1: “Start in Uttar Pradesh (START-IN-UP)” to promote startup culture & entrepreneurship in Uttar Pradesh
The Uttar Pradesh Start-up Policy gives thrust to “START IN UP”, to nurture startup culture using INFUSE model (INcubators – FUnd of Funds – Startup Entrepreneurs). Various incentives shall be provided by the Government to Incubators, Startups and Investors funding UP based startups
IN - Incubators
1.1: Incentives for Incubators:
• State Government shall promote establishment of Incubators with a vision of having Incubator in every district in Uttar Pradesh. The state aims to develop country’s largest Incubator in state’s capital, Lucknow.
• Host Institutes like Government and Private Technical, Management, R&D Institutes, Organizations / Non-profit Organization/ Corporates / Industry Association or through PPP mode shall be encouraged to establish Incubators or Accelerators in Uttar Pradesh.
• The selection of Host Institutes shall be done on case to case basis after due diligence.
• Further, the State Government shall recognize Lead Incubators (Navratnas), having rich experience and strong capabilities in the Incubation and start-up space. The State Government shall enter into MoU with such Lead Incubators to guide, mentor and handhold other Incubators / Institutes willing to establi sh Incubators in Uttar Pradesh.
The following incentives can be availed for establishing Incubators / Accelerators
• Capital Grant: Capital grant on setting up of Technology Infrastructure shall be reimbursed upto 75% in case of Government Host Institutes and 50% in case of other Host Institutes , subject to a maximum limit of INR 1 crore. The same limit shall be applicable to Host Institutions for scaling up existing Incubator / Accelerator. In case the grant amount needs to be increased, the same shall be decided by Empowered Committee on case to case basis.
• Operational Expenditure: Financialsupport of maximum INR 5 Lakhs per year for 5 years, covering the deficit of the operational expenditure in running the Incubator / Accelerator.
• Rebate on Lease/ Rental Space: Reimbursement up to 25% of lease /rental charges on the space in which Incubator / Accelerator operates, shall be eligible with maximum limit of INR 10 lakhs per year, for a period of 5 years or until the Incubator is self-sustainable, whichever is earlier.
• Reimbursement of paid Stamp Duty and Registration Fee: Incubators / Accelerator shall be eligible for 100% reimbursement of the Stamp Duty and Registration Fee paid on sale/ lease / transfer of land and office space for the first transaction
• Electricity Duty Reimbursement: 100% reimbursement on electricity duty will be given to Incubator / Accelerator for a period of 5 years
• Mentorship Assistance: Mentorship Assistance of INR 2 Lakhs per mentor shall be given to Mentors associated with Incubator / Accelerator. This assistance shall be given for covering expenses incurred on coaching, g uiding, travelling, lodging etc. Further, Coaches would also be appointed. These coached would be the mentors, who possess deeper knowledge about the local ecosystem of the state.
• Empanelment of Experts: The State Government shall empanel a pool of experts from diversified fields such as accounting, legal, financial, investment, marketing etc to provide such services to start-ups / Incubators.
Center of Excellence
1.2: Incentives for Incubators:
• Government of Uttar Pradesh envisages creation of world class infrastructure in the form of Center of Excellence (CoE). CoE shall possess maturity and experience in incubation, exemplary standards of R&D and promote best practices for nurturing entrepreneurship
• The CoE shall promote focus areas like Big Data, Cloud Computing, Internet of Things (IoT), Machine Learning, Artificial Intelligence, Cyber Security, clean -tech, edu-tech, agri -tech, health-tech and other areas of social or national importance
• Host Institutes like Government and Private Technical, Management, R&D Institutes, Organizations / Non -Profit Organization/ Corporates / Industry
Association or through PPP mode can establish CoE
• The Government of Uttar Pradesh shall provide financial support in the form of Grant-in-aid (covering capital and operational expenditure) upto INR 10 crore to CoE for a maximum period of 5 years. It is expected that the CoE would become self-sustainable by the end of 5 years
• The approval for setting up CoEs shall be contingent upon Empowered Committee’ decision. The release of funds / incentives by the Government shall depend upon their performance.
