in a support associations of electronic hardware
span of five years. A special dispensation manufacturers and exporters like IESA, ELCINA,
would be provided to the Mega Projects. ELIAP, for conducting surveys and / or research
on trends in technology, market intelligence or
3.17 Allotment of Government land for construction on other work useful to the Electronic Hardware
of own Manufacturing Facility: Allotment of Industry.
Government land for construction of own
manufacturing facility by the Electronic Hardware b. Business Networking and promotional events:
Industry is made available subject to availability, Government shall promote and encourage
fulfilment of certain eligibility criteria by the participation in national and international events
applicant and on payment of land cost and by the industry and by leading a government-
development cost, as determined from time to industry business delegation to identified
time by the allotment agencies i.e. APIIC / Urban Exhibitions and Conferences. Government
Development Agencies / concerned local would also undertake promotional events and
Statutory Authorities subject to the guidelines road shows at various locations from time to time.
issued vide GO MS No. 571 Revenue (Assin.I) A reimbursement / grant of 50% exhibition subsidy
Dept. dt: 14/9/2012. will be awarded for participating in the national /
international exhibitions up to 9 sq.m. per unit.

4. Promotion of Electronics AP

The new State of Andhra Pradesh has competitive

advantage in terms of relatively lower land cost when 5. Adoption of Mission Approach
compared to those in Hyderabad, Chennai and
Bangalore. Keeping this in view, certain Promotion 5.1 Empowered Mission for Electronics & IT
Initiatives are envisaged. Promotion: An autonomous society, with
headquarters at Visakhapatnam, would be created
4.1 Mega Electronics Event: An Annual Mega as an Empowered Mission for Electronics & IT
Electronics Event shall be organized in the State in Promotion to give fillip to the development of the
partnership with the industry. The Government
would ensure that the event becomes a national sector and take faster and agile decisions.
event for showcasing and promoting the The Mission would be headed by a technocrat
electronics industry in the country. and would have 3 experts in Electronics & IT,
2 academicians and an expert in Marketing &
4.2 Road Shows: Road shows will be conducted in Promotion.
the United States, Japan, Germany, Korea, Taiwan
and China for the promotion of the industry in the 5.2 Effective Single-Window System: A high-level,
state. Joint delegations of the Industry and the empowered Single Window Clearance Unit
State Government shall participate in various will be created and operationalized for granting
national and international Exhibitions / Conferences approvals & clearances for setting up New Units
/ Trade Shows relating to electronics, to attract and for expansion of the existing units in the State.
investments into the state. It would be supported by a state-of-the-art
centralized help desk on 24x7 basis duly
4.3 Establish Electronics Bazaars: Government of leveraging the e-Biz portal set up by GoI.
Andhra Pradesh proposes to set up Electronics The objective of this window would be to
Bazaars at Visakhapatnam, Vijayawada and (a) reduce time to set up business and
Tirupati. The Electronics Bazaars would act as (b) reduce cost of doing business.
G2B / B2B / B2G / B2C Platforms for Electronic

23 | Booklet on ITE&C Department Policies, 2014-2020

 5.3 Time-bound Approvals: The following procedural to be implemented through Junior Colleges,
reform would be undertaken with an aim to provide Polytechnics and ITIs would have an annual target
approvals to the industry / investors within 4 weeks. of 8,000 students in Electronics sector by 2017.

