Startup schemes: Comparison of incentives provided by different states

As previously explored in the preceding article regarding the incentives extended by the government of Karnataka in the semiconductor sector, let us now proceed with a comparative assessment of these incentives in comparison to those offered by other states.

Table illustrating the incentives offered by various states

Table illustrating the incentives offered by various states

Comparison of incentives provided by different states

Patent Registration Incentive

Sl. No State Incentive
1 Karnataka
  • Domestic Patent - 2,00,000
  • International Patent – 10,00,000
  • Max 5 reimbursements per company
2 Odisha

Reimbursement of patent filing costs

  • Up to INR 5 Lakhs for domestic patents
  • Up to INR 10 Lakhs for international patents
  • 75% given upon filing, remaining 25% upon grant
3 Madhya Pradesh

Reimbursement for patent acquisition costs:

  • INR 5 lakhs for domestic patents
  • INR 10 lakhs for international patents
4 Telangana To reimburse 100% cost towards incentives for filing patents limited to INR 5 Lakhs.
5 Uttar Pradesh
  • Reimbursement for patent filings:
  • Up to INR 5 Lakhs for domestic patents
  • Up to INR 10 Lakhs for international patents
  • Based on actual expenses

Marketing Incentive

Sl. No State Incentive
1 Karnataka Up to 5,00,000
2 times per year
2 Madhya Pradesh
  • 50% subsidy on participation expenses in National/International Events.
  • Max. INR 2 Lakh for international, INR 1 Lakh for national events.
  • Available once yearly for 3 years from start of commercial operations.

Reimbursement of Quality Certification costs

Sl. No State Incentive
1 Karnataka 50% or max up to 10 lakhs
2 Madhya Pradesh
  • Eligible unit entitled to receive 50% of Quality certification cost, capped at INR 6 lakhs.
  • Assistance available once for a single type/kind of certification

R&D Grant

Sl. No State Incentive
1 Karnataka For companies < 7 years old
Reimbursement up to 2 crores
Twice during policy period
2 Odisha

R&D incentives for 5 years include:

  • R&D Grants up to INR 2 Crores per company per year for specific Semiconductor R&D Technology outcomes
  • Financial support covering 50% of project costs, max INR 5 Crores over 5 years
3 Telangana
  • Promotion of innovation in Electronics sector through grant awards
  • Assistance at 20% of project cost or up to INR 10 Lakhs, whichever is lower, for sponsored research from industrial unit to Government R&D Institution / Technical College.

Capital Subsidy

Sl. No State Incentive
1 Karnataka Applicable to the first two anchor units in each Greenfield cluster 10% up to 10 crores
2 Odisha 50% of Capex Assistant by GOI
3 Madhya Pradesh CAPEX Assistance: 40% on GFCI, plus 2% for women entrepreneurs. Disbursed annually: Up to 10 crores in 4 years, 10-50 crores in 5 years, above 50 crores in 7 years. Max reimbursement: 150 Crores per unit.
4 Gujarat
  • ISM-approved projects eligible for 40% additional capital assistance from the State Govt.
  • Assistance based on 40% of capex support provided by the Government of India.
  • State aid subject to eligible capital expenditure as defined in paragraph 3.3.
5 Telangana 20% capital subsidy, max INR 10 Crores per company (including subsidiaries and ancillary units).
6 Uttar Pradesh CAPEX Assistance: 40% on GFCI, with 2% more for women entrepreneurs. Disbursed annually over 4-7 years based on investment size. Maximum reimbursement: 150 Crores per unit.

Interest subsidy

Sl. No State Incentive
1 Karnataka 6% up to 50 lakhs for five years
2 Odisha Interest Subsidy: 5% per annum, capped at INR 25 crores annually. Applies to term loans from Public Financial Institutions/Banks, valid for 7 years from production start.
3 Madhya Pradesh Interest Assistance: 6% on term loans for eligible GFCI components, up to INR 10 Crores over 5 years. Assistance begins after the first loan installment post-commercial operations. Term loan excludes working capital and CC/OD limits for fixed asset creation.
4 Uttar Pradesh
  • Interest subsidy of 5% per annum on loans from Scheduled Banks/Financial Institutions.
  • Reimbursed up to maximum of INR 1 Cr per annum per unit for 5 years (Max INR 5 Cr per unit).

