West Bengal IT Policy 2003

West Bengal has been one of India’s fastest growing states in the last decade, with
a 5.2% growth in per capita net SDP. Over the three year period (between 1998-99 and
2000-01), it has also ranked as the fifth most attractive destination1 for investments.
Going forward, the state has identified IT as a priority focus sector to be developed into
a growth engine. This focus is reflected in the fact that West Bengal was among the first
states to articulate an IT policy (formalised on 1st January, 2000). This was followed by
a special incentive scheme introduced in November 2001.
In recent times, there has been explosive growth in the IT-Enabled Services 2
segment, which has recorded over 100 per cent growth in employees in the last 5 years.
And it is expected to grow much faster than IT services in the short term. This nascent
opportunity, coupled with the specific needs of the ITeS companies, has prompted the
Government of West Bengal to articulate a focused ITeS policy (formalised in August
2002).

CORE OBJECTIVE OF THE NEW IT POLICY

The State has developed the new IT policy keeping in mind the enhanced opportunities
that IT will unleash over the next decade. These opportunities will allow corporates to
create immense value, provide significant opportunities for talent development and
employment, and enhance efficiencies in governance and social service. Therefore, the
core objective of the new IT policy is to allow different constituents within the State to
leverage this opportunity.
The aspirations of the State’s IT initiative are composite and well-rounded. The
focus will not be limited to making the State the most attractive destination for IT
investments. In addition, the State will leverage the IT opportunity for upliftment of the
quality of life within the State.
In light of the new ITeS policy and the progress made by the State in the last three
years, the Government feels the need to revise the existing IT policy to continue to
underline the focus on the IT sector as well as give it new direction. Consequently, this
policy document has been created to reflect the needs of the IT sector as a whole. It also
highlights the progress made by the state since the January 2000 policy and defines

1 As per the Central Statistical Organisation (CSO)

2 ITeS includes services like back office operation, call centre, content development/ animation, data processing, engineering
and design, geographic information system services, insurance claim processing, legal database, medical transcription,
payroll processing, remote maintenance, revenue accounting, support centre and website services
additional regulatory support measures to boost the growth of IT in the state. This
policy complements the new ITeS policy by focusing in detail on the IT services
segment. Hence it should be read in conjunction with the new ITeS policy as well as the
incentive scheme of November 2001.
This document explains the new IT policy and consists of four sections:
1. Information Technology in public life
2. West Bengal’s IT vision
3. West Bengal’s winning position on the enablers required to succeed in the
sector (with specific reference to the IT services sector)
4. The regulatory support offered to investors.

INFORMATION TECHNOLOGY IN PUBLIC LIFE

The State considers IT as a basic mission that can help the people uplift the standard of
social life. It is clear that people will embrace IT only if it is able to add value to their
daily life. The State will strive for a situation where every citizen is able to leverage IT.
However, individual ownership of the facilities by all the citizens will remain a utopia.
Therefore, the State's approach will be to provide community possession of IT
hardware, software and accessories that will be adequately networked with the external
world.
The State has undertaken an aggressive e-Governance policy to connect almost 3600
local self-governments (Gram Panchayats ) and all the Municipalities. These
democratically elected Panchayats and Municipalities, empowered with IT, will ensure
community participation of people. This IT network will provide all necessary
information of the State to its people, and simultaneously allow the people to provide
inputs to the State’s decision making authorities. This, in turn, will guarantee a true
participatory and transparent decision making process. The State's long tradition of a
truly decentralised development approach will enable IT to reach its people. With this,
the State will have emerged as an IT-enabled State in its fullest meaning.
The state plans to create a conducive environment for the participation of NGOs (Non
Governmental Organisations) to take the impact of IT to the common man. In this
regard, we plan to encourage NGO to take up specific initiatives.