a. Integrated Application for all permissions 6.4 Universities and Boards like Board of Intermediate
Education will be advised to change the course
b. Escort Officer to be assigned the responsibility curriculum to stay in tune with the emerging
for getting approvals technologies and align to the requirements
of the industry and also to introduce courses
c. Escalation at various levels and regular monitoring in skill and entrepreneurship development.
A provision shall be made in the relevant legislations 6.5 Content Development: Government would
or rules that in case the required approvals are support content development for online courses
not granted within 4 weeks of receipt of an application that would meet the current and future industry
in full-shape, the approval shall be deemed to have demands in association with Industry / Industry
been granted. Associations / Academia and institutions such as
5.4 Mission to Identify & work on Thrust Areas: SCERT, SIET, etc.
Based on industry demand, the Electronics & IT 6.6 Credits for Online Courses: Universities will be
Mission would identify key thrust areas / segments advised to give credits to students successfully
in the Electronics Industry. Special focus would be completing notified online courses.
laid for developing the ecosystem for these thrust
areas. The indicative thrust areas are Fabless 6.7 Faculty Upgradation: A special scheme of faculty
Semiconductors, Mobile, LED, Smart Meters, upgradation shall be introduced, at High School
FPD TVs, Tablets, Base Stations, Smart Cards, and Junior College Level, so as to align skill
Sensors, IOT. development courses with Electronics Industry
for apprenticeship and eventual placements
5.5 APIIC to be Industrial Area Local Authority as part of Vocational Education.
(IALA): All IT Industrial Areas / IT Layouts / Zones /
Corridors, including Electronic Manufacturing 6.8 Government would support the opening of
Clusters (EMCs) and ITIR delineated processing premier institutes for electronics and hardware
areas of APIIC in the State shall be accorded the in partnership with top electronics companies
status of Industrial Authority Local Area (IALA) and foreign universities.
immediately so that the execution and
maintenance of IT industrial areas shall be 6.9 Mandatory Apprenticeship: All educational
effectively planned, executed and implemented by institutions offering under-graduate courses in
APIIC in the interest of promotion of Electronics software engineering, electronics and computer
Sector. All statutory clearances in the Industrial sciences shall implement a mandatory scheme
Local Area would be given by APIIC. of internship / apprenticeship in the 4th year
of the course in association with the Industry.

6.10 Provision of Special Fund for Electronic Labs

6. Innovation & Capacity Building in Schools: Considering the importance of
Computer and Electronics Knowledge and to
6.1 Establish COE on Fabless Semiconductors: evolve this as a knowledge base at the school
The Government aims at setting up a Centre of level, it is essential to set up a Fund to establish
Excellence in design of Fabless Semiconductors basic Electronic Labs. This would enable the
in partnership with the industry and the premier school to conduct demonstrations and training
academic institutions in the State. to the students who envisage interest in electronics
6.2 PhDs: The State shall target to reach a level of and thereby develop the basic electronic
producing 250 PhDs in Electronics by 2018 knowledge even before they get to the Diploma or
under the scheme approved by GoI. Graduation courses.

6.3 Skill Enhancement by MSMEs: Assistance shall This policy is valid till 2020 unless modified and
be provided to MSMEs with a minimum of 20 supersedes the Andhra Pradesh Electronics Hardware
employees on its rolls by way of reimbursement Policy 2012-17. This Policy would be reviewed and
of 50% of training fees, subject to a maximum updated every year, if required, in consultation with the
`10,000 (INR Ten thousand only) per employee,
stakeholders.
on obtaining recognized certifications in emerging ITE&C Department shall issue appropriate Implementation
technologies. The assistance under this category / Operational Guidelines with simplified application
shall be limited to `1 lakh (0.1 Million) per year proforma and procedure for claiming of the incentives.
per unit. Also, the Skill Development program

