Incubation - Road ahead for Economic Development

Initiatives in IT Sector

M.P. Dubey,Joint Director & Officer In Charge,

Software Technology Parks of India,Ministry of Electronics & Information Technology (MeitY),

Government of India.

IT/ITES IN VISAKHAPATNAM

Region No. of

Units

Approximate

Existing Built-

up Space in

Mn Sq ft

Approximate

New Built-up

Space in Mn

Sqft

Madhura

wada Hill

# 2, SEZ

23 .3 .7

Madhura

wada Hill

# 3, SEZ

11 .4 .7

Duvvada

SEZ

19 .25 .2

City, STPI

& EOU

70 1.1 .25

Total 123 2.15 1.65

Infrastructure

Year ₹. In Crores

2013-14 1570

2014-15 1750

2015-16 2000

2016-17 2200 Cr.

(Approx.

STP 1000Cr.)

Exports: Approximate

Export Income Earned

Industry 2016-2017

IT – Software

Development

5500

ITES – Medical

Transcription, BPO,

KPO

15000

Tech Support 5000

Total approx 25500

Employment: Approximate

Employment Generated

STPI Mandate

Growth of IT exports

SME Enablement

Dispersal of Industry

Shift towards Offshore

model

Employment Generation

Achievements

Areas of Established in 1991, set up by Ministry of

Electronics and Information Technology (Meity),

Government of India .

Mandate to promote export of IT Software & IT

Services from the nation by providing conducive

environment and Infrastructure facilities.

Acting as a ONE STOP SHOP for needs of software

exporters.

Single window clearance scheme.

STP unit can be set up anywhere in India.

100% foreign equity is permitted.

Duty free imports of hardware & software( basic customs duty

is exempted).

Import of second-hand capital goods is also permitted.

Unit shall be a positive net foreign exchange earner

The sales in the domestic tariff area (DTA) are permissible up

to 50% of the export in value terms

Softex certification for STP units and other non STP units.

KEY BENEFITS OF STP / EHTP SCHEME

Major Functions of STPI

* Statutory Services: Implementation of STP & EHTP

Scheme

*Data-communication services

*Interface between Industry

and Government

*Incubation Facilities for

Start-up companies

STPI Ecosystem: Par Excellence

Service Provider, Project

Consultancy & Trainings

Development Role

Statutory Role

1.Dispersal of industry to

tertiary cities

Facilitation

1. Best Broadband connectivity,

2. Incubation space to SME

3. International cooperation

seminars, collaborative Projects

1. STP Scheme: Cornerstone of

Indian IT policy

2. Single window clearance and fiscal

benefits under STP Scheme

1. Policy modification

2. Collaboration with state agencies

& educational institutions

Single Window Clearance and Infrastructure

provider

Stimulating Demand

Interface between Govt. & Industry

ONE STOP SHOP

STP/EHTP Scheme

SOFTWARE TECHNOLOGY PARKS (STPs)Government of India has declared computer software as one of the extreme focus area for growth of exports. Therefore, Govt. of India announced a special scheme to provide conducive environment as well as to promote software exports called "The Software Technology Park (STP) Scheme".

STP Scheme is a 100% EOU Scheme for the development and export of computer software using data communication link or in the form of physical media including export of professional services. STP can be a virtual software development unit or can be infrastructural complex set-up for providing necessary support for the STP units.STPI provides 100% Software Exporting units with single window clearance and fiscal support to enable smooth operations and facilitate industry growth.

SNo Benefits under STP Scheme

1. 1 Approvals are given under single window clearance scheme.1. 2 Projects involving imported capital goods up to US$ 10 millions with Indian.1. 3 Investment are cleared by local STP Authorities.1. 4 100% Foreign equity is permitted.1. 5 All the imports in the STP units are completely duty free.1. 6 Re-export of capital goods is permitted.1. 7 Minimal Export Obligation with positive Net Foreign Exchange1. 8 100% depreciation on Capital Goods over a period of five years

PTO

1. 8 100% depreciation on Capital Goods over a period of five years

1. 9 Domestic purchases by STP units are eligible for the benefit of deemed exports to the equipment suppliers.

1. 10 The sales in the Domestic Tariff Area (DTA) shall be permissible up to 50% of the export in value terms as post export benefit.

1. 11 STP units are exempted from corporate income tax upto 2010.

1. 12 The items like computers and computer peripherals can be donated to recognize the non-commercial educational institutions, registered charitable hospitals, public libraries, public funded research and development establishments, organizations of Govt. of India or Govt. of a State or Union Territory without payment of any duties after two years of their import. This is applicable for both imported and indigenously procured above items.

