Is Gujarat's 2022 IT Policy Driving Innovation?

One of its key promises was the creation of one lakh new jobs. However, this target remains unmet, echoing the unfulfilled commitment of the previous 2017-2022 IT policy, which aimed to generate 10 lakh jobs but fell drastically short.

Furthermore, the projected annual turnover of Rs 75,000 crore from the previous policy was nowhere close to realisation, with the actual turnover standing at only Rs 7,000 crore when the new policy was introduced.

The 2022 policy set ambitious goals, including increasing annual exports from Rs 3,000 crore to Rs 13,000 crore and achieving a turnover of Rs 25,000 crore. It also aimed to position Gujarat among the top five states in the IT sector.

However, nearly two and a half years after its introduction, the government has not released any official reports on the policy’s progress.

To support job creation, the government signed 16 Memorandums of Understanding (MoUs) with various companies to employ 28,750 people. Additionally, an MoU was signed with Light Storm, a private company, to establish Gujarat’s first submarine cable landing station (CLS) and data centers, with an investment of over Rs 1,000 crore within five years.

Despite these agreements, government officials have remained silent on the progress of these initiatives, and the policy has yet to yield tangible benefits for the IT industry.

Key Provisions Of The IT Policy:

• Increase Gujarat’s IT sector exports from Rs 3,000 crore to Rs 25,000 crore.
• Develop world-class IT infrastructure, data centers, and innovation hubs for emerging technologies.
• Provide CAPEX support: 25 per cent up to Rs 50 crore for general projects and up to Rs 200 crore for mega projects.
• Offer OPEX support: 15 per cent annually, up to Rs 20 crore for general projects and Rs 40 crore for mega projects.
  Employment Generation Incentive (EGI) with financial assistance of up to Rs 60,000 per employee to build a skilled IT workforce.
• 100 per cent reimbursement of the employer’s EPF contribution under the Atmanirbhar Gujarat Employment Assistance programme.
• Interest assistance of 7 per cent on term loans up to Rs 5 crore.
• 100 per cent reimbursement of electricity duty for eligible IT-ITeS units.
• Establish Gujarat AI School and an AI Center of Excellence to develop industry-ready IT talent.
• Financial assistance of up to Rs 50,000 per person for skill development courses for graduates and professionals.
• Promote IT cities and townships with CAPEX support of up to Rs 100 crore, along with regulatory and FCI norm relaxations.
• Rent subsidy of 50 per cent (up to Rs 10,000 per seat per month) for IT companies under the Infrastructure Scheme.

The Reality: Inactive Body

The Gujarat Electronics and Software Industries Association (GESIA), which is responsible for advocating IT companies' interests and addressing startup challenges, appears to be largely inactive. Despite repeated attempts to seek clarification from its chairman, Pranav Pandya, regarding the IT policy, he has remained unresponsive.

Government officials have consistently avoided answering crucial questions regarding the policy’s implementation. Queries about the number of IT companies established under the infrastructure scheme, the amount of subsidy disbursed, and pending applications remain unanswered.

Even written inquiries sent to officials’ mobile phones have been ignored. Tushar Bhatt, MD of Gujarat Informatics Limited, which operates under the Science and Technology Department, has also chosen not to comment.

CEOs of IT companies in Ahmedabad, speaking anonymously, expressed concerns that while policies are announced, the government fails to address real challenges. There are significant difficulties in availing subsidy benefits, and no special incentives are being provided to IT firms seeking to set up offices in GIFT City. Instead, officials focus on showcasing MoU figures without real policy execution.

During the ongoing budget session, the government acknowledged a significant decline in the number and turnover of IT companies in Gujarat. In response to a parliamentary question, the IT Minister revealed that the state’s IT sector turnover, which stood at Rs 1.25 lakh crore in 2019, has plummeted to a mere Rs 10 crore in 2023-24.

Additionally, over the past five years, 1,013 IT companies have shut down in Gujarat. Although 1,023 new IT firms were registered in 2022-23, only 116 were established in 2024-25.

Government data further shows a sharp decline in turnover figures:

2019-20: Rs 1.25 lakh crore
2020-21: Rs 1,068 crore
2021-22: Rs 1,168 crore
2022-23: Rs 1,142 crore
2023-24: Rs 10 crore

These figures highlight a concerning trend, raising doubts about the efficacy of the state’s IT policy and its impact on Gujarat’s digital economy.

Despite ambitious projections, Gujarat’s IT policy has failed to deliver on its promises. Job creation targets remain unfulfilled, financial incentives have not been effectively disbursed, and transparency is lacking.

While the government continues to sign MoUs and announce lofty goals, the ground reality suggests that the policy’s impact on the IT sector has been negligible. Without active intervention, greater transparency, and genuine support for IT businesses, the vision of making Gujarat a leading IT hub may remain a distant dream.