Booklet on ITE&C Department Policies, 2014-2020 | 24

03 AP INNOVATION & STARTUP POLICY
 AN ENTREPRENEUR IN EVERY FAMILY

PREAMBLE: The State of Andhra Pradesh shares a collective dream

Globally, the United States of America has been at the of a new India where new generation software products
forefront in research and development in the recent past would be manufactured creating multiplier effects in the
while Israel has been the leading spender in R&D and growth of the State and Nation, employment creation,
Innovation (in terms of % of GDP). In the last decade, and social transformation.
India spent less than 1% of the GDP for R&D and
Innovation. R&D in India, is still largely financed by Through the Innovation and Startup Policy, the
government sources. Out of over 5,000 Incubators Government intends to create an ecosystem that
across the world, India has only 65. Countries such as produces an entrepreneur in every family. The targets
Netherlands, Singapore, Sweden, etc. have been giving laid out for Andhra Pradesh, through this Policy, by
more importance to R&D and Innovation. June 30, 2019 are:
100 Incubators / Accelerators to be established
Science, Technology and Innovation (STI) have emerged 5,000 Companies & Startups to be incubated
as the major drivers of National Development globally. 1 million sft. of Incubation Space to be developed
India has declared 2010-20 as the Decade of Innovation. Venture Capital of ` 1000 Cr. to be mobilized for
GoI has stressed the need to enunciate a policy to Innovation
synergize science, technology and innovation. In 2013, Foster Innovation Culture
GoI came up with the Science, Technology & Innovation Create at least one home grown billion dollar
Policy, in order to create a robust innovation culture and technology startup
ecosystem. It proposes to increase the expenditure on
Innovation R&D to 2% of the GDP. For the development of The Policy would have the following Niche Themes as
an innovation culture in the Country, the policy envisages focus in the initial period:
the creation of a conducive ecosystem for venture capital Internet of Things (IoT)
in the MSME sector with an initial corpus of ` 10,000 Cr. IT for X in the areas of Pharma, Oil & Gas,
Urban Management
The Constitution of India along with our fundamental rights Social Media, Mobility, Analytics and
has given every citizen 10 fundamental duties of which two Cloud Computing (SMAC)
are Fabless Semiconductors
a. To develop the scientific temper, humanism and the Animation & Gaming
spirit of inquiry and reform; Entertainment
b. To strive towards excellence in all spheres of Visual Effects
individual and collective activity so that the Nation Health and Fitness
constantly rises to higher levels of endeavor and Automotive
achievement

The State needs world -lass scientific and technology Though the IT policy of the State would be the mother
ecosystems that would empower and enable its youth to policy for the startups in the sector, a specific policy on
carry out this fundamental duty to our beloved nation. innovation would top up the efforts of the IT policy.
The new policy for innovation would base itself on the
For the development of innovation, entrepreneurship and 5 pillars of Shared Infrastructure, Accelerators /
startup culture in the State, GoAP proposes to set up an Incubators, Human Capital, Funding and above all,
Innovation & Capacity Building Mission as envisaged in a system of Good Governance (State Support).
the Blueprint Document Re-Imagining Andhra Pradesh The efforts and activities to be taken up in these areas
Rrole of e-Governance, Electronics and IT (available are listed below.
on www.ap.gov.in).
1. Shared Infrastructure:
The Vision envisaged for the new Innovation & Startup
Policy is: The Government will endeavor to create world-class
To create a world-class technology startup shared infrastructure for technology product startups to
ecosystem by fostering entrepreneurship and a operate at no cost and technology service startups at
culture of innovation which contributes to increased nominal cost till the company achieves self-sufficiency.
knowledge, wealth and employment in our society.

