Haryana: Electronics System Design & Manufacturing(ESDM)

Vision: To position Haryana as a pre-eminent investment destination and facilitate balanced regional and sustainable development supported by a dynamic governance system, wide-scale adoption of innovation and technology, and skill development for nurturing entrepreneurship and generating employment opportunities. The Haryana IT and ESDM Policy aims to develop IT and ESDM sectors as key growth drivers for achieving the State’s Vision.

Mission: Make Haryana a clear destination of choice for investments in IT and ESDM sector Make IT and ESDM sector as the key enabler of equitable growth to spread prosperity and development across the State Develop MSMEs as the growth engine of economy  Become recognized leaders in the availability of high-quality talent pool in the sector Foster a culture of excellence in pioneering research, innovation and entrepreneurship Make technology as the enabler for doorstep delivery of citizen services.

Goal:

Haryana, one of the leading automobile and engineering hub of the country, is best poised to significantly contribute to the national vision for ESDM. Given its proximity to NCR, the abundance of local labor, and the availability of the maximum number of notified Brownfield Clusters provides an unmatched ecosystem for the industry.

The government of Haryana realizes the potential of the ESDM sector, thus the State has decided to launch a dedicated ESDM Policy for fast-paced sector growth. The policy focuses to attract private sector investment in the sector by offering lucrative incentives, a ready talent pool, SMART infrastructure, and above all a simplified regulatory regime.

Fiscal Incentives:

a. Capital Subsidy: State to provide 50% top-up of Capex support provided by DEITY to units set up in notified EMCs under M-SIPS of GoI. The support shall be provided to the first 10 Anchor units limited to a maximum of INR 10 Cr. per unit.

b. SGST Reimbursement: 100% reimbursement (net tax) subject to a maximum of 100% of Fixed Capital Investment – FCI for a period of:

• A Block – for 5 years
• B, C & D Block – for 10 years

c. Stamp Duty: ESDM units shall be eligible for 100% reimbursement of stamp duty paid on sale/lease deeds paid on the first transaction for setting up units in notified EHTPs or land earmarked by the State Government for the ESDM industry.

ESDM units shall be eligible for 100% reimbursement of stamp duty paid on sale/lease deeds paid on the first transaction for setting up units in B, C, D blocks.

d. Electricity Duty Exemption: 100% exemption for a period of 7 years from commercial operations.

e. Power Subsidy: ESDM industry shall be eligible for getting power @ INR 5.49 per unit* provided the investor signs Memorandum of Understanding – MoU with Government of Haryana for investments in the State.

The subsidy is restricted up to a certain level of consumption per industrial unit which shall be decided separately with approval of Hon’ble Chief Minister, Haryana.

f. For Mega Projects: Megaprojects shall be eligible for a Special package of incentives over and above the standard package for ESDM units shall be considered by the empowered committee on case to case basis.

g. Ultra megaprojects: Ultra-Mega Projects shall be offered a special package of incentives by the Haryana Enterprise Promotion Board including such as mixed land use, allotment of land at a price to be decided by the Government, etc.

Infrastructure Augmentation

a. Development of Electronic Manufacturing Clusters:

1. Government of Haryana shall earmark dedicated land parcels for Electronics Industry in Gurgaon district and across the KMP expressway.
2. In order to provide adequate support infrastructure in the Townships, there shall be reservation of 10% of land (consolidated) for common social infrastructure such as housing facilities, medical and sports facilities, schools, recreation facilities, etc. inclusive of all the townships – ITES & ESDM.
3. Fiscal assistance for developers: The State shall provide fiscal assistance up to 50% of the project cost with a maximum of INR 25 Cr. Project cost to include development of basic infrastructure, essential service, welfare services, support services such as Centre of Excellence (R&D, incubation and consultancy services),Training Facility, IT infrastructure etc, Manufacturing support infrastructure such as Tool Room, CAD/ CAM design house, Plastic Moulding, Sheet Metal Stamping, Packaging / Epoxy Suppliers, Testing and Certification Facility, Component testing etc. The benefit of the State contribution shall be passed by the developing agency to the allottees.
4. EDC Charges: The applicable rate shall be internal rate of HSIIDC. Further, HSIIDC may extend External Development Services to plots / land parcels adjoining to HSIIDC land by charging applicable HSIIDC EDC.
5. EDC to include last mile connectivity for road, water, power and bandwidth.
6. The developer shall be entitled to get 100% reimbursement of the stamp duty as well as registration fee paid by them to the Government of Haryana, towards lease/sale/transfer of land earmarked electronics industry

b. Conducting focused Marketing events/Roadshows:

1. The Government shall promote and encourage participation from industry in various national and international events, exhibitions and conferences. Government would also undertake various promotional events and road shows at various locations from time to time.
2. The State shall be conducting roadshows to attract private sector investments from target countries in the next 2 years.