NOTIFICATION NO. 33 / (RE) / 92-97 Dated 22-3-1994

Subject: Software Technology Parks (STP) Scheme

NOTIFICATION NO. 4 / (RE-95/ 92-97), Dated 30-4-1995

(Notifies amendment to Notification No.33(RE)/92-97

dated 22nd March 1994 on STP Scheme)

SOFTWARE TECHNOLOGY PARKS (STPs)

ELECTRONICS HARDWARE TECHNOLOGY PARK Scheme (EHTP Scheme)

For encouraging exports of Electronic Hardware items including hard disk drives, computers,television, etc., such parks have been developed by the Ministry of Communications & InformationTechnology. An Electronic Hardware Technology Park (EHTP) may be an individual unit by itself or aunit located in an area designated as EHTP Complex. As in the case of STP Scheme, the EHTPScheme is also administered by the Ministry of Electronics & Information Technology (MeitY).

Incentive Package for Electronic Hardware announced in the Foreign Trade Policy 2002-07

An EHTP can also be set up by the Central Government, State Government, public orprivate sector undertakings or any combination of them.

Obligations and BenefitsThe entire production of an EHTP is to be exported to hard currency areas except sales inthe Domestic Tariff Areas, subject to the limits set down.

SNo

Benefits under EHTP Scheme

1 An EHTP may import free of duty capital goods, raw materials, components and other related inputs. However these should not be on the negative list of prohibited items in the Foreign Trade Policy. Second hand capital goods may also be imported by EHTP units.

PTO

SNo Benefits under EHTP Scheme2 An EHTP unit may bunch the products manufactured by it for sale in the DTA with its entitlement. EHTPs are

duty free and bonded areas and customs exemptions are extended accordingly.

3 An EHTP is exempted from the payment of corporate income tax up to 2010 and also central sales tax reimbursement.

4 An EHTP may gear up to 100 per cent foreign equity.

5 Supplies that are effected in DTAs under global tender conditions and payment in forex are also considered as part of relinquishment of export obligation.

6 Supplies made by DTAs to an EHTP unit will be regarded as deemed exports and is entitled to benefits under the Foreign Trade Policy. To get this benefit, goods have to be produced in the country and the supplies have to be made against a letter of authority issued by an officer designated in this behalf of the STPI, Government of India.

7 An EHTP unit may be setup for both software and hardware in an integrated manner

8 EHTP unit may purchase indigenous goods free of excise duty

9 EHTP unit may sell Goods/Services in DTA up to 50% of FOB value of exports, subject to fulfillment of positive NFE as per the policy & payment of applicable duties.

10 Minimum Export Obligation As per the Import-Export Policy, 2002-2007, EOU/EHTP/STP Unit shall be a net foreign exchange earner. Net Foreign Exchange (NFE) earning shall be calculated cumulatively for a period of five years from the commencement of production, according to the formula as under: Positive NFE= A-B >0 A: FOB value of exports B: Sum total of CG imported+value of payments made in foreign exchange.

Notification No. 42(N-8)92-97 dated 14 September 1992 issued by Ministry of Commerce. Notification issued by Ministry of Industry dated 22 February 1992 and amendment on 02 March 1993.

ELECTRONICS HARDWARE TECHNOLOGY PARK Scheme (EHTP Scheme)

INDIA BPO

PROMOTION SCHEME

(IBPS)

“IT for Jobs” pillar has focus on “IT/ITES in India”.

India BPO Promotion Scheme (IBPS)

BPO Scheme & the Incentives

Envisaged to create 48300 seats with a total outlay of Rs 500 Crores.

Expected employment creation is 1.5 Lakh.

BPO Promotion Scheme to create employment opportunities in smaller cities/towns excluding urban agglomeration of Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, NCR, Pune and States of North East Region

BPO Scheme & the Incentives

Following financial support in the form of Viability Gap Funding to eligible companies across the country.

- Financial Support: Up to 50% of expenditure incurred on BPO/ITES operations towards capital expenditure (CAPEX) and/or operational expenditure (OPEX) on admissible items as per Appendix-E, subject to an upper ceiling of Rs. 1 Lakh/Seat

- Special Incentives: The following special incentives will be provided within the ceiling of total financial support i.e. Rs. 1 Lakh/seat

Special Incentives……………..Inclusion & Diversity Special Incentive (%

of eligible financial support)

50% women employment

5%

4% Employment of persons with Disability

2%

Employment generation

Special Incentive (% of eligible financial

support)

2 X no. of seats 5%

2.5 X no. of seats 7.5%

3 X no. of seats 10%

A Company, availing financial support under IBPS, can also avail support under any other Scheme of the Central/State Government concerned other than similar financial support availed under IBPS.