Booklet on ITE&C Department Policies, 2014-2020 | 28

1.1 Existing Models of Development: Government be deposited. The operational cost of running the
will encourage the Host Institutions of existing facility, such as building maintenance, would be
Technology Business Incubators (TBIs) to set up covered from the rent. The surplus cash, if any,
their TBIs in the State to jump-start the startup generated each year, would be transferred back
ecosystem. The Innovation and Capacity Building to the Revolving Fund until the total Project Cost
Mission would study the existing models of is recovered completely.
Incubation / Startup centers across various
locations and come up with recommendations 1.2.1 Along with the Incentives provided in the IT Policy,
on the facilities and shared infrastructure to be Host Institutes of TBIs that are recognized by
developed. National Science and Technology Entrepreneurship
Development Board (NSTEDB) shall be entitled for
1.2 Incubation Infrastructure Development Fund: lease of land and space for a period of 90 years for
The Government shall develop physical incubation setting up TBIs and related infrastructure to create
infrastructure through Public Private Partnerships. world-class Live-Work-Play environments at
A New Incubation Infrastructure Development Fund Government-owned IT Parks. The lease amount
will be setup under the Innovation Mission as a in such cases shall be payable in equal annual
Revolving Fund that provides Conditional Grant for installments over the period of lease.
SPVs, promoted by Host Institutes of TBIs and
approved by NSTEDB, DST, GoI. The Fund should 1.2.2 The responsibility of marketing the facilities created
be used for the creation of Social Infrastructure in shall be with the selected partner. The Government
the State of Andhra Pradesh for a full fledged shall provide such promotional support as needed.
Startup Ecosystem, comparable with the best
in the world, which has Incubation facilities, 1.2.3 Appropriate relaxations will be provided from the
Infrastructure for R&D labs, Office spaces, small zoning regulations and land usage conversions,
and large Conference rooms, Small Office Home subject to environmental safeguards.
Offices (SOHO), Residential facilities like Hostels,
1.2.4 Relaxation to AP Building Rules would be
Dormitories, 1-2-3 BHKs, Office spaces for Skunk
considered, subject to the payment of City Level
works, Innovation zones and other modern
Infrastructure Impact Fee and clearances from Fire
amenities. The SPV mechanism also has to have
Services, Airport Authority and conformance to the
an escrow account jointly with a leading financial
National Building Code and statutory regulations.
institution into which the entire rent collected would

29 | Booklet on ITE&C Department Policies, 2014-2020

 1.2.5 The principles of green buildings, green IT, e-Waste through strong educational support to bring out
management, Walk-to-Work and Cycle-to-Work innovators and technopreneurs among the youth. The
shall be followed while designing the facilities. Government would work with universities, educational
institutions and the industry to provide pre-trained
1.3 Common Infrastructure: manpower in emerging technologies and to foster a
culture of entrepreneurship.
The Government would facilitate the creation of support
infrastructure for the development of the innovation 3.1 Update Syllabus: The Universities will be advised
ecosystem to attract new entrepreneurs. This includes: to change the course curriculum to be in tune
with the emerging technologies and align to the
a) Common Testing labs & Tool rooms requirements of the Industry, and to introduce
courses in entrepreneurship development through
b) Enterprise Software & shared Hardware
incubators. Industry experts may be leveraged
c) Shared services like Legal, Accounting, to teach courses at incubators and students
Technology, Patents, Investment Banking who are interested may elect these courses.
The evaluation provided by approved industry
d) Other amenities and facilities like individual experts may be sent by the incubator to colleges /
accommodation, hostel rooms university for inclusion in the electives that
students can learn as part of the degree course.
e) Community for startups
3.2 Faculty Upgradation: A special scheme of faculty
upgradation shall be introduced. Government
would support enhancing infrastructure at existing
2. Accelerators & Incubators: universities to train the faculty for promotion of
innovation.
The Government shall establish at least one world-class
Accelerator / Incubator by inviting global accelerators and 3.3 Mandatory Apprenticeship: All educational
incubators to set up their programs in the State. institutions offering under-graduate courses shall
implement a mandatory scheme of internship /
2.1 The Government will also support small
apprenticeship in the last year of the course in
accelerators / incubators in multiple locations,
association with the Industry. This may be
by providing support and space to bring in
waived off for students who are setting up
expertise and startups in the incubation centers
their own startups in Incubators.
through diverse models.
3.4 Credits to MOOCs and insertion as electives:
2.2 The Government targets to create 1 million sft.
The Universities will be advised to give credits
of Incubation Space by 2019
to the students successfully completing notified
2.3 Government proposes to partner with Indian and online courses (MOOCs) and their insertion
globally successful Incubators in order to replicate as electives. The University in conjunction with
the successful Funding and Mentoring Models. Incubators operating in the state shall decide the
number of credits and evaluation methodology
2.4 Government proposes to partner with accelerators for such courses. Students should be free to
by providing support and space to bring in learn electives even in first or second year of
expertise in operating and managing the college as part of degree completion.
Incubation centers.
3.5 Gap Year - Concept of Student Entrepreneur
2.5 Government would focus on closely monitoring in Residence: Universities may introduce the
the proceedings of the initial batches / groups concept of Student Entrepreneur in Residence.
in the Incubation centers as these would seed the Outstanding students who wish to pursue
ecosystem which will fuel the subsequent batches. entrepreneurship can take a break of one year,
after the first year, to pursue entrepreneurship
full time. This may be extended to two years
at the most and these two years would not be
3. Human Capital: counted for the maximum time for graduation.
Even though this can be done even now, our
Inculcating the habit and embedding the idea of society is still not ready and thus having this
innovation among all the citizens in every aspect of as a scheme from the University would ensure
economic activity is essential for promoting the culture parents are comfortable and confident that this
of innovation in the people. This needs to be achieved is a Government approved scheme that their
children are availing. The Gap Year facility may be

