Punjab’s IT Initiatives

With the infotech industry one of the profit making sections of the state’s economy, new
initiatives are on the anvil.

With a number of incentives likely
to be announced in the forthcoming budget, Punjab seems all set to take its first big step
on the IT road. According to reliable sources, it plans to spend around 1% of the
budget-about Rs25 crore-on the development of the IT industry in the state.

According to the same source, the state government has decided to give ‘A’ category
incentives to the IT units in small, medium and large-scale sectors, irrespective of the
location. Following is the list of major incentives expected to be announced:

* 100% Octroi exemption on components and products to IT units for a period of 10 years.
There is also an exemption from sales-tax wherever applicable, for a period of 10 years.

* After the expiry of initial five years, sales tax would amount to 2% for hardware, 1%
for packaged software and 0% for customized software for the next five years.

* There is also a plan to make all IT units eligible for capital subsidy, amounting to 30%
of capital investment, subject to Rs50 lakh ceiling. An IT unit with more than 20
employees would be eligible for a generator set subsidy of 50% of the cost of the capital
generator set, subject to a maximum limit of Rs15 lakh.

* The government would also be announcing a subsidy on IT in Gurmukhi script which would
be 5% of the total turnover every year, subject to a maximum of Rs5 lakh per year for a
period of three years.

* The IT units having more than 20 employees would be exempted from electricity duty for a
period of 10 years.

* IT companies, other than those coming in the hardware segment, would be allowed to open
offices in the residential areas.

* In order to make computers an integral part of common man’s life, the government plans
to introduce IT as a compulsory subject in all non-engineering degree level colleges from
the coming session.

* The state government plans to implement a Personal Management System, a package prepared
by Tata Consultancy Services, in the Main and Mini Secretariats. The government is also
aiming at achieving 30% penetration of internet in the next two years and thereafter 20%
penetration every year to cover all government offices with the ninth five year plan.

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