Incentives worth Rs 600 crore offered for semiconductor hubs in Odisha
BHUBANESWAR: Even as the Centre has approved two big-ticket chip plants worth Rs 4,009 crore for Odisha, the state government has upped its game and decided to offer special incentives and additional infrastructure support up to Rs 600 crore for setting up semiconductor parks.
As per the recently amended Semiconductor Manufacturing and Fabless Policy, investors intending to set up a semiconductor industrial park in the state through world-class developers will get a subsidy of 25 per cent (pc) of the capital expenditure up to a maximum ceiling of Rs 400 crore. Capital expenditure include core infrastructure, common infrastructure and common facility centres.
The park developers will also get land at 25 pc discount over the prevailing rate of Industrial Policy Resolution (IPR). The government has invited companies to establish public-private-partnership (PPP) ventures for common facilities centres with advanced infrastructure for tooling, instrumentation, testing and captive effluent treatment plants, among others.
There will be interest subsidy of five per cent per annum on term loans for a period of seven years, up to a maximum limit of Rs 50 crore per annum, reimbursement of 100 pc of net SGST paid, 100 pc exemption of stamp duty on lease/sale agreement of land (for three transactions by the developer with each unit in the park) and 100 pc reimbursement of conversion fee for change of land use, besides incentives on power supply and water supply.
The total outflow towards fiscal subsidy for any semiconductor park will be up to Rs 600 crore. Odisha is among the few states that are offering this amount of subsidy in a bid to become a hub of semiconductors.
In case of semiconductor fabrication projects and display fabrication projects, the state will provide fiscal support on 30 pc of the project cost. However, for the first three units, the support will be provided on 50 pc of the project cost as defined by the Ministry of Electronics and Information Technology (MeitY).
In case of semiconductors, silicon photonics, sensors fab and semiconductor assembly, testing, marking and packaging (ATMP), outsourced semiconductor assembly and test (OSAT) facilities, the fiscal support will also be 30 pc of the capital expenditure. But, it will be 50 pc for the first five units. The state will also provide relocation support of Rs 7 crore per unit for the first 10 fabless design units and eligible engineering professionals.
As per the modified policy, mega semiconductor units will be provided R&D grants up to Rs 2 crore per company per year for 10 years linked to specific semiconductor R&D technology and products outcomes. For others, the grant will be extended in the form of reimbursement (covering capital and operational expenditure only for R&D) up to Rs 5 crore in a span of five years.