Booklet on ITE&C Department Policies, 2014-2020 | 30

 given to ensure syllabus continuity at the time of 3.10 Entrepreneurship Learning - Pilot Incubators are
joining back and after an appraisal process by an to roll out one day training programs in schools for
incubator where the student is attached. exposure to entrepreneurship. At college level,
entrepreneurship training has to be immediately
3.6 IT & Entrepreneurship @ College level: provided as a weekend workshop done in
partnership to be taken up by the Innovation
All Universities in Andhra Pradesh may give 5% and Transformation Academy.
grace marks and 20% attendance every semester
for student startup teams, which have at least one 3.11 Attracting International Mentors: Government
woman as a cofounder. will provide subsidy to Incubators for bringing
international consultants, mentors and for hiring
Students may be permitted to undertake their and training local fresh talent.
Industrial Seminar, Project Seminar and Industrial
Visit at Technology Business Incubators where 3.12 International Startup Culture and Exchange
additional facilities are being setup. Programme - An international startup program
would be setup to send the most brilliant startups,
Student Entrepreneurs working on a startup idea college and school students to leading startup
from first year of college may be permitted to destinations around the world for getting global
convert their startup project as their final year exposure at a young age. Select College Principals
project towards degree completion. Mentors and Teachers would also be sent for gaining
assigned by Incubators may be allowed to international exposure about the startup culture in
conduct Viva Voce. Project Reports certified universities like Stanford, Harvard and MIT and see
by the Incubators may be sent back to the how MOOCs are being used in various schools
respective colleges for forwarding to the university. and colleges for education. Similarly, tie-ups may
be setup to bring world-class startups to work
All the above three proposals may be implemented by
alongside startups in Andhra Pradesh for faster
Universities from the semester starting from June-July
learning and cultural exchange.
2014 itself and may issue this with immediate effect.
3.13 e-Literacy: The GoI scheme of e-Literacy would be
3.7 Distribution of Raspberry Pi / Adruino / Little
implemented to make one person e-literate in every
Bits Kits & Startup boxes to the students:
household, in partnership with the Industry.
Schools in the State would be encouraged and
helped to distribute Rasberry Pi, Adruino, Litte Bits 3.14 Innovation Zones - All State departments have to
& Startup boxes to promote the teaching of basic setup Innovation Zones at Pilot Incubators in order
computer science in schools and ignite the to bring closer industry-institute interaction for
imagination of students. Government would also creating innovative products and applications for
make efforts to bring in private sector and CSR the PSUs under the Department, eGovernance
funding for this purpose. Applications, SMAC products etc. in the
Department.
3.7.1 Annual Science Fairs would be held to identify
and promote innovation & Entrepreneurship at 3.15 Market Support and State Database:
School Level. Government will focus on startups while supporting
industry associations (as decided by AP Inc.) for
3.7.2 A program would be conceptualized to have
conducting surveys and / or research on trends
district level competitions for business ideas for
in technology, research, innovation and market
Student groups from 8th to 10th standards with a
intelligence on niche themes. It would also create
maximum grant of ` 25,000 per idea. A maximum
a portal containing a database of innovations
of 50 ideas each year would be facilitated.
being carried out in the State.
3.8 Innovation and Transformation Academy:
3.16 Business Networking and Promotional Events:
An academy for fostering Innovation in the State
The Government will promote and encourage
would be established in Tirupati. This would help
participation in various national and international
in institutionalizing the culture of entrepreneurship
events by the Industry and by leading a
in the State by providing leadership and
Government-industry business delegation to
entrepreneurship training.
identified Exhibitions and Conferences.
3.9 Entrepreneurship Boot-camps - College and Government would also undertake promotional
School Level Entrepreneurship Development Cells events and road shows at various locations from
(Boot Camps) may be created through pilot time to time. 50% (100% for SC / ST & women
incubators for creating support and awareness at entrepreneurs) reimbursement of the exhibition stall
local level inside the college campus itself.