FU - Fund of Funds
1.3: Access to Finance by UP Government
• The Government of Uttar Pradesh shall establish an INR 1000 Crore UP Start-up Fund for providing access to financ e to start-ups in Uttar Pradesh.
• The Fund shall be in the form of fund of funds. In this model, the Fund will not be invested directly into start-ups, rather, it shall participate in SEBI approved investors .
• Alternatively, the Fund shall not be invested directly into start-ups, rather it shall make investment in “Daughter Funds,” which would invest in startups promoting innovative ideas across all sectors in Uttar Pradesh
• The Government of Uttar Pradesh would take minority participation in the Daughter Fund, by being a limited partner of upto 25%
• The Fund would be professionally managed and a Fund Manager shall be nominated/appointed to manage the UP Start-up Fund, granted by the State Government.
SE - Start-up Entrepreneurs
1.4: Incentives for Start -ups & Entrepreneurs
Definition of Start-up
An entity shall be considered a start-up, on fulfilling the following conditions:
• The entity should be registered in Uttar
Pradesh
• The entity should fulfill the terms and conditions defining start-up as per the Government of India definition, vide notification no. G.S.R. 501 (E) dated May 23, 2017 and as amended from time to time
Domain of Start-up
Start-ups are entitled to work across all sectors (e.g agriculture, health, education, IoT, 3D printing, Big Data etc) and they should be supported by technology
The start-ups fulfilling the above conditions and being incubated in UP based Incubators/ Accelerators / CoEs shall be eligible for following incentives:
• At Idea Stage: Startups shall be provided sustenance allowance of INR 15,000 per month for a period of 1 year at the idea stage
• At Pilot stage: Startups shall be provided marketing / commercialization assistance of upto INR 10 Lakhs to launch their prototype product /services in the market at Pilot stage.
• Patent Filing Cost: The cost of filing and prosecution of patent application will be reimbursed to the incubated startup companies subject to a limit of INR 2 lakh per Indian patent awarded and INR 10 lakh per Foreign awarded patents
1.5: Non-Fiscal Incentives for Start-ups and Incubators
Startups and incubators in the State will be permitted to file self-certifications and such units will be exempted from inspection for the first 3 years of operation , in the prescribed formats under the following acts and rules framed (may be amended from time to time) there under barring inspections arising out of specific c omplaints.
i. The Factories Act
ii. The Maternity Benefit Act
iii. The Shops & Establishments Act
iv. The Contract Labour (Regulations & Abolition) Act
v. The Payment of Wages Act
vi. The Minimum Wages Act
vii. The Employment Exchanges (Compulsory Notification of Vacancies) Act
• Permission shall be available for 3-shift operations with women working in the night for startups, subject to such units taking the prescribed precautions in respect of safety and security of employees in addition to providing the required welfare and health amenities as prescribed under applicable labour laws and obtaining the necessary approvals from the competent authority
• Start-ups shall also be entitled to access common spaces like conference rooms/meeting rooms / R&D facilities etc of Incubator/ Accelerators / CoE located across different locations in Uttar Pradesh
1.6: Uttar Pradesh Start-up Mela and UP
Aavishkaar Puraskar
• The Government of Uttar Pradesh shall organize Start-up Mela every quarter, wherein start-ups would be invited to offer innovative solutions for problem statements (challenges faced on a day-today basis) by State Government /Departments/ Agencies/ Organizations
etc.
• The objective of Start-up Mela is to involve students and entrepreneurs in the development process of state and nation. Further, it aims to kindle and nurture the spirit of entrepreneurship among them.
• The selected start-ups would be awarded UP Aavishkaar Puraskar, along with a funding of upto INR 50 Lakhs to implement their solutions in the concerned department, in a time bound manner
• Performance of selected start-ups shall be assessed by the concerned State Government / Departments/ Agencies/ Organizations on a continuous basis.
• The selected start-ups shall also be eligible to receive free incubation support for a period of 2 years in Incubator/Accelerator/CoE supported by State Government under UP Start-up Policy
1.7: Other Promotional support
• Uttar Pradesh Government shall organize and promote start-up challenges, Hackathons, bootcamps, workshops, business plan competitions, conclave, conferences etc to boost the start-up environment.
