Karnataka Data Centre Policy plans Rs 10,000 crore investments

The Karnataka Cabinet approved a new policy on Monday that aims to attract investments worth Rs 10,000 crore in the data centre industry by 2025.

The Cabinet decided to grant Rs 100.50 crore to implement the Karnataka Data Centre Policy 2022 that offers a slew of incentives and subsidies, Law Minister JC Madhuswamy said, briefing reporters.

“Karnataka has the potential to position itself as one of the leading destinations for Data Centre Industry in the country with a data centre capacity of 96 MW which accounts for 15 per cent of India’s data centre capacity,” a policy note prepared by the IT/BT Department said. “Bengaluru currently features among the top 5 leading destinations for the Data Centre Industry in India.”

A data centre houses critical assets of an organisation, making it crucial for daily operations. At present, Karnataka is home to eight data centre players - Reliance, Siffy, NTT, Next Gen, Trimax, Airtel, STT and ESDS. The policy wants to develop “more than 200 MW capacity Data Centre Industry in Karnataka by 2025”, the department said.

The policy will “focus on creating demand and value for data centres, by providing a robust and well-connected ecosystem for the growth of data centres in the state”, according to the note.

The Karnataka Data Centre Policy offers special incentives for companies to set up data storage infrastructure outside Bengaluru - capital subsidy of up to Rs 10 crore, 10 per cent land subsidy up to Rs 3 crore, 100 per cent stamp duty exemption up to 10 acres, concession on registration charges and 100 per cent exemption on land conversion fees.

Sops applicable across Karnataka include power tariff concession, exemption from electricity duty and other special incentive packages on a case-to-case basis.

The incentives and subsidies will cost the government Rs 1,467.43 crore, the note said.

“During the policy period, new and existing data centres in the state are expected to generate an estimated total revenue of Rs 2,992 crore comprising SGST inflow of Rs 1,192 crore and additional revenue from state power ecosystem Rs 1,800 crore,” the government said.

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