31 | Booklet on ITE&C Department Policies, 2014-2020

 rental cost for participating in the notified national /
international exhibitions limited to 9 sq.m. of space
would be provided to the startups.

3.17 Digital Marketing: Advertisement and marketing

support subsidy will be provided for digital
marketing as most of the SMAC enterprises are
in the B2C space.

4. Funding - State Innovation Fund:

The Government will create an Initial Innovation Fund of

` 100 crore (1 billion) for entrepreneurs and businesses.

4.1 The Fund will be in the nature of Fund of Funds.

It does not invest directly into startup companies.
It shall participate in the Capital of SEBI approved
Venture Capital Funds, up to 15% as Limited
Partner. The VC Fund in turn is free to invest in
startups located in AP, basing on its own criteria.

4.2 The Fund would be professionally managed like a

PE / Venture Fund with Industry leaders on the
investment committee and would also leverage
support from private partners and the GoI.

4.3 The Fund would also support the establishment of

Pilot Incubators and Human Capital Developmental
Programs through Host Institutes approved by the
National Science and Technology Entreprenuership
Development Board, Government of India.

5. State Support:

A. Non-Fiscal Incentives

The fiscal and non-fiscal incentives applicable to all

categories of IT industry would be applicable to
startups backed by PE / VC funding would be
incubators, accelerators and startups. In addition,
created.
5.1 Effective Single-Window System: A highly
5.3 Awards for Innovation: Government will
empowered Single Window Clearance Unit
encourage innovation amongst the entrepreneurs
will be created and operationalized for granting
through Innovation awards. The focus of these
approvals and clearances to primarily first time and
awards will be mostly on innovative products
young entrepreneurs. A single window clearance
that attend to societal problems and would be
will be provided for VAT, Labour, Municipal and
awarded every year.
other local registrations and compliances. It would
be supported by a state-of-the-art centralized help 5.4 Technology Server & Software:
desk on 24x7 basis duly leveraging the e-Biz portal
set up by GoI. The objective of this window would 5.4.1 Cloud Server: Government would host a cloud
be to (a) reduce time to set up business and sever that would connect all the incubation centers
(b) reduce cost of doing business. across the State. This server would be available
to all the startups, at low or nominal costs.
5.2 Special provisions for Startups: In addition,
allocation of space will be provided to incubators 5.4.2 Enterprise Software & Device Testing Labs:
and startups on priority. Special dispensation for Based on the requirement, Government would

Booklet on ITE&C Department Policies, 2014-2020 | 32

 procure Enterprise versions of key software 5.5 Reimbursement of VAT/ CST: Reimbursement of
required for testing and other purposes at VAT / CST on goods supplied to the Incubator or
incubators. These software and labs can be incubatee and on sale or leasing of goods by
utilized by the companies in the incubation Incubator to incubatee would be provided.
space at nominal charges.

