The government of Andhra Pradesh with an objective to attract prospective job creators has brought a policy for Global In-house centers (GICs). These centres would be introduced in public private partnership mode making it easy for the entry of multinational companies. The decision taken in the cabinet meeting last week will boost the industrial sector as the government envisages to get 2500 rupees crore investments and 50,000 employment from this policy.
The TDP government previously announced three separate policies for IT, electronics and startups. In the current IT policy, the government can give incentives only to IT companies and not infra developers. Consequently, the IT department upheld that it was essential to have a separate policy framework for GICs.
As there is no considerable infrastructure for GICs, through joint-venture (JV) projects the government will support the development of office space and other infrastructure. As per the policy APIIC will hold 10-26percent of equity in a special purpose vehicle that will be set up jointly with a private sector project proponent. The proponent to get into the JV must have experience building at least 10 lakh square feet of cumulative office space for GICs to be eligible. This proponent has to bring at least 500crore rupees investment such that it not only enables the creation of 500 jobs per acre of land allotment, but also translates into a minimum investment of 50crore rupees. The project should be estimated with a minimum built up area of 1 lakh square feet per acre.
GICs are offshore centers that perform designated functions for large organizations and have become an integral component of the fast-growing Indian IT-ITES sector. Approximately 21percent GICs of 1050 in India are in Hyderabad. With IT-ITES sector being concentrated only in Hyderabad, post the state bifurcation Andhra Pradesh has to start over again in creating ecosystems.