MSME

As India gears up to retrace the high growth path, its MSME sector assumes a pivotal role in driving the growth engine. With 3.6 Cr. units spread across the country, that employ 8.05 Cr. people, Micro, Small, and Medium Enterprises (MSME) have a contribution of 37.5 percent to the country’s GDP.

The significance of MSMEs is attributable to their caliber for employment generation, low capital and technology requirement, promotion of industrial development in rural areas, use of traditional or inherited skills, use of local resources, mobilization of resources, and exportability of products.

The State has about 1670 Large and Medium Enterprises which have approx. investments of INR 49,000 Cr. and generated employment for 3.36 Lac persons. Besides, there are around 90,000 MSMEs with total investment exceeding INR 15,000 Cr. and employing more than 8.90 Lacs persons. It is evident that the bulk of employment is generated by MSMEs. With the unemployment rate at 4.8%, it is imperative to focus on the MSMEs for the creation of employment opportunities and to revitalize economic growth.

With a view to providing focused attention on the MSMEs, the need for the inclusion of a separate chapter on MSMEs has become imperative.

Fiscal Incentives:

1. Mother-Vendor unit linkages: Vendor units will be treated at par with Anchor units for availing incentives under this policy, provided Vendor is located on the same earmarked land as Anchor unit, and supplies 75% of its end product to Anchor unit. This benefit is only for ESDM enterprises.
2. Interest Subsidy: @ 6% for Micro, Small & Medium Enterprises on term loan or maximum up to INR 10 Lacs per year for 8 years across State & shall not exceed amount of net SGST paid during the relevant year
3. Access to Finance:
4. Credit Rating expenses exemption (fiscal): Reimbursement of the expenses incurred towards the credit rating to the extent of 75% or maximum of INR 2 Lacs for Micro and Small enterprises carried out by SIDBI /Govt. accredited credit rating agency.
5. The State Government shall contribute an amount of INR 100 Cr. in CGTMSE fund, which will provide window opportunities to new as well as existing Micro and Small Enterprises for availing collateral free loan to the extent of INR 1 Cr. from Lending Institutions.
6. Property Tax exemption: The MSME units shall be exempted from payment of Property Tax for a period of 10 years.
7. Technology Acquisition: 50% of cost for adopting technology from recognized National Institutes, maximum of INR 1 Cr. The benefit can be availed only once in a period of three years.
8. Testing Equipment Assistance: In order to ensure ‘Zero Defect’ in the quality of products to make globally competitive, the financial support of 50% as subsidy or maximum of Rs. 5 lac for the purchase of testing equipments shall be provided to Micro and Small Enterprises.
9. Energy Audit: 75% reimbursement or maximum of INR 2 Lacs for conducting energy audit. Also 50% subsidy on cost of capital equipment required for undertaking measures to conserve energy, subject to maximum of INR 20 Lacs. This benefit is only for ESDM enterprises.
10. Water Audit: 75% reimbursement of cost of Water audit subject to maximum of INR 1 Lacs. Also subsidy up to 50% or maximum of INR 20 Lacs on the cost of capital equipment required for Water Conservation/ Harvesting System. This benefit is only for ESDM enterprises.
11. Safety Audit: 75% reimbursement of expenses incurred on safety audit subject to maximum of INR 1 Lacs for conducting safety audit. Also 50% subsidy on cost of capital equipment required for undertaking safety measures, subject to maximum of INR 5 Lacs. This benefit is only for ESDM enterprises.
12. Business Development Support: Government will encourage the MSMEs to participate from industry in various national and international events, exhibitions and conferences for enhance awareness and exposure to leading business practices.
13. For select exhibitions within the country – complete reimbursement of participation charges for space of maximum size up to 9 sq. m.
14. For select international fairs – 75% space charges, shipment of exhibits, cost of product literature, display material or maximum up to INR 5 Lacs and air fare by economy class up to INR 1 Lacs per year.
15. Patent Fee Reimbursement: 50% assistance in cost of filing of patents subject to a limit of INR 10 Lacs for domestic patents awarded and INR 25 Lacs for international patents awarded.
16. Quality Certification Fee Reimbursement: 50% reimbursement of cost of quality certification fee within the overall ceiling of INR 6 Lacs in 5 years (with maximum of 3 industry standard quality certifications).
17. Assistance in Participation of Fair/Exhibition: Assistance to Industry Associations for participation in International Trade Fair as Haryana Pavilion outside India @50% of total rent and subject to a maximum limit of INR 10 Lacs.
18. Awards for Outstanding Contribution: Outstanding Entrepreneurship State Awards shall be provided to Micro and Small Enterprises of Rs. 3 Lacs each separately for growth in production and profit, for innovation & development of new products, quality products and lean manufacturing techniques in ESDM sector.