5.4.3 MIT FAB Labs: In order to promote education in

hardware manufacturing and creating prototypes 6. Governance of Innovation Policy
of hardware products a High-end FABLAB from
MIT (Boston, USA) would be setup at a Pilot 6.1 APInC: An empowered Andhra Pradesh
Incubator. Innovation Council (APInC) would be formed with
the representatives of industry, incubators and the
other stakeholders. APInC would administer the
incentives in a speedy, time-bound and transparent
B. Fiscal Incentives manner.

The incentives available for MSMEs in the IT policy 6.2 Empowered Mission for Innovation & Capacity
would also be directly applicable to the startups. Building: An empowered Mission would be
In addition to that: established to give a fillip to the development

33 | Booklet on ITE&C Department Policies, 2014-2020

 of the sector and take faster and agile decisions. 7.1.2 Provide guidance and support to arrange
The mission would be headed by a Technocrat infrastructure and other necessary support from
who has a proven record of promoting innovation time to time for the successful running of the
in technology areas. It would consist of 3 experts Incubator based on existing government policies
one each in e-Governance, Electronics and IT, in effect from time to time.
3 academicians and 3 representatives of Industry.
7.2 Role of Private Sector as Host Institute

7.2.1 Vision and Execution of Incubator.

7. Public Private Partnership Model
7.2.2 Organizational Responsibility and Management
The establishment of new incubators and accelerators of Incubator.
would be in PPP model to leverage the risk taking strength
of the Public Sector along with the execution skills of the 7.2.3 Establishing Support Ecosystems, Capital Asset
Private Sector. The roles and responsibilities of State Management and Resources as required for the
Government and Private Sector is outlined below. Incubator.

7.1 Role of State Government 7.2.4 Management of the Incubator on day-to-day basis.

7.1.1 Provide Administrative Guidance and Support 7.2.5 Private Partner will be responsible for creating a
to Private Partner for setting up Incubator. self-sustaining business model needed for the
execution of the Incubator after the support period

Booklet on ITE&C Department Policies, 2014-2020 | 34

 given to incubated startups which is maximum of 8. Establishment of Pilot Incubators in PPP Model
3 years in case of service startups and 5 years in
case of product startups from the date of their 8.1 Andhra Pradesh would be one of the first states in
entry into the Incubator. India to come out with a comprehensive Innovation
and Startup policy with a thrust on the PPP model
7.2.6 Shortfalls, if any, in revenue generation will be met of incubation. Thus, there are very few case studies
by the Private Partner post the support period. or models to learn from, and knowledge has to be
built with pilot experimental projects to create a
7.2.7 Private Partner will be responsible to find, nurture comprehensive roadmap for Innovation and
and support incubatee companies with a flexible Entrepreneurship in the State. As the Indian Startup
framework based on the changing incubatee Ecosystem is at a nascent stage, considerable
requirements in the Sector. support has to be provided by the State in terms of
infrastructure and policy support with program
7.2.8 Ensure pro-active participation of other Private execution and expertise leveraged from the private
Sector companies for the Incubator in terms of sector.
raising funds for the incubator and angel
investment for startups. 8.2 With a view to jump-start the Startup Ecosystem
in Andhra Pradesh, reputed Pilot Incubators (Host
Institutes), approved by the National Science and
Technology Entrepreneur Development Board,
Dept of Science & Technology, Govt of India,
will be selected on nomination basis and non-
exclusive basis to setup Pilot Incubators under the
Public Private Partnership model.

8.3 An appropriate selection mechanism shall be

created for the selection of Pilot Incubators
(Host Institutes).

8.4 Focus Areas - Initial forays for establishment of

pilot incubators would be within the areas of
Telecom and Mobile Internet
Internet of Things (IoT)
IT for X in the areas of Pharma, Oil & Gas,
Urban Management
Social Media, Mobility, Analytics and
Cloud Computing (SMAC)
Fabless Semiconductors
Animation & Gaming
Electronics
Entertainment
Visual Effects
Health and Medical Equipment
Sports and Fitness
Automotive

8.5 Performance Linked Assistance: Assistance at

`12,500 per month, for a maximum period of three
years per incubated startup company located in
the identified Incubation Center developed by the
State, would be provided to the Pilot Incubator
(Host Institute) approved under the Pilot Projects.
10% annual increase in performance linked
assistance would be provided.