• Uttar Pradesh shall be promoted as an entrepreneur friendly destination through participation in national and international events, sponsoring the participation of loc al startups in such events.
• The government shall provide sponsorship assistance, subject to a maximum of INR 50,000 per start-up for organization/participation in such forums
• Further, start-ups shall also be encouraged to access common spaces like conference rooms/ meeting rooms / R&D facilities etc of Incubator/ Accelerators / CoE located across different locations in Uttar Pradesh. For this purpose, start-up smart cards may be issued.
Note: The UP Government shall adopt and notify changes in UP Start-up Policy to be in alignment with Central Government, from time to time
2: Policy Implementation Unit
• A Policy Implementation Unit (PIU) shall
be established under the chairmanship of Principal Secretary, Department of IT & Electronics. The Policy Implementation Unit shall take decisions on matters pertaining to effective and successful implementation of IT & Start-up Policy, like those related to promotion of startups, Incubators, Venture Capitalists, Start-up Corpus Fund, IT/ITeS units. The PIU shall be responsible for providing recommendation and approval for incentives applicable to IT/ITeS units, Incubators/ Accelerators/ CoE and Startups etc in Uttar Pradesh. It shall provide timely redressal of their grievances and facilitate necessary guidance and support. In case, a decision is not being able to resolve at the level of PIU, it shall be taken up to the Empowered Committee, chaired by the Chief Secretary.
• The PIU shall comprise of Consultants appointed on an outsourcing basis to implement, support, monitor and provide feedback to Policy Implementation Unit Committee/ Empowered Committee on the implementation of Uttar Pradesh IT & Start up policy for a period of 5 years. Other primary responsibilities of PIU include facilitation to potential investors, liaison with Government functionaries, engagement with Industry, Industry Associations, Entrepreneurs and Startups, Branding and Marketing of policy.
Note: Department of IT & Electronics shall nominate its nodal agency to promote IT/ITeS units, Start-ups, Incubators/Accelerators/CoE & encourage Host Institutions in the state. It shall be the nodal agency for implementing UP IT & Startup Policy
3: Empowered Committee
• State Level Empowered Committee under the chairmanship of the Chief Secretary shall oversee the development of UP IT & Start-up Policy and monitor the implementation of the same. This committee shall among others comprise APC, IIDC, and Principal Secretaries of IT&E, Finance, Planning, MSME, Commercial Tax, Energy, Transport, Revenue, Housing and other departments as required
• The Empowered Committee shall provide recommendation / approval for investment on case to case basis, for development of IT City/IT Park/Mega Investment/ Incubators / Accelerator / CoEs, to bring about inter-Departmental coordination, for establishment of Fund of Funds, for grievance redressal of investors , start-ups etc.
• The maximum limit of financial incentives under the UP IT & Start-up Policy, may be relaxed on the recommendation of the Empowered Committee
4: Policy Duration
This Policy is valid for a period of 5 years from the date of its notification . It supersedes the previous IT Policies, including UP IT Policy 2012 and UP IT & Start-up Policy 2016
5: Glossary
5.1. “IT Industry” includes IT Hardware and IT/ITeS units/companies. Where IT units/ companies include IT Applications, software and IT services and IT Enabled Services includes BPO/ KPO/ Consulting /Animation/Artificial Intelligence/ Gaming and other Knowledge Industry uni ts.
5.2. Software services include:
• Application software
• Operating system
• Middleware/Firmware
• Any component level development of the above software.
• Design and Quality assurance work for these software.
• System integration work/components for software.
• Any localization and SCM work in the software.
• Extension development (modules outside the main software).
5.3. “IT” is defined as any service which results from the use of any IT software over a system of IT products for realizing value addition.
Information Technology services include:
• Application software
• Internet Service Provider
• E-mail Service Provider
• World wide web Service Provider
• E-commerce and content development
•Electronic Data Interchange (EDI) Services
• Video conferencing
• V-SAT, ISDN services
• Electronic Data Centre activities
5.4. “IT enabled Services include processes and services that are delivered over telecom networks or the internet to a wide range of business segments such as Medical Transcription, Legal Database processing, IT, Education and Training, Legal process outsourcing, IPR services, Digital content development / animation, Remote Maintenance, Back office operations –Accounts/Financial services, Electronic, Medical and Health consultancy, Bio informatics, Data Processing and Call Centers etc.