The unit once selected for the award shall not be considered again during the next 5 years. The State Government will develop a rules/mechanism to assess the performance of entrepreneurs.

Startups

India is currently placed 3rd on the global list of the top five startup communities. The country has been able to establish a strong footprint in becoming a globally recognized Startup Nation. Several Indian companies that started as humble startup have been able to make a mark in the global investor fraternity.

India is a young country having a considerable population in the age bracket of 25-35 years. It is the energy and enthusiasm of this youth which is the real driving force behind the entrepreneurial and Startup success. The perfect blend of rising aspirations of youth, courage to pursue their interest, and the enterprising bent of mind is helping the country to emerge as the leaders of new-age entrepreneurship.

The government is keen to channelize this energy by providing the right ecosystem, proactive policies, and ready talent pool to the budding entrepreneurs.

It is observed further that the focus of these startups tends to be on information technology-enabled products and services including e-commerce, mobile applications, market aggregators, analytics, Internet of Things, health-tech, and digital wallets, etc. Therefore, it is imperative for the policymakers of the IT-ESDM sector to place Startups and entrepreneurship at the core of policymaking. Haryana is the homeland of various new-age entrepreneurs and is the birthplace of the most successful business persons and large industrial houses of India. Gurgaon the IT city of Haryana, has evolved as a technology startup hub of India and has nurtured many successful startups, which now have become big brands.

The Government of Haryana is keen to further harness the potential of young entrepreneurs by developing infrastructure and maximum convergence by linking initiatives with the larger perspectives of GoI initiatives including Digital India, Make in India, Standup & Startup India, and Skill India.

Ecosystem Development

a. Gurgaon an Entrepreneurial Hub:

The Government of Haryana’s efforts at creating Gurgaon a Millennium City with world-class business facilities has been successful at large. The geographical location advantage of Gurgaon needs to be further accentuated/augmented by creating a complete ecosystem for Startups at Gurgaon with the potential to drive the next wave of innovation in the State.

The Government of Haryana in close coordination with the Government of India (GoI) and Industry has envisaged work towards making Gurgaon an entrepreneurship hub of the country. The integrated State-of-the-art infrastructure, centers of Excellence, and a complete ecosystem would be developed keeping in view the national agenda to strengthen the nation by making a headstart and compete globally.

1. Global Startup Destination Centre at Gurgaon:

The Government strives to develop a Global Startup destination center at Gurgaon with an aim to provide a favorable ecosystem with world-class facilities for startups used for co-working spaces, meetings, mentoring, networking sessions, conferences, and provide access to mentors, investors, and academia under one roof.

The proposed setup will be developed in a phased manner and the Government of Haryana has already identified approx. 5 acres of space in Gurgaon to be developed in the first phase and which will be further supplemented in different phases as per the requirement. The core responsibilities of the Global Startup Destination Centre at Gurgaon shall be to provide the necessary infrastructure, learning mechanism for building & scaling an innovative product, conducting statewide workshops/seminars in collaboration with private players, educational institutions, partner with reputed institutions and companies from across the globe to create an ecosystem that attracts more new economy players to establish a base in the State.

The Proposed center to provide plug and play infrastructure to startups cutting across different sectors and in different locations of the State.

• Execute partnerships with global accelerators, private companies, trade associations, foreign governments, think tanks and non-government organizations for building a model mentorship platform offering a range of expertise that can make Centre a creative and innovation powerhouse.
• Execute partnerships with globally recognized startups that based in the state and in an endeavor to create learning systems that help local startups scale globally.
• Attract the best startups and entrepreneur organizations from across the world to Gurgaon

II. Further to promote Gurgaon as a Startup hub, the Government of Haryana has identified approx.30,000 sq.ft. which is to be further supplemented and envisages to develop multiple state-of-the-art Centers of Excellence of international standards suiting to the requirements of the IT / ITES and ESDM Industry. The idea is to connect, co-locate & interlink the centers for convergence, maximum utilization & productive outcomes.

In line with the aim to make Gurgaon a Startup hub, the policy proposes to develop Centers of Excellence for NASSCOM startup warehouse, mobile application development, Internet of Things (CoE-IoT), ESDM Incubation, Mobile Designing, etc. at Gurgaon.

