BHUBANESWAR: In a bid to take a place in India’s semiconductor hub aspirations, Odisha government in its new policy has offered a slew of sops like additional subsidy on land, power, and water tariff besides production-linked incentives and much more to entrepreneurs and investors.
Odisha is the third state to have a policy for the semiconductor sector after Gujarat and Uttar Pradesh. Odisha’s policy is considered to be more advantageous than those of the other two states as it covers both - semiconductor manufacturing companies coming through the India Semiconductor Mission (ISM) and those who are trying to come directly to the state and offers additional subsidies and incentives.
As per the draft Odisha Semiconductor Manufacturing and Fables Policy, 2023, investors coming through ISM will get additional 50 per cent subsidy apart from the subsidy on fixed capital investment (FCI) given by the Centre. In the non-ISM category, the units will get 30 per cent of FCI based on the project cost of the company.
While the interest subsidy of five per cent has been capped at Rs 25 crore per annum for seven years, the first five mega projects (investment above Rs 5,000 crore) will get additional 25 per cent subsidy on land rate fixed as per Industrial Policy Resolution (IPR).
All mega projects will be offered 10 per cent additional subsidy on IPR land rate on the first 200 acre of land for their projects and water at project site will be made available at Rs 7.65 per cu metre. The upcoming industries will get power supply at Rs 2 per unit for 10 years with electricity duty and inspection charges fully exempted.The draft policy says, units will get state GST reimbursement up to 100 per cent of FCI and production-linked incentives of one per cent on net sales turnover for five years.
Odisha offers a range of financial benefits for the fabless design companies that design and market hardware by outsourcing the manufacturing, while other state policies do not offer any incentive.
Fabless companies not coming under design-linked incentives (DLI) scheme of the Centre, will be incentivised by the Odisha government. The incentives included 10 per cent of the cost of development as seed money, 10 per cent of the cost of development as reimbursement on achieving milestones, a cap of Rs 20 crore for each project or each company of which Rs 7.5 crore is for proof of concept (PoC) and Rs 12.5 crore is for productisation.
An additional grant of Rs 10 crore has been proposed in the policy for productization for the first five mega projects on system-on-chip, application-specific integrated circuit or processor class of products registered by companies in Odisha.
The state government will also provide 10 per cent capex incentives in addition to the Centre’s 25 per cent incentives for raw materials and supply chain products under the scheme for promotion of manufacturing of electronic components and semiconductors. The new policy promises to generate around 5000 direct employment and 20,000 indirect employment during the policy period of seven years with at least one semiconductor manufacturing unit and over 100 fables design firms.