THE STATE HAS SET AGGRESSIVE TARGETS IN IT

West Bengal has registered steady growth in the IT sector with a CAGR of 90 %
in the period between 1996-2003. Currently (2003), its STPI export revenues stand at
Rs 1200 crore. It has also managed to attract major IT and ITeS players to West Bengal
like Tata Consultancy Services, Cognizant Technology Solutions, ITC Infotech,
Computer Associates, SchlumbergerSema, Siemens, The Chatterjee Group, IBM,
Wipro, Spectramind, Samsung and United Airlines. The state recognizes that the
potential is far higher, given its intrinsic capabilities. It has, therefore, set significantly
higher targets in both IT Services and ITeS.
A study by McKinsey&Company has helped create the state’s IT vision and
draw up a roadmap for success in the sector. The aspiration set for West Bengal is to
rank among the top-3 IT States in India by 2010 and contribute 15-20 per cent of the
country’s total IT revenues. The focus in the long term will be on high value-added IT
work, developed through intellectual leadership and supported by Government
initiatives. This approach emulates the approach displayed by the world’s premier
technology hubs (such as Boston, Dublin and Singapore) that have developed through a
combination of corporate leadership, intellectual leadership or government leadership.
The vision is in tune with the goals set in 2000 to “build on the state’s creative
intellectual wealth and focus on one or two areas of excellence for rapid growth as well
as stimulate the growth of IT enabled services and back office support services”.
The vision has been broken down to targets at the segment level. In IT services,
the state is targeting 10-15 per cent of software services exports, 25 per cent of all
product development/R&D outsourcing and 5-10 per cent of domestic software services
and products. In ITeS, it is targeting 15 per cent of BPO3 revenues (transaction
processing and customer interaction services, including call centres) and 10 per cent of
revenues in other service segments like animation, knowledge services and engineering
and design services (including a leadership position in knowledge services and
animation). Assuming growth the India IT space as per projections made by Nasscom,
we believe IT & ITeS will be able to create employment opportunities for 400,000
people. In terms of revenues of IT companies, the state’s vision will translate into total
revenue of US$ 15 billion by 2010. This will imply a CAGR (cumulative annual growth
rate) of 65-75%.
The state is well positioned to achieve this vision. It has a high quality and low
cost talent pool of graduates and engineers. Its IT policy offers incentives that can
greatly reduce the one-time and recurring expenditure of IT companies. West Bengal is
the only large state with surplus power and its telecom infrastructure is comparable with
all other IT destinations. The state also recognises the strategic imperative faced by IT
companies to be vertical focused. The state intends to support this over the longer term
by helping development of centres of excellence in key industry verticals. Initial focus
will be on developing four verticals: financial services and banking, insurance, discrete
and process manufacturing and retail and distribution. Besides, the state has a strong
creative tradition of different fields of entertainment related IT and ITeS activities e.g.
animation that will significantly help it in attaining its vision.

3 Business Process Outsourcing

 From the beginning, the state has realised that government initiatives to increase
IT usage will play an important role in creating internal demand and spurring growth in
the industry during the formative years. Some broad initiatives were identified in the
goals set in January 2000, namely:
• Set up a state wide delivery backbone to support e-governance, e-
commerce, distance education and provide an efficient government-
citizen interface
• Transit to an IT enabled government by adopting e-governance
appropriately
• Address IT in education to produce IT professionals, proliferate an IT
culture at the gross-root level and promote specialised education
institutions
In the last three years, the state has made significant progress in these initiatives.
Today, WBSWAN (West Bengal State-wide WAN), developed by WEBEL and Tata
Infotech, connects Kolkata to over 19 district headquarters and nine other important
townships in the state. In the second phase, 340 blocks and 3,600 panchayats are
planned to be covered.. This network forms the state’s IT backbone and over time can
offer the opportunity for private companies to leverage it to connect to their suppliers,
distributors and consumers.
The Department of Information Technology facilitates the development of IT in
the state. Specific e-governance projects undertaken include the use of the ASP 4 model
and government portals in collaboration with TCS to provide public interface to
government information, GIS (geographical information system) for municipalities and
computerisation of government departments (including land records). The state has
already introduced significant computerisation in several government departments,
district offices, field level agencies and local bodies. Some of the key Departments like
Finance, Home including Police, Land and Land Reforms, Panchayat & Rural
Development, Transport, Commerce & Industries, IT, Labour, Environment, Higher
Education and School Education have implemented major e-Governance initiatives in
recent years. . It has also introduced a 'state of the art' computerised system in the
Directorate of Commercial Taxes, full automation in all treasuries, smart cards for
registration certificates and driving licenses, digitisation of land records in all blocks
and is piloting a kiosk based land records data retrieval system.
The state has also launched an aggressive IT literacy programme in schools and
colleges in collaboration with IBM, Wipro, NIIT and others. Some initiatives include
the provision of hardware and software to schools as part of the school IT literacy
programme (500 schools have been covered); the training of school and college
teachers, the setting up of 10 polytechnics for courses in IT and computer science and

