1. Telangana IT-BPO and Rural Technology Policies September 2016

2. Context Telangana has launched its ICT Policy on April 4 th 2016 Technology has evolved to primary industry within the state contributing to 49% of the exports and 18% of the GDP for the state. With the evolutionary history of the technology, the requirements of the ICT companies has been evolving. Hence, the focus of the policy has to keep pace with the current market trends. The objective of the policy is therefore : –to facilitate and ensure growth of the ICT sector and –employment generation, –Augment the Gross State Domestic Product (GSDP) –Promote overall socio-economic development of the State. 2

3. Agenda Background Key focus areas of the Rural Technology Policy Detailed Incentives A Few Success Stories 3

4. The following kind of support is usually required by companies: Key Success FactorsExpectations from the Govt. Indian technology services Industry Cost arbitrage Process Orientation Technology capability in the talent Land, power, IT training Expansion of the Global companies Extend business opportunities in the state Talent availability Govt. led Infrastructure (Built-up) Cosmopolitan place for immigration R&D driven disruptions Quality of the talent Encourage R&D across public and private sector Area to pilot and extend business opportunities Preferential treatment for pilot and deployment. (Like Cisco) Patent benefits, publication benefits Process oriented Offerings Cost arbitrage Process orientation & domain knowledge Foreign language neutrality and orientation Connectivity Land, power, Process training, language skills Domain knowledge Cosmopolitan outlook SMAC driven disruption Ecosystem of the investors, large technology companies, start-ups and mentors. Technology infrastructure of cloud, For global companies, quality of the cutting edge talent as well as the ecosystem Start-up incubator Technology adoption at the grass- root levels 4 Telangana’s ICT Policy has successfully matched these needs with the initiatives and incentives proposed in the policy.

5. To enable this support and de-congest the cities, Telangana plans to equip rural areas to cater to some of these needs. Rural areas offer significant advantage in terms of cost of living, operations cost, low cost skilled human resources, low commute time, etc. Investments in these locations account to 25% more savings, as compared to large cities Given the location specific advantages and availability of large talent pool in rural areas, the Government of Telangana wants to develop rural areas in emerging Technology Centers to aid wealth and job creation 5 Telangana now has a separate policy on Rural Technology that caters to Mandals and Panchayats and a policy focussing on Tier 1 and Tier 2 Cities (sub-section of ICT Policy Framework)

6. Being a well-connected and compact State, Telangana can spread into Tier II cities and rural areas with ease. 6 All district headquarters are connected to Hyderabad by 4 lane Highways. The Average distance between the district headquarters and Hyderabad is 150km. Therefore, an ecosystem with Hyderabad as a hub with Tier II cities and rural areas at its contours will be ideal.

7. Agenda Background Key focus areas of the Rural Technology Policy Detailed Incentives A Few Success Stories 7

8. 8 Goals Develop one Rural Technology Centre in each of the 10 districts of the state Provide employment to at least 2,500 people through Rural Technology Centres Train 10,000 rural youth through TASK with the skills required by Rural Technology Centres Areas of Contribution Data processing, entry, management and document digitization Voice related services that offer inbound call support HR services, financial accounting, legal support and web marketing Qualification Criterion Centre should be set up either in a Mandal, Taluk or Village Panchayat level Population of the Madal/Taluk/Village must be less than 50,000 Location of the IT centre should be at least 50 Km away from the nearest city The rural technology policy aims to push basic services to rural areas to increase bandwidth of cities to focus on disruptive technologies.

