Kerala IT Industry Policy, 2001

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Kerala IT Industry Policy, 2001
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What the new IT Industry Policy seeks to achieve?

• Provide a custom regulatory/labour framework for
  IT/ITES Industry
• Provide an enabling framework for attracting
  private sector investment in the IT industry, and
  IT infrastructure creation and IT education in
  particular.
• Recognise and leverage the States Communication
  Infrastructure as a unique competitive strength
• Provide the best enabling conditions for
  accelerated growth of ITES industry in the State
  spurring employment generation
• Articulate and implement a HRD strategy that
  meets industry needs
• Encourage/Strengthen local IT industry/companies
• Encourage IT/Electronic Supply Chain Management
  Operations
• Accountability in implementation
• Recognise the holistic role of IT in transforming
  the socio-economic fabric of the State

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Indias First Tailor-made Regulatory Framework
for IT Industry
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Fundamental Measures

• A. IT Software industry units deemed
  establishment under Kerala Shops and
  Commercial Establishments Act, 1960, with
  simultaneous exemption in respect of the
  following
•            I. Working hours stipulation under
  Section 6 of the Act. This shall enable
  Flexitime operation.
•           II. Employment of female employees
  between 7 PM and 6 AM, under Section 20 of the
  Act
•          III. Spread Over, under Section 9 of
  the Act.
• IV. Opening and closing hours, under
  Section 10 of the Act.
• V. Closing of establishment and grant of
  weekly holidays, under Section 11 of the Act
• Power tariff as applicable for Industrial
  consumers
•  
• General Permission for Three Shift Operation by
  IT Software industry
• IT Industry to be declared Public Utility
  Services under the Industrial Disputes Act,
  1947.
• D. The presence and activity of head load
  workers on the premises of the IT industry
  establishments, as well as state promoted IT
  Parks in general, shall be regulated through
  specific legislation to ensure smooth,
  undisturbed functioning of the IT industry.
•  
• KERALA IS THE FIRST STATE IN THE COUNTRY TO
  IMPLEMENT THESE MEASURES
•   

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Self Certification

• Government shall permit self-certification, to
  the extent possible, of IT industry in respect of
  the following Acts/Regulations
•  i.     Payment of Wages Act
• ii.     Minimum Wages Act
• iii.     Contract Labour (Regulation
  Abolition) Act
•  iv.     Workmens Compensation Act
• v.    Employees State Insurance Act
•  vi.     Employment Exchanges Compulsory
  Notification of Vacancies Act
• vii.    Kerala Shops and Commercial
  Establishments Act
• viii.   Payment of Gratuity Act
•   ix.    Kerala Casual, Temporary, Badli Workers
  (Wages) Act
• KERALA IS THE FIRST STATE IN THE COUNTRY TO
  IMPLEMENT THESE MEASURES

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Other Progressive Regulatory Enablers

• Government to make special provisions for
  part-time employment in IT industry.
• Government to make special provisions to
  encourage tele-commuting
• Direct and Indirect Child Labour prohibited in IT
  industry
• KERALA IS THE FIRST STATE IN THE COUNTRY TO
  IMPLEMENT THESE MEASURES

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Leveraging Indias Best Information
Infrastructure
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Riding the Information Super Highway

• The Kochi International Gateway with 2 Submarine
  Cable landings shall be leveraged to Keralas
  benefit using the 100 Digital Information
  Infrastructure backbone in the State
• Quality of Service, Last Mile Access, Cost the
  new mantra
• Bandwidth intensive IT and ITES industries can
  enjoy in Kerala the best quality of
  communication services at the lowest cost

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HRD for IT Industry
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Primary measures for HRD

• Educational Grid initiative to upgrade the
  quality of course content and teaching in
  professional colleges in the State
• Media Information and Resource Centre for
  Education to be set up at IIITM-K
• Professional education thrown open to private
  sector
• Course content in engineering colleges, ITIs and
  polytechnics to be reviewed
• International Business School at Kochi within 3
  years
• IT industry specific career aptitude assessment
  program
• Minimum guidelines for training institutions
  within the State to be formulated

