The Telangana government on Monday revealed a series of policies and initiatives to help promote startups and Information and Communication Technology (ICT) infrastructure in the state, reports Livemint.

The government plans to setup multiple incubators, seed funds, and industry-based initiatives for which it has signed Memorandum of Understanding (MoUs) and partnership agreements with various companies as well. It claims to have signed 28 ‘in-principle agreements’ or MoUs to help setup facilities and funds to create employment and to help spread ICT penetration among rural areas, added the report.

Initiatives for startups

Through initiatives dedicated to startups, (pdf) the government is aiming to support around 5,000 start-ups in the state, which includes 1,000 startups in the tech products space; 400 startups in the clean-tech space, and 300 startups in the electronics sector.

– The government said that it would develop a 1 million sq.ft. workspace dedicated to startups over the next five years. About one-third of this space (300,000 sq.ft.) would be developed as second phase of the T-Hub which can house at least 900 start-ups.

– It also plans to collaborate with 20 global accelerators and incubators to build ‘plug-and-play’ workspaces through a public-private partnership (PPP) mode.

-The government plans to float a Rs 2,000 crore innovation fund across different sectors and growth stages for startups, along with a separate plan to set up a Rs.250 crore seed fund.

Tax incentives and reimbursements:

-Reimbursement of service tax paid by startups incubated with the help of government supported incubators, wherein the annual turnover of the startup does not exceed Rs 50 lakhs for the first three years.

-Annual reimbursement of VAT/CST paid by all newly incubated startups for a period of the first three years. The reimbursement is applicable for up to a maximum of Rs 50 lakh turnover in the same period.

-The state government shall also reimburse 30% of the actual costs including international travel, subjected to maximum incentive amount of Rs 5 lakh per year.

-The cost of filing and prosecution of patent applications will be reimbursed to the incubated startups, subjected to a limit of Rs 2 lakh per Indian patent awarded. For foreign patents, up to Rs 10 lakh will be reimbursed.

-The government shall also offer recruitment assistance of Rs 10,000 per employee for the first year.

-Startups that record 15% year-on-year growth as per audit will be eligible for a 5% grant on turnover, subject to a limit of Rs 10 lakh during a period of three years from incubation.

Initiatives for industries

Electronic Industry: According to the government, Telangana is house to a large number of small-scale Electronic System Design and Manufacturing (ESDM) companies. For this, the state government plans to develop two electronic manufacturing clusters spread over 600 acres and 310 acres respectively in the state.

It aims to attract at least $3 billion in investments in the electronics sector, which it says has a potential to generate employment for 150,000 people over the next five years.

Gaming/Animation/Video Production: The government also revealed two separate policies for setting up ‘rural technology centres’ in order to increase penetration of ICT in rural areas. It plans to create a 600,000 sq.ft. facility dedicated to animation and gaming companies, digital film production houses and music and television studios.

The ICT policy is concentrated in tier II locations such as Warangal, Karimnagar and Nizamabad; it will also be providing some ‘additional benefits’, which will be released later by the state government. It also plans to build two incubators in tier-II locations under the ICT policy.

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