9. Agenda Background Key focus areas of the Rural Technology Policy Detailed Incentives A Few Success Stories 9

10. Incentives Offered in Tier II Locations under the ICT Policy (1/2) 10 S. No.IncentiveDetails 1Municipal Taxes Reimbursement of municipal taxes for first three years of operation for first 5 IT Companies and IT parks in each town. 2Promotions Support Reimbursement / sponsorship of IT events up to a maximum of Rs. 5 Lakhs or 50% of the event cost, whichever is lower 50% exhibition stall rental cost or Rs. 50,000, whichever is lower, limited to 9 sq. m. of space, for participating in notified exhibitions 3Power The Government shall ensure uninterrupted supply of electricity at industrial tariff. Additionally, Companies will be permitted to avail renewable energy under open access system from within the state after paying cost component to DISCOMs as fixed by ERC (subject to a maximum of one third of their total power requirements)

11. 11 Incentives Offered in Tier II Locations under the ICT Policy (2/2) S. No.IncentiveDetails 4 Workforce Development The Government of Telangana will create Non-IT skill development centre in Tier 2 city to train work force for support functions. The Government will conduct Faculty Development program for colleges and training institutions located in that area. Recruitment Assistance at the rate of Rs. 20,000 per employee for a minimum annual recruitment of 50 new IT professionals from the colleges located in Telangana. Rs. 10 Lakhs subsidy to first 5 anchor units employing more than 250 IT and 500 ITeS employees All the above incentives are in addition to other general incentives proposed under the ICT Policy.

12. Incentives Offered under the Rural Technology Policy (1/2) S. No.IncentiveDetails 1Panchayat Taxes Reimbursement of Panchayat taxes for first 3 years of operation for first 5 IT companies 2Promotions Support Reimbursement / sponsorship of IT events up to a maximum of Rs. 5 Lakhs or 50% of the event cost, whichever is lower 50% exhibition stall rental cost or Rs. 50,000, whichever is lower, limited to 9 sq. m. of space, for participating in notified exhibitions 3Power Reimbursement at Rs. 1 per unit for 5 years, with a maximum amount of Rs. 10,000 per month 4Capital Subsidy 50% investment subsidy on fixed capital investment, with a maximum limit per unit of Rs. 40 Lakhs limited to first 3 companies 5Rental Subsidy 25% rental subsidy for 3 years to first 3 companies, followed by 10% to rest of the companies 12

13. Incentives Offered under the Rural Technology Policy (2/2) S. No.IncentiveDetails 6 Internet and Telephone 25% reimbursement on internet and telephone charges for the first 3 years of operations 7Duty Exemption 100% exemption from payment of SD/EMD and cost of tender document 8 Workforce Development TASK shall create skill development centres and faculty development programs for colleges and training institutions Training subsidy of Rs. 2,500/month/person for 6 months Recruitment assistance at the rate of Rs. 20,000 per employee for a minimum annual recruitment of 50 new IT professionals from the colleges located in Telagnana Rs. 10 Lakhs subsidy to bridge the viability gap for first year for first 3 anchor units across all locations 13 All the above incentives are in addition to those proposed under the ICT Policy.

14. Agenda Background Key focus areas of the Rural Technology Policy Detailed Incentives A Few Success Stories 14

15. ECLAT Health Solutions, a provider of healthcare support services, has launched a delivery center in Karimnagar. The company currently has 3 offices in US and 3 delivery centers in India (Hyderabad, Chennai and Karimnagar). In support from Telangana govt, company piloted Karimnagar operations with just 10 associates and now has plan to add 1000 more associates in the next 2 year’s time. 15 ECLAT Health Solutions, headquartered in Virginia, US, is one of the leading providers of medical coding and analytic services, out of India. ECLAT has the privilege of rendering services to 5 of the top 20 hospital systems in the US.

16. Likewise, Warangal has also seen significant activity. Ventois Software Solutions recently launched a 30-seater BPO unit and provides Data Warehousing, IT services etc. Warangal being announced as a smart city and presence of large players will definitely spur activity in this segment further in the near future. An IT Incubation Centre has also been launched in the Industrial Estate in Madikonda. 16

17. Telekha Networking Technologies launched at Huzurabad, Vonkdoth Software Solutions launched at Jangaon Telekha Networking Technologies is a startup based out of Huzurabad and offers services such as web-development and app-development. It was launched on August 17 th 2016 in Huzurabad. Vonkdoth Software Solutions is another similar firm that has presence not only in India but in the UK as well, and has its operational office in Jangaon. 17

18. For further details and assistance… Amarnath Reddy CRO, ITE&C Department, Telangana cro@telangana.gov.in 18

19. Thank You 19