35 | Booklet on ITE&C Department Policies, 2014-2020

 8.6 Physical Infrastructure and Essential companies and manufacturing (for hardware
Infrastructure: Fully furnished and ready-to-use companies) i.e.- Bootup Phase. Companies that
plug and play infrastructure along with computers have deployed their products in Andhra Pradesh
with 1 GBPS Internet connectivity, electricity, water, would then be given incentives as decided by the
security and other office facilities would be State Innovation Council to go National and
provided as infrastructure support from the International i.e.- Scaleup Phase.
State Government for the Pilot Incubators.
This Policy would be valid till 2020 unless modified.
8.7 Term and Duration: The Pilot Incubators which are
setup initially for five years. Based on a successful A customized index would be created to track the quality
performance review, they would be eligible for of innovation ecosystem over time in the State by
further support-based on learnings from the Pilot. benchmarking with the National and International levels.
The factors for this index would be drawn from renowned
international indices such as World Bank Knowledge
Economy Index, UNCTAD Innovation Capability Index,
9. Establishment of Startup - Bootup - Scaleup Model UNDP Technology Achievement Index, Arco Technology
for a Product Startup Nation Index, RAND Science and Technology Capacity Index,
European Innovation Scoreboard Summary Innovation
9.1 The Government has published on its portal, Index, WEF Global Competitive Index, World Business
(www.ap.gov.in) a Blueprint for development of IT, and INSEAD Global Innovation Index etc. Based on the
Electronics and e-Governance sectors in the State. performance on this index and other experiences in the
To realize this vision, the Government of Andhra implementation, this policy would be updated every year
Pradesh will seek to co-create a product nation in order to strengthen the software products culture and
in India and will work to bring cutting-edge policy ecosystem, crafting better polices and enabling the
recommendations necessary to enable the creation of market catalysts for the State of Andhra
creation of Indian-owned Global Technology Pradesh.
Companies based out of AP.
ITE&C Department shall issue appropriate Implementation
9.2 Government of AP will work with Industry / Operational Guidelines with simplified application
Associations for Software Product Industry proforma and procedure for claiming of the incentives.
to be recognized as a new Industry with NIC
(National Industrial Classification) Code.

9.3 The Government will act as market maker for giving

a massive fillip to the Software Product Industry.
In line with the State IT Policy, an Innovative
Startup-Bootup-Scale-up Model would be followed
for attracting cutting-edge Software Product
Startups to Andhra Pradesh by leveraging the
points of IT projects up to ` 50 Lakhs for Rural
Companies, up to ` 5 Cr. for MSMEs registered
in Andhra Pradesh and up to ` 50 Cr. per annum
proposals to be taken up suo moto using Swiss
Challenge.

.9.4 Time-bound approval of proposals in 4 weeks

would be given to Innovative Product Companies
to demonstrate their product(s) as Pilot projects
i.e., Startup Phase. Once the pilot is successful,
the Government would encourage companies
to do local product development for software

Booklet on ITE&C Department Policies, 2014-2020 | 36

www.apit.ap.gov.in
A.P. GOVERNMENT ORDERS
IT Policy - G.O. Ms. No.:13, dated: 11-08-2014 of ITE&C Dept.
Electronics Policy - G.O. Ms. No.:16, dated: 09-09-2014 of ITE&C Dept.
Innovation & Startup Policy - G.O. Ms. No.: 17, dated: 09-09-2014 of ITE&C Dept.

B. SREEDHAR, IAS
SECRETARY TO GOVERNMENT
Information Technology, Electronics
& Communications Department
Government of Andhra Pradesh
Room No. 6, 1st Floor, North H Block
A.P. Secretariat, Hyderabad - 500022 (India)
E-mail: [email protected]

www.apit.ap.gov.in

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