The state of Maharashtra, a prominent player in India’s economic landscape, is amid a transformative era with its recently unveiled IT and ITES policy. This forward-looking policy isn’t just a game-changer for the tech industry rather a catalyst for multifaceted sectors, including real estate.
With a comprehensive set of incentives, subsidies, and initiatives, the policy seeks to draw substantial investments, generate millions of jobs, and position the state as one of the preferred IT hubs.
Sprouting IT hubs: Boon for Real Estate
One of the most significant aspects of this policy is the allowance for IT industries to set up tech parks anywhere in the state. This provision not only decentralizes the IT sector but also drives the demand for real estate in various regions of Maharashtra. Developers will now have the opportunity to create state-of-the-art office spaces and technology parks to cater to the flourishing IT industry.
Over the recent years, the real estate landscape in Maharashtra has also been dramatically reshaped by the presence of tech giants that have leased extensive office spaces in prime locations, further driving the demand for commercial real estate.
Stamp duty subsidies and incentives: Attracting investments
The policy offers an enticing 50 to 100% subsidy on stamp duty, effectively reducing the cost of property acquisition for IT companies. Additionally, it includes the waiver of electricity charges for 10 to 15 years, along with power supply at industrial rates and property tax at residential rates. These financial incentives will further attract IT businesses to set up their operations in the state, leading to increased demand for commercial real estate.
Job creation and export promotion
The new IT and ITeS policy are not just about creating infrastructure but also about fostering economic growth. With a target of attracting investments amounting to ₹ 95,000 crore, the policy aims to generate 3.5 million jobs, and foster exports worth ₹ 10 lakh crore. This scale of economic activity is expected to significantly influence both the commercial and residential real estate markets. Additionally, as more tech professionals move to Maharashtra for job opportunities, the demand for residential real estate is expected to rise, particularly in areas close to major IT hubs.
Industry status and essential services
The policy has addressed the need for uninterrupted IT operations. Granting the IT industry, a “continuous industry status” means they can operate 24/7, 365 days a year, ensuring a seamless working environment. Furthermore, IT services have been given essential services status, ensuring the stability and reliability for the industry. This will “eliminate the uncertainty” and boost real estate development specifically in regions with data centers and IT companies.
Additional FSI and space utilization: Paving the way for affordable built-up space
In a scenario where land availability is dwindling and costs are on the rise, the concept of additional FSI (Floor Space Index) has gained momentum. The approach grants additional FSI over the base FSI, thus expanding the scope for construction. This policy not only addresses the growing need for space but also ensures that entrepreneurs and businesses can secure affordable built-up areas to operate in. The availability of this extra space will lead to elevated cityscapes and cost-effective solutions for companies looking to establish or expand their businesses in Maharashtra.
Spurring integrated IT township development
The 2023 Policy has reduced the threshold of the minimum area to be notified as Integrated Information Technology Township (IITTs) from 25 acres to more attainable 10 acres of contiguous land. What’s more, this policy introduces a new paradigm in land utilization, allowing a 50-50 split for IT/ITES use and unrestricted usage according to prevailing norms, as opposed to the earlier 60-40 division. These changes are poised to shape the real estate landscape, facilitating more flexible and innovative real estate developments in the state.
Moreover, the relaxation of norms for integrated IT townships promises to revolutionize urban living on multiple fronts. The evolution of technology cities will further enrich the “walk-to-work” concept by seamlessly integrating workplaces with residential living spaces. This approach will not only redefine the dynamics of urban life but also stand as a transformation factor within the real estate sector.
Overall, Maharashtra’s visionary IT and ITES policy is most likely to influence the real estate landscape in the state. By offering lucrative incentives, enabling infrastructural developments, and supporting IITT developments, the policy aims to transform Maharashtra into an IT hub of global prominence. In the process, it is poised to drive unprecedented growth and expansion in the real estate sector, creating a symbiotic relationship that promises opportunities for developers, investors, and, most importantly, the people of Maharashtra.
(This article is authored by Sanjay Dutt, MD & CEO, Tata Realty and Infrastructure Ltd)
