Maharashtra becomes first state to clear policy to promote use of technology in financial services
To make Mumbai and its adjoining areas as “fintech capital of the world”, the cabinet passed a policy to help start-ups in the sector — a first in the countryUpdated: Feb 07, 2018 01:11 IST
With an eye to promote cashless economy, reduce carbon footprints, boost indigenous production of defence equipment and create jobs in small and medium units, the Maharashtra cabinet announced a raft of incentives on Tuesday.
To make Mumbai and its adjoining areas as “fintech (the financial technology) capital of the world”, the cabinet cleared a policy to help start-ups in the sector — a first in the country. Fintech refers to use of technology in financial and banking services (eg. e-wallets, retail banking etc).
Apart from the fintech policy, the state government cleared policies for defence and aerospace, electric vehicles, logistics, textile, garments, gems and jewellery, and coir (coconut fibre) etc. The policies, officials said, were unveiled strategically before the ‘Magnetic Maharashtra’ conclave. The three-day global investors’ summit aims to rake up investments of around Rs10 lakh crore.
To promote defence and aerospace production, the government also plans to set up units in Pune, Nashik, Ahmednagar, Aurangabad and Nagpur.
Under the fintech policy, the state government plans to create an environment where start-ups would be nurtured and allowed to grow as it has announced a slew of incentives for the first three years. The state government will support 300 fintech start-ups in the next three years.
The state government intends that the state should emerge as the one of the top five fintech hubs in the world in the next five years. “We want to make the Mumbai Metropolitan Region (MMR) the fintech hub of India. Mumbai is ideally suited to be a fintech hub as it is the country’s financial capital,” said SVR Srinivas, principal secretary of the state information technology department.
The state government is working on setting up International Financial Services Centre (IFSC) and confident that it will emerge as top player in the fintech sector. According to the policy, the state government plans to keep a corpus of Rs250 crore to support such start-ups.
The policy has proposed to give an additional carpet area for work space. “To make office spaces affordable, we are giving them some benefits of extra built-up area and subsidies for website hosting,” Srinivas added. In central Mumbai, 10,000 sqft will be reserved for fintech companies, the policy added.
The cabinet has lined up incentives for the electric vehicle industry. The state also unveiled a defence and aerospace policy aiming to create 1lakh jobs and attract $2 billion in investments. The state government will set aside Rs1,000 crore to provide initial working capital to the small and medium enterprises in defence and aerospace.
“The basic objective is to reduce India’s dependence on imports, and Maharashtra is well placed to capitalise on that. The five hubs that we have selected are well-equipped to take up mega projects from the sector,” said Sunil Porwal, principal secretary of the industries department. Porwal added that in companies in each of the hubs will be provided land at a cheaper rate. The state cabinet also extended the Maharashtra Industrial Policy of 2013 for another six months, while it prepares a new one.
The state cabinet cleared an industrial policy to facilitate allotment of specially designed industrial complexes (flatted galas) for manufacturers of readymade garments, gems and jewellery and miscellaneous engineering goods.
Helping ’em stand on their feet
The state has listed several incentives to promote defence production, textile industry, electric vehicles and use of technology in financial services. Here are some of the highlights of these policies:
Maharashtra Fintech Policy 2018
The Maharashtra government will support 300 start-ups in the next three years
It will set aside Rs200 crore in venture capital
Eighty-five per cent of the built-up area will be reserved for start-ups in the financial technology (fintech) sector. Fintech refers to use of technology in financial and banking services (such as e-wallets, retail banking)
In central Mumbai, 10,000 sq ft will be reserved for fintech companies; and co-working spaces will be provided at reasonable rates
Fintech start-ups with an annual turnover of up to Rs25 crore will get 10 lakh annually for a period of three years
Internet charges and electricity bills will be reimbursed and fintech startup will get Goods and Services Tax rebates
These start-ups can avail web hosting at subsidised rates and taken part in exhibitions with the state reimbursing the participation fees
Defence and Aerospace Policy 2018
The state will set up five defence hubs in Pune, Nagpur, Ahmednagar, Nashik and Aurangabad
It will give a mega project status to defence and aerospace companies with a minimum fixed capital investment of Rs250 crore and employing 500 people in industrial areas in the category A and B. For other industrial areas, it will give a mega project status to companies with a minimum fixed capital expenditure of Rs100 crore and employing 250 people
To ensure that the state’s micro, small and medium enterprises in the defence and aerospace sector do not have a crunch of capital and working capital, the state will create a corpus of Rs1,000 crore. The Maharashtra Industrial Development Corporation (MIDC) will manage the fund on behalf of the state government
Maharashtra Electric Vehicle Policy 2018
The state government incentivise the first 1lakh electric vehicles (70,000 two-wheelers, 20,000 three-wheelers and 10,000 four-wheelers) for a period of five years
Private owners will have to pay 15% less than the total cost, with a maximum limit of Rs5,000 for two-wheelers, Rs12,000 for three-wheelers and Rs 1 lakh for cars. They will get this amount in their bank account within three months of purchase
Electric vehicles will be exempt from road tax and registration fees
Vehicles will be charged at per the residential rate
Permission to create charging stations at existing petrol pumps will be given as per regulations and fire safety norms
The first 250 charging stations for two-wheelers, three-wheelers, light commercial vehicles and buses will get a 25% capital subsidy, with a maximum limit of Rs10 lakh per station
Maharashtra Textile Policy 2018
The policy aims to strengthen the cotton industry, and revitalise silk industry and fiber production
It aims to create 10 lakh jobs from all industries, including cotton, silk, wool and non-traditional yarn (bamboo, grass, coconut etc.)
A 5% subsidy will be given to non-traditional yarn production, textile production and technical textile sector
Such units will be get power supply at reasonable rates
The policy has proposed a 25% discount for modernisation of plain powerlooms
The state will provide a 5% capital grant for investment of Rs500crore and above in the textile sector
Maharashtra Logistics Park Policy 2018
The Maharashtra Industrial Development Corporation (MIDC) is the special planning authority to set up of a logistics park
Bhiwandi, Panvel, Taloja, Nashik, Aurangabad, Talegaon, Nagpur have been designated as ‘Logistics Zones’
For the development of an integrated logistics park, floor space index (FSI) of 1 or the prevalent FSI in the area will be given
An additional FSI up to 200% of the base will be accorded by charging a premium/fee
Power will be supplied at the industrial rates
Readymade Garments, Gems and Jewellery
According to the industries department, many small garment manufacturing units and diamond cutting and polishing units are functioning in the city. The policy plans to give several non-fiscal benefits to these units in the unorganised sector to boost its marketability and productivity
Non-fiscal incentives such as flat ‘galas’ will be given to shift their businesses or special zones will be created in consultation with the local planning body
Additional FSI, in consultation with the local planning body, at certain locations, will be provided to create a garment hub or a diamond hub