ITeS include, but are not limited to:
• BPM(Business Process Management)
• Customer interaction services, e.g., call/contact centers and email help desks
• Engineering and design
• Back office processing
• Finance and accounting (provided remotely)
• Insurance claims processing (provided remotely)
• HR services (provided remotely)
• Web site development and maintenance services
• Data search, integration and analysis Network consulting and management
• Remote education
• Animation (provided remotely)
• Gaming
• Market research (provided remotely)
• Translation, transcription and localization (provided remotely)
• Consultancy (Provided remotely) for
• IT sector
• ERP – Enterprise Resource Planning (e.g. SAP, Oracle etc)
• CRM – Customer Relationship Management
• MRM- Marketing Resource Management
• Technical support
• Business Systems and Processes
• Data Processing
• System Integration and customization.
• System Upgradation services
• Designing and designing systems
• Call centers:
• Voice- Both inbound and outbound
• Data- Both inbound and outbound
• Software Extension development
• IT Facilities management (including provided remotely)
5.5. Classification of Cities
• Tier I – Noida, Greater Noida
• Tier II - Lucknow, Agra, Kanpur, Allahabad, Meerut, Varanasi and other cities having population more than 20 lakhs including Yamuna Expressway region in particular.
• Tier III- cities having population less than 20 lakhs.
5.6. MSME-
Micro, Small & Medium Enterprises IT/ITeS units with an annual turnover of up to INR 25 Cr.
The nature of an IT/ITES company is such that there is a relatively lower investment compared to other sectors. Hence the definition is changed from MSME, GoI definition, so that the scale of the company is determined by its revenues
5.7. State Agencies
• Development Authorities
• Housing Boards
• Lucknow Industrial Development Authority (LIDA)
• UPSIDC
• Other State Institutions notified by the Government
5.8. Startup:
An entity shal be considered as a Startup on fulfilling the conditions defined by Government of India, vide notification no. G.S.R. 501 (E) dated May 23, 2017 (and as may be amended from time to time)
The conditions are as follows:
a) if it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India; and
b) up to seven years from the date of its incorporation/ registration; however, in the case of Startups in the biotechnology sector, the period shall be up to ten years from the date of its incorporation/ registration; and
c) if its turnover for any of the financial years since incorporation/ registration has not exceeded Rupees 25 crores; and
d) if it is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.
Provided that any such entity formed by splitting up or reconstruction of a business already in existence shall not be considered a ‘Startup’
e) The Start-up should be registered in Uttar Pradesh
5.9. Incubators:
The incubator shall be responsible to support startups by providing plug and play facilities, meeting/conference rooms/office space and shared administrative services, High-speed Internet access etc. The Incubators shall also provide services like mentors to start-ups, training, funding, legal services, accountancy services, technical assistance, networking activities, marketing assistance, links to higher education resources etc, in collaboration with State/Central Government, as possible
5.10. IT City:
An IT City requires 100 to 500 acres of land which will be used in the ratio of 60:40 approximately as processing and non-processing area. The processing area would consist of only IT units like IT companies, BPO’s, KPO’s etc. The non processing area would include residential facilities, public utility offices/facilities/commercial area, Education, Healthcare and open spaces
5.11. IT Park:
An IT Park is constructed with minimum floor area of approximately 15000 square meters. It may or may not include public utility offices/ facilities in the said premises. The area allotted for IT activities should be 75% of the allocable area. An IT park contains most of the technological infrastructure similar to an IT city like optic fibre connectivity, Broad band connectivity, Wi-Fi access, Video conferencing facilities etc. IT Park is a subset of an IT City with entire area dedicated majorly on IT activities
Department of Information Technology and Electronics, Government of Uttar Pradesh
with
UP Electronics Corporation as Nodal Agency
for Policy Implementation Unit (PIU)
Address: 10-Ashok Marg, Lucknow-226001
Phone no: 0522-2286808, 2286809, 2286812
Email: info@itpolicyup.gov.in
Website: itpolicyup.gov.in