Land related Incentives

Sl. No State Incentive
1 Karnataka

Exemption from Payment of Stamp Duty and Concessional Registration Charges for the first 5 years.
Reimbursement of Land Conversion Fee - 75% - Startups and MSMEs
        50% - Large/Mega Enterprises

2 Odisha

Provider: IDCO

Land Lease: 99 years

Payment Terms: Ground Rent: 1%, Cess: ~0.75%; Subsidies: 25% off for first five > INR 5000 Cr, 10% on first 200 acres for mega projects, 5% on first 50 acres for non-mega

3 Madhya Pradesh
  • 100% reimbursement of stamp duty and registration charges on industrial park leases by Govt. of M.P.
  • Claimable after commencing commercial operations.
4 Gujarat
  • 75% subsidy on first 200 Acres for FAB project.
  • 50% subsidy for additional land for FAB or ISM-approved projects.
  • Subsidy based on prevailing land price at DSIRDA's land allotment date.
5 Telangana
  • Land Cost and Lease Rentals:
  • Land available at affordable costs.
  • Government provides 25% subsidy on lease rentals to eligible companies for 10 years.
  • 20% of allotted land can be used for dormitories exclusively for employees.
6 Uttar Pradesh
  • Land Subsidies: 25% for EMC/ESDM Parks in Madhyanchal and Paschimanchal, 50% in Bundelkhand and Purvanchal.
  • Subsidy Cap: 7.5% of project cost or INR 75 Cr, paid post commercialization.
  • FAR and Welfare: FAR of 3.0 + 1.0 (Purchasable), with up to 30% for welfare facilities in 25-acre industrial land.

Electricity Duty Exemption/ Power tariff

Sl. No State Incentive
1 Karnataka

KESDM companies in Karnataka get industrial tariff.

Associated industries also eligible.

Replaces commercial tariff.

Must follow KERC regulations.

2 Odisha

Reimbursement of INR 2 per Unit of Industrial Electricity rates for 10 years from COD (Commercial Operations Date) of the Semiconductor Project.

100% exemption from Electricity Duty and Electrical Inspection fees for 10 years.

3 Gujarat
  • 10-year power tariff subsidy of 2 per unit for eligible projects.
  • Enhanced subsidy possible for FDI-driven or relocated projects.
  • Exemption from electricity duty under Gujarat Electricity Duty Act, 1958.
  • Subsidy disbursed annually.
  • Excludes energy from captive power or desalination plants.
4 Telangana

Electronics industry classified as industrial units for industrial power tariff.

Certificate granted for IT industry's power connections.

Incentive applies from Certificate issue.

Electronics firms allowed renewable energy from state under open access (up to one third of total power needs).

5 Uttar Pradesh
  • 50% Electricity Duty exemption for up to 10 years for all ESDM units.

Disclaimer:

“The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received, or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation.”

Prepared On:
17/10/23



Recent Posts

17 October 2023

IT audit

18 July 2023

GST E-Invoicing

05 January 2023

What is ODI


Popular Search


Related Newsletters

Please Share:

Related News

rover

Automated Scrutiny Module: A New Era Of GST(ASMT)?

Increase the rate of Tax Collection at Source (TCS) from 5% to 20% for remittance under...

ballons

Tax Holiday For Startups (Section 80 Iac Of Income Tax Act)

Every GST registered taxpayer must file at least one or more designated GST returns ...

city

Duties And Responsbilities Of a Director In Company

In the dynamic landscape of entrepreneurship, startups are the catalysts of innovation, job creation, and economic growth...