4 Application Service Provider

technology and a distance learning programme with IBM. The school IT literacy
programme is being extended to all schools in phases. Phase-I is already complete,
Phase-II will have 2,500 schools covered by 2003-04 and during the next three years all
11,000 schools are proposed to be covered.
The state has also made progress in terms of high quality infrastructure through
the STP and privately promoted software parks. And the November 2001 incentive
scheme and the August 2002 ITeS policy are by far the most generous fiscal
incentive and regulatory support package currently being offered to investors in
India.

THE STATE IS WELL-POSITIONED ON THE KEY ENABLERS

REQUIRED FOR SUCCESS

The key enablers required to support the ITeS industry have already been outlined in
the August 2002 ITeS policy. While the five key enablers required to support the IT
services industry are the same, the emphasis is different and is detailed below. The key
enablers are: availability of good quality talent, low cost of operations, availability of
high quality infrastructure, government support and investor facilitation. A detailed
analysis shows West Bengal to be very competitive on all these dimensions.

1. A large good quality talent pool

The State's rich talent pool provides significant advantages to all knowledge-based
industries such as IT. The IT-related education programme of the State will open up
avenues to further enrich this talent pool.
The State recognises that expanding the talent base will be central to the success of its
IT initiative. The State has undertaken a programme to expand basic computer literacy
among students in 11,000 Secondary, Higher Secondary and Madrasa schools within
the next three years. This programme will cover nearly four million students. The basic
nature of IT education will be closely related to market-demand. In order to ensure this,
the State will work with appropriate private partners. Such interactions will ensure that
the content of IT education is aligned to the specific demands of the human resources
market.
West Bengal has a large pool of quality talent and has historically enjoyed very low
attrition rates:
1.1 Large pool of engineers and analytical graduates: West Bengal has the
highest per capita spending on education among large Indian states. This is
reflected in the huge annual intake of undergraduate students (13,000
students for engineering courses and 105,000 for science graduate courses).
There are 52 engineering colleges in West Bengal. The state also has an
existing pool of over 15,000 experienced IT professionals with more being
 created every year (NIIT has more centres in Kolkata than Hyderabad,
Bangalore or Chennai).
1.2 Good quality talent pool: The quality of talent available is demonstrated by
the fact that over 20 per cent of IIT students belong to this region. A
significant section of the NRI entrepreneurship at Silicon Valley too belongs
to this region. In addition, premium educational institutes like the Indian
Institute of Technology, Kharagpur (IIT-KGP), Indian Institute of
Management, Calcutta (IIMC) and the Indian Statistical Institute (ISI) are
located in the state. Two of its graduate colleges, Presidency and St.
Xavier’s, are ranked among the top-10 degree colleges in India.
1.3 Domain knowledge in financial services, insurance, manufacturing and
travel/ logistics: The local talent has domain knowledge in these verticals
due to the presence of local industry:
y Financial services: Three banks are headquartered in Kolkata, while over
15 foreign/private banks are present in the city and over 4,600 bank
branches are present in the state.
y Insurance: Kolkata is one of the largest insurance centres in India. It is
home to the National Insurance Corporation and the Eastern headquarters
of the Life Insurance Corporation (with 29 % of their nationwide agents).