Special Incentives……………..

Projected Employment

Challenges of Business Innovation I

BUTTERFLIES

Once a little girl saw a pupa

She was watching it for many hours as the butterfly inside was struggling to come out

Then it got stuck. Wanting to help the butterfly she cut open the cocoon and freed it.

BUT ALAS! IT COULD NOT FLY AND IT NEVER WOULD

The Butterfly’s struggle to get through the small opening is nature’s way of forcing fluid from the body to its wings, so it would be ready for flight.

Next day the same thing happenedShe saw another butterfly struggling to come out.She can not do any thingShe stood there shouting and yelling“Come up” , “Be careful, Don’t get hurt”, “Keep it up”, “No-No”, “Yes-Yes”, “ Prepare a Business Plan”, “No good strategy”

Finally the butterfly came out and started flying beautifullyShe was in laughter and tears

The Butterfly came, sat on her shoulder & Said “Thank you, I became a butterfly only because of you ! ”

Challenges of Business Innovation II

Intellectual Infrastructure

Physical Infrastructure

Cultural Infrastructure

Financial Infrastructure

Education Training Skills Knowledge Networks Research Institutes Social Vision and The Will

Connectivity to New

Markets and Others

Risk culture Innovation Ambience Venture Mind Social Recognition & Reorganization

Angel Fund Venture Fund Innovation Fund Incubation Fund Tech. Bridge Fund Investments

Business Incubators Performance

Business and Social Environment

To develop domain specific strategies for IoTincluding green building, smart grid, industrialmonitoring, agriculture, smart cities, healthcare,connected homes, telematics and supply chain, safetyand security, forest and wild life, automotive, naturaldisasters, etc.

In Vizag – STPI initiated Domain specific,Maritime, Power, Petroleum and Fintech (IOTapplications)

Industry sectors, focus areas and our commitment to innovation

DOMAIN SPECIFIC IT/ITES application

RESEARCH & INNOVATION

MARITIME PETROLEUMPower FINTECH SOFTWARE

INSAT

Last Mile - Fiber

Last Mile - RF

Last Mile – IPSTAR

Customer Can Be

Located ANYWHERE

in India

VSAT

Gateway

Burum Netherlands

STPI Vizag Marine

domain gateway

Belgium

ITMC

USA

International Fiber

INTERNET

Trans Atlantic Cable

Berneveld,Netherlands

International

Clients

INMARSAT C

Intelsat

Connected Smart Ship “Connected Smart Ship” is a joint initiative of HHI and Accenture to… Create business value for ship owners based on data analytics Transform the maritime industry by creating connected ecosystem

Building the Internet of Things @ SeaSMART MARINE

Unmannedvessels

Reduced crew with remote support and operation of certain

functions

Remote controlled unmanned

coastal vessel

Autonomous unmanned ocean

going ship

Remotely operated local

vessel

Remote controlled unmanned ocean going

ship

Unmanned ships will most likely start with local applications!

Roadmap

S.No.

Specialized Area Description

1. ROBOTICS Robots are ever more able to sense their environment, and interactwith objects in a controlled and autonomous manner.External and internal hull or tank inspection can be supported byremotely-operated or autonomous vehicles. One example is a hull-crawling robot which can extensively measure and detect thickness,corrosion, punctures, and fatigue cracks inside, for example,(flooded) cargo halls or ballast tanks. Use of such robots alsoimproves the safety of surveyors’ work.Multidimensional vision and sensor systems with advanced patternrecognition capabilities are key to this artificial intelligence.Industrial uses of robots vary from assembly line and heavy liftoperations, to more delicate tasks like painting and even surgery.

2. UNMANNED VEHICLES (Semi) autonomous vehicles are used for operations in dangerous orharsh environments including deserts, deep oceans and the Arctic. Tooperate safely without the need for (remote) human intervention, thevehicles are typically well equipped with an array of sensors and canadapt dynamically and rapidly to their environment.

3. UNMANNED AERIAL/SUB-SEA/SUB-ICE PIPELINE SURVEILLANCE

Exterior monitoring of long distances of pipeline by unmanned vehicles, as an addition to internal pipeline inspection techniques, reduces costs and improves coverage. The unmanned vehicle can also be used to collect data from local wireless sensors with limited range.

