CHENNAI: In a bid to provide high-end jobs for people in Tamil Nadu and make the state a prime destination for global capability centres (GCCs), the state will be providing a payroll subsidy of 30% in the first year, 20% in the second year and 10% in the third year for jobs for salaries above Rs 1 lakh per month.
The idea is to incentivise the creation of high-paying jobs and the amount will be spent from the Rs 2,295 crore which has been allocated for the Industries, Investment Promotion and Commerce Department. The government is planning to woo GCCs to set up base in the state as it generates high-end jobs for Tamil youth.
Already there are around 160 GCCs in Tamil Nadu, constituting about 10% of national count, according to a report from international property consultant Knight Frank.
State-of-the-art research, design, product prototyping and testing for the global market are now being done in the state. Finance Minister Thangam Thennarasu said the government will also facilitate setting up of GCCs in Coimbatore and Madurai. After making Chennai the hub of GCC, the focus is now to woo more centres to set up base in Tier-2 and Tier-3 cities.
GCC accounts more than half of office space transactions in 2023 in Chennai.
The city’s commercial real estate market has registered the highest growth in percentage terms among top eight markets in the country. Registering an exponential annual growth of 92%, the office volume transactions of the city has increased from 5.6 million sqft in 2022 to 10.8 million sqft in 2023.
Srinivas Anikipatti, senior director - Tamil Nadu and Kerala, Knight Frank India, said, “The government’s decision to incentivise high-paying jobs in GCCs and invest in projects such as the Coimbatore IT park and mini textile parks in Karur, Erode and Virudhunagar districts will not only lead to employment growth but also contribute to the expansion of the formal economy. As per our evaluations, considering the estimated requirement of 1.2 billion sq ft of office space by 2047-48, these measures will stimulate the establishment of new employment hubs, fostering urbanisation within the state”.
GCCs are technology centres of foreign companies in India. They used to be called captive centres, but many in the industry now prefer the term GCCs, given the growing maturity of these centres and the greater autonomy they enjoy. The decision of locations to be offshored is primarily driven by factors such as low-cost manpower, availability of skilled resources, language proficiency and infrastructure.
What is a global capability centre
GCCs are technology centres of foreign companies in India. They used to be called captive centres, but many in the industry now prefer the term GCCs, given the growing maturity of these centres and the greater autonomy they enjoy. The locations to be offshored is primarily driven by factors like low-cost manpower, availability of skilled resources, language proficiency and infrastructure