Most private sector insurance players have also started operations here.
y Discrete and process manufacturing: West Bengal’s engineering sector
employed about 3.15 lakh people in 5,000 units in 1999. It is home to
several major discrete manufacturing units (Videocon, ABB, India Foils,
etc.) and process industries (Haldia Petrochemicals, Mitsubishi
Chemicals, steel, cement and oil and gas units).
y Travel and logistics: West Bengal has one of India’s largest port
complexes (Kolkata and Haldia) and acts as the logistics hub for 11 states
in eastern India.
• Artistic and creative talent: West Bengal is the prime source of artistic
talent in India. It has a strong tradition of visual arts, is the home for
modern Indian theatre and cinema. Creative tradition of the State in
different fields of entertainment related IT and ITeS activities e.g.
animation that will significantly help it in attaining its vision.
1.4 Low attrition rates: Historically, Kolkata has enjoyed low attrition rates as
compared to the industry averages (estimated at 10 percent against industry
benchmarks of about 20 percent).
1.5 State-level initiatives to ensure availability of quality talent: The state
realises the importance of high quality talent and plans to launch a series of
initiatives to ensure its continued availability for IT companies. In this regard
 the state has institutionalised an Academic Council that will advice the
government on these initiatives. The state has also formed an Industry
Academia forum to facilitate regular communication on pertinent issues
(e.g., updating of curriculum based on the needs of the industry). Some of the
initiatives that the state is considering are:
y Ensuring adequate engineering talent: The state plans to take initiatives
to ensure adequate seats in existing colleges and sufficient new colleges,
required number of high quality faculty and the inclusion of foreign
language education in the curriculum of engineering colleges. To ensure
successful execution of this strategy, the state will draw up a public-private
funding model that will ensure that necessary investments are made in this
sector. It will also take steps to ensure the financial self-reliance of
government colleges and viability of private colleges.
y Attracting middle and senior management talent: The state plans to take
initiatives to improve the social infrastructure required to attract and retain
middle and senior management

2. Significantly lower cost of operations

Kolkata offers IT players one of the lowest operation costs in the country. This is
reflected in the low CMIE consumer price indices 5 , compared to other key IT
destinations in the country (355 for Kolkata compared to 454 for Chennai, 413 for
Bangalore, 410 for Hyderabad and 401 for Delhi). Also, the low attrition levels in
Kolkata reduce the training costs incurred by employers. The state’s transport system
offers one of the lowest transport costs
In addition, the state offers best-in-class fiscal one-time and recurring incentives to
IT companies. These incentives further strengthen the value proposition of Kolkata as a
low-cost centre.

3. High quality infrastructure

The state has strengths in all areas of physical infrastructure. This includes
international telecom connectivity, physical and social infrastructure and power supply.
Kolkata is also well connected to international destinations in Asia, Europe and the US.
3.1 Telecom connectivity: Kolkata offers about 580 Mbps of international
satellite connectivity through VSNL and STPI. About 70 per cent of this
bandwidth is available to new players. The state is now planning to set up two
more earth stations at Kharagpur (near IIT) and Durgapur. Cable connectivity
is provided through leased BSNL lines to Mumbai and onward connectivity
through submarine cables. Besides BSNL, private players like Reliance