DOMAIN APPLICATIONS

S.No. Specialized Area Description

4. FLEET BROAD BAND Internet-based technology is being increasingly used incommercial settings. During 2008, broadband connectivity isavailable globally, except in the extreme polar regions. Thebroadband can offer 128 kbps streaming of videoconferencing,432 kbps for data transfer, and 256 kbps of streaming IP datarates.

5. PAINT SENSORS Piezoelectric paint is composed of tiny piezoelectric particlesmixed within a polymer. Measurement of cracks on largestructures such as bridges, ships, aircraft, ..in the domain ofMaritime, Power and Petroleum

6. FLEET MANAGEMENT SYSTEMS

Support management of ships while at sea, integrating softwarefor crew management, maintenance, document control, safetymanagement, and other aspects. The efficiency of shipoperations will be further improved by utilizing improved andincreasingly real-time ship-to-shore connectivity.

7. DEEP SEA COTS The expansion of oil and gas production from the deep sea is oneof many areas in which COTS (Commercial Off The Shelf)software is increasingly used, in order both to reduce costsand/or to benefit from product innovation by suppliers. Thissoftware is used in a wide variety of applications, from inventorycontrol to logistics.

DOMAIN APPLICATIONS

S.No. Specialized Area Description

8. Intelligent Energy Managementof Distributed Energy Resources (DER)

The grid communications & control (C&C) paradigm is changing from baseload-and-peak to inherently variable supply and dynamic, flexible demand.

Using IoT for Distributed Energy Resources

A Decentralized Services Model

9. Fintech Global financial services companies like Paytm, ValueLabs,Blocktrust, Knolskape Trasaction Analysts, Genesys Labsand GMS have offices in the Fintech valley, Visakhapatnamand are working on Global financial services, Block chaintechnology, Bit Coins, ...etc. Global financial servicescompanies, government and academia will be encouragedto come together and build capacity, infrastructure, marketaccess, connectivity, funding channels, and incentivemechanisms that will help them achieve their businessgoals. Start-ups, financial Institutions, technology vendors,incubators / accelerators / innovation labs, and investorssimultaneously would be also be encouraged to contributeto the ecosystem

DOMAIN APPLICATIONS

To nurture the innovation on the domain specific concept with the help/mentorship of IMU, Vizag, we able to simulate the concept of the innovation from the future budding entrepreneurs’

It is a live case study where mentorship can able to help to innovate in marine application. The below photograph is shown as the 1st award out of 21 eng colleges.

FINANCING FOR INNOVATIVE

START – Ups

EXISTING FINANCING SCENARIO IN INDIA

Types of Funds Stage Sources Sectors

Boot Straping Ideation, launch

period

Self/family/friends all

Seed Fund Start-up phase Govt./ Pvt. All Tech. areas

Small business

loans

Early Govt. Org./ Banks

and FI’s

All areas

Angels Pre-revenue,

product dev

Pvt. ICT, Telecom,

Energy

Venture Capitalist Roll out/ Scaling

up/growth

Pvt/Govt/banks ICT,BT,Media,Tele

com,Health

care,Energy

Innovation Funds Innovative

ness/IP Based

Govt/Pvt, PPP ICT,BT,Clean

Energy, telecom

GOVERNMENT LED FINANCIAL SUPPORT TO ENTERPRENUERS

Sl.

No.

Organization Programme Key aspects

1. DST Seed support

System(SSS) by NSTEDB

and TDB for STEPs/TBIs

• Neb: Fund size-Rs. 200lakhs

(Max: Rs. 50 Lakhs to incubatee)

• TDB: Fund size- Rs. 100 lakhs (

Rs. 25 lakhs)

2. DBT SBIRI Grant and Loan, differential funding

norms

3. SIDBI Start up Assistance

Scheme for MSMEs(SAS)

Structured Financing

4. MSME Incubator Prog. 100 Incubators to be set up ( Rs. 6

lakh/idea)

5. MCIT Funds for IT units New

Intiative TIDE

Fund size: Rs. 80 lakhs for IT units

15 centers, 1.25 crores/center

6. DSIR Tepp Phase wise funding to entrepreneurs

max: Rs. 45 lakhs

7. DSIR-NRDC Angel Fund to Incubatees

of DST Incubators

Fund range: Rs. 10 lakh-30lakh

mailto:dubey@stpi.in