1. Startup Warehouse Incubation Centre at Gurgaon: Startup Warehouse Incubation Centre cum innovation campus in Hub and Spoke Model at Gurgaon shall be setup in collaboration with NASSCOM with an investment of INR 4 Cr. and operational expenditure of INR 1 Cr. per annum for 3 years. The Government will endeavor to create world-class shared infrastructure for technology startups to operate at nominal cost till it achieves self-sufficiency. The Government shall setup up a Startup warehouse incubation centre with following objectives:
2. To reduce the cost burden of the Startups by providing office space for carrying out their operations during initial stages;
3. To provide access to various other stakeholders of the startup ecosystem, most importantly, VCs and PEs to help the startups secure requisite funding support;
4. To build and encourage growth of entrepreneurial and innovation capabilities in the State by providing effective mentoring and guidance support especially to the student startups in the State;
5. To establish an avenue responsible for liaisioning with the Government of India’s Startup India initiative;
6. To construct a vibrant community to effectively link various stakeholders of startup ecosystem such as investors, mentors, entrepreneurs, incubators, etc.;
7. To create substantial awareness about tech-entrepreneurship as a rewarding and preferred career option; and 39
8. To offer affordable co-working space to the aspiring entrepreneurs thereby enabling Gurgaon to become one of the preferred destinations for the startups in the country.

The proposed setup would provide an all-encompassing avenue to the stakeholders such as Startups, Incubators & Accelerators, Investors, Industry and Regulatory Bodies, Educational Institutes, Financial Institutions, etc. to address their startup ecosystem-related needs and challenges. It shall provide handholding support such as advisory, funding, networking & access to market, legal, regulatory & compliance, and infrastructure support to startups/entrepreneurs in ideation, prototyping, and commercialization of their ideas. It shall provide services across IT & ITeS sectors and various related sub-sectors such as Data Analytics, Cloud Computing, Internet of Things, Document processing, Data Entry and processing, Data Warehousing, IT Help Desk services, Enterprise Resource Planning, Telecommunication service, Telemarketing services, etc. to MSMEs / startups.

The Government would facilitate the creation of support infrastructure for the development of the innovation ecosystem to attract new entrepreneurs. The Startup warehouse shall be set up to offer shared office space to startups and entrepreneurs in a plug and play format which will include physical space, meeting space, operational facilities including 24*7 & 100% power backup, Leased internet line, Clean drinking water, Air- conditioning, etc., common facilities including a Lecture room, classrooms, rooms for administrative activities of the Warehouse, fully equipped labs, Cafeteria, Reception/ waiting area, etc.

II) Further, the State government shall be identifying 7 universities as Host institutes and setting up incubators in each of these 7 universities, with the financial assistance of INR 30 lacs per university for a period of 3 years. For high-performing university incubators, the government may consider extending the opening grant for additional 2 years. A transparent evaluation matrix shall be developed in consultation with the stakeholders for purpose of assessing the performance of incubators. The Incubation Centres housed in some of the well-known Universities would provide the following benefits to the budding student entrepreneurs:

• Customized content on entrepreneurship;
• Meaningful insights supported with well documents reports and data;
• Personalized and interactive learning;
• Awareness and Knowledge building on entrepreneurship;
• Access to Industry experts;
• Hands on experience on OLMS (Online Learning Management System) on latest technology platforms on Cloud; etc.

Centre of Excellence for Internet of Things –CoE – IoT: The government of Haryana endeavors to develop a Centre of Excellence for Internet of Things (CoE – IoT) to encourage the startups to work on the technical design to product prototyping by way of democratizing innovation in collaboration with academic / industry partners. In the proposed setup different programs for Startups/entrepreneurs to incubate, prototype creation and validation of IoT products shall be run and Enterprises under CoE programs will be connected to Virtual Corporate Accelerator and an External innovation lab. The CoE-IoT Incubation Program will act as a catalyst to accelerate the efforts of the startups for growth. The salient features of the Centre of Excellence.

ESDM Incubation Centre: The Policy proposes to set up a State-of-the-Art ESDM Incubation Centre at Gurgaon with an aim to enhance the competitiveness of Startups / MSMEs by improving their access to technology and business advisory services. The ESDM Incubation Centre proposes to provide services across the value chain for the ESDM sector for all sub-sectors, with key areas for specialization such as Medical Electronics, Industrial Electronics, etc. Assembly, prototyping, testing, and calibration of electronics; Consultancy services for product design and development, manufacturing, and innovations in process and productivity; Manufacturing incubation services; and 42 training would be the prominent activities to be undertaken by the proposed incubation center.

Centre of Excellence for Mobile Designing: The Government of Haryana envisages developing the first of its kind in the country, the State-of-the-Art Centre of Excellence for Mobile Designing at Gurgaon. The Centre to have world-class facilities including plug and play infrastructure, R&D labs, testing labs, latest equipment and tools, Training Centre, mentor support and exchange program, etc. Through the center, various high-end mobile design courses covering design architecture, Hardware anatomy, Software design and protocols, Product design, internal modules, components, and circuits, etc. would be executed.