5 CMIE Consumer Price Index (urban non-manual labour)

 Infocomm and Bharti Telesonic are in the process of connecting Kolkata as
well. In addition, multiple local loop options are available from BSNL, STPI
WLL/OFC.
3.2 Availability of built-up space and land: Kolkata offers excellent walk-in
physical infrastructure. These include the STP II in the Salt Lake IT hub and
privately constructed parks like Bengal Intelligent Park (BIP) and Infinity. These
house over 170 IT/ITeS companies, employing some 15,000 IT professionals. In
addition, the Government makes plots available for new IT projects at the highly
subsidised rate of about Rs 40 lakh per acre, which is 15-20 per cent of the
market price. WEBEL plans to create a new IT infrastructure over a 10 acre plot
of land in New Town. The urban infrastructure in the New Town is to have a
special focus on the growth of knowledge based industries and will encourage
creation of social infrastructure required to sustain the growth.
3.3 Continuous supply of high-quality power at a low cost: Its high
investments in power generation over the last 10 years have made West Bengal
one of the few power-surplus states in India. In fact, in their recent surveys, both
Nasscom and Gartner have ranked Kolkata as the best place in the country on the
dimension of power infrastructure. The high percentage of thermal power
ensures that the supply is not adversely affected during dry season.
3.4 Availability of social infrastructure: The Government recognises the
importance of social infrastructure in attracting senior/middle management talent
to Kolkata. The city has excellent social infrastructure in place. These include
social, sports, rowing, swimming and golf clubs of international repute; cultural
centres, recreational centres; excellent hotels; some of the best schools in India;
privately managed hospitals and a range of tourist destinations nearby. To further
improve facilities in and around Salt Lake, a dedicated team has been drawn up
from the IT companies that have a presence in the area. Hyatt Regency and IT
Sonarbangla Sheraton has started their operations in the city and both these
facilities are located in the Salt Lake area
3.5 Good connectivity to international locations: Kolkata is well connected to
prime locations overseas and in India. These include the prime Asian hubs of
Bangkok and Singapore as well as key Western locations such as London, San
Francisco and New York. The city is also well connected to important domestic
locations through daily flights.

4. Government support

The state realises the important role that government initiatives that increase IT
usage play in creating internal demand and spurring growth in the industry during the
formative years. It also realises that increased IT literacy improves both the demand for
IT as well as the supply of trained IT workers. Hence it has already taken multiple e-
governance and IT literacy initiatives.
 However, the government recognises that most of the current e-governance
initiatives are still department centric and information based. It intends to quickly move
to transaction-based applications (i.e. enable actual processing of transactions online)
and then further to the launch of user centric applications (e.g., a one stop shop
government portal). It also intends to increase the intensity of the IT literacy efforts to
address more people (especially government servants) as well increase the
sophistication of the training. To ensure successful execution of these initiatives, the
state will draw up a public-private funding model that will ensure that necessary
investments are made in this sector. These initiatives have also been supported through
the regulatory framework and incentives detailed in the ‘Regulatory support’ section.
The Government has addressed most issues related to IT operations. These
include permission for women to work at night, permission to run three shifts
irrespective of national holidays, relaxation in building and zoning laws (e.g., ability to
construct centres in residential areas), exemption from zoning laws for purposes of
regulations, exemption from statutory power cuts and exemption from purview of West
Bengal Pollution Control Act (except for diesel generator sets). These are discussed in
more detail in the ‘Regulatory support’ section
5. IT Promotion cell
The Government of West Bengal has started an IT Promotion cell 6 from Auguest
2003. The cell reports directly to the Minister-in-charge Information Technology and is
led by the Principal Secretary, Department of Information Technology. This cell will
play a crucial role in helping investors setting facilities in the state and also provide
them with information (e.g., real-estate available, details of colleges & schools, contacts
of IT companies already present) regarding the state. The promotion cell will be
focused on two fronts - 1) Investor promotion, 2) Strengthening the IT infrastructure in
the state through dedicated officers who are in charge of specific initiatives. As a part of
this cell, the state has already started a mechanism of continuous feedback from IT
companies located inside the state
6. Single-window agency for IT investors
At