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HRD for ITES Industry

• State-wide initiative covering clear target
  groups to spur
• English language skills
• Communication and soft skills
• Accent neutralisation
• Basic IT skills
• ITES sub-domain level training
• Training to be made an integral part of
  college/school education
• Objective to ensure adequate and ready pool of
  manpower with higher degree of orientation to,
  and awareness of ITES industry requirements

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Infrastructure for the IT Industry
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Spurring Infrastructure Creation

• New category IT Industry created under Kerala
  Building Rules
• FAR of 5 for new built-up space meant for IT
  Software units, and FAR of 2.25 for IT Hardware
  units
• Private IT parks scheme to support and encourage
  creation of IT infrastructure in the private
  sector
• Minimum 6 m. sq. ft. of built-up space for IT
  industry to be created within the next 5 years
• All State sponsored IT parks to be connected to
  the National Internet Backbone and the Kochi
  Gateway by OFC

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Strengthening Local Industry
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Improving Organisational Maturity of IT Companies
in the State

• Performance Excellence framework based on Malcolm
  Baldridge criteria
• Holistic approach to improving organisational
  maturity of local IT industry
• Foster culture of metrics/measurement against
  specific and general international benchmarks in
  the IT industry

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Business Facilitation

• Incubation of Business/Technology
• Business entry facilitation (clearances,
  approvals, documentation, etc. to be facilitated
  through single nodal entity)
• Business promotion assistance (generating and
  directing enquiries participation in trade
  fairs, conferences, other events other
  handholding if required for small/tiny units)

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Other Highlights

• Steps to accelerate PC and Internet penetration
  in the State
• Centralised resources/support for facilitating
  patents/IPR creation
• Steps to curb software piracy
• Encourage Accessibility of IT products and
  solutions (for the disabled)
• Judicious use of open/free software

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Incentives for IT Industry
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IT INDUSTRY EMPLOYMENT PROMOTION SCHEME

• Separate recognition for IT Software, Hardware
  and ITES industries
• At highest slab of employment (250/125/500), the
  highest incentive in the country of Rs. 40 Lakhs

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Quality Certification

• One time incentive of Rs. 5 Lakhs for Kerala
  based IT and ITES companies that secure
• CMM Level 5 certification by SEI, CMU
• OR
• COPC certification by the Customer Operations
  Performance Centre
• OR
• eSCM Level 3 certification by ISRI, CMU

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Early Bird Incentive

• Operative until June 30 2002
• Rs. 50 Lakhs for any new unit that employs
  minimum 250 headcounts for a 12 month period
  within first 30 months of operation
• This incentive is over and above other incentives
  that the IT unit may be entitled to

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Incentives for Kerala IT Companies

• Price preference on purchases of software
  solutions and IT products, subject to specified
  conditions under policy and tender document, by
  State Government/ PSUs/ Autonomous bodies
• 7.5 on IT software solutions
• 10 on IT products

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Special Incentive Packages

• Customised incentive packages for
• Top 20 Indian software exporters
• High employment generating IT software companies
• Medium sized IT product/Supply Chain Management
  companies
• Units proposed to be set up in high tech,
  investment intensive areas

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Kerala, Indias Most IT Ready State?
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Kerala, Indias Most IT Ready State !!

• Kerala is poised today to become the IT
  industrys dream destination. It is the first
  State to implement the core recommendations on
  labour regulatory framework for the IT industry
  made by the Planning Commission. Kerala has the
  best value communication infrastructure amongst
  all States, period. Its top class human resources
  pool is being attuned to the needs of the IT and
  ITES industries. And the incentive package sets a
  new standard amongst States in rewarding scale
  and excellence of IT operations.