Information Technology Industry is one of the fastest growing industries. It has been identified as one of the thrust areas for the industrial growth of Pondicherry. The Information Technology Policy announced by the Government of Pondicherry has emphasized the need to accelerate the development of IT industries in this Union Territory. Suitable infrastructure such as Software Technology Park, Earth Station and Electronic Industrial Estate are set up to enable growth of the IT industry in Pondicherry.

In order to accelerate the growth of IT industries in this Union Territory the following incentives/concessions to new IT industries and for expansion of existing IT industries are provided.

1. Industries & Commerce Department :

a) Fixed investment subsidy on plant and machinery at the rate of 20% subject to a maximum of Rs.20-00 lakhs.

b) Subsidy on Captive power generation sets to the extent of 50% of the cost subject to a maximum of Rs.5-00 lakhs, for new IT units which are located in authorized industrial areas but are unable to get reliable power supply.

c) Subsidy on leased line rental payable to the extent of 50% for first 3 years; 20% for fourth year and 10% for fifth year.

d) IT Software and IT Service Companies are exempted from routine inspection.

2. Pondicherry Industrial Promotion Development and Investment Corporation Limited (PIPDIC) :

PIPDIC will offer the following incentives :-

a) Equity contribution for IT related industries

PIPDIC may participate in the equity of the company to the extent of 15% of the total equity up from the existing level of 10% of total equity or the amount of promoter's contribution whichever is less.

b) Reduction is Margin Money

IT will be able to avail loans with reduced margin money due to modification of the existing policy relating to debt equity ratio. The debt equity ratio of 3:1 will be applicable to loans upto Rs.20-00 lakhs instead of the present level of Rs.10-00 lakhs. In respect of loans above Rs.20-00 lakhs, the debt equity ratio will be 2:1 instead of 1.5:1.

c) Reduction of Interest rate

For the loans extended to IT industries there will be a reduction in the interest rate by 0.5% per annum from the normal rate applicable.

d) Venture capital/Seed capital assistance

The Corporation will formulate and implement a venture capital/seed capital assistance scheme.

3. Commercial Taxes Department :

Sales Tax is exempted for the sale of goods manufactured by all the IT industries located in the U.T. of Pondicherry for a period of 10 years vide G.O.Ms.No.78/99/F2 dated 31-12-1999 of Finance Department, Government of Pondicherry.

4. Town and Country Planning Department & Pondicherry Planning Authority :

a) Relaxation of locational restrictions

Information Technology and related industrial units engaged in software services and training are exempted from locational restrictions (Orders issued by Chief Secretariat (Environment) vide G.O.Ms.No.24/2000-Envt dated 30-10-2000 od Chief Secretariat (Environment).

b) Relaxation of Floor Space Index (FSI)

Relaxation of Floor Area Ratio to the extent of 50% will be given to the units setup outside the urban areas. Orders will be issued separately giving details of the areas in which the above concession would be available.

5. Department of Science Technology and Environment :

Software Industries are exempted from obtaining NOC from pollution angle as per orders issued by the Chief Secretariat (Environment Department), Government of Pondicherry vide G.O.Ms.No.24/2000-Envt., dated 30-10-2000 of the Chief Secretariat (Environment)

6. Labour Department

Permission to run 3 shift operations for the IT Industries will be granted by the Labour Department subject to the provision for other facilities such as one day off, facilities to women workers, etc. Knowledge based industries in the U.T. of Pondicherry have been exempted from the relevant provisions of the Shops and Establishment Act and Rules, 1964 as contained in Labour Department G.O.Ms.No.6 dated 03-02-2001.

7. Local Administration Department :

Commercial buildings which are fully dedicated to IT industries will be exempted from land and building Tax for a period of 5 years.

8. Revenue Department :

Stamp Duty on

i) Sale/lease of property in the Software Technology Park (STP) leased by the PIPDIC; and

ii) Agreement made for availing term loans sanctioned by the PIPDIC for units located in the STP will be exempted.

9. Electricity Department :

Power supply and priority in sanctioning and connecting power for It industries will be extended by the Electricity Department in the IT corridor and other selected areas identified from time to time for locating IT industries.

10. Establishment of IT Corridor :

The stretch of East Coast Road starting from Siddhanandasamy Temple Junction to Ariyankuppam will be declared as an IT Corridor. The concerned departments will take necessary steps to provide necessary infrastructure facilities like road, power, water supply, telecommunications, etc. at this location.

11. Eligibility Criteria :

For the purpose of the incentives offered, under this notification IT industries will mean and include those industries producing IT software products or products mentioned in the Annexure. New industries will mean and include those industries which apply for Provisional Registration/No Objection Certificate from the Industries Department, Government of Pondicherry after the issue of this notification.

These incentives/concessions will be available to new IT industries and to existing IT going in for substantial expansion.

The terms and conditions governing the extent of concessions/incentives and the procedure to be followed for extending the concessions/incentives by the various departments/organizations concerned.

The decision of the Secretary to Government of Pondicherry for the Industries & Commerce Department as to the eligibility of any unit for the concessions/incentives outlined herein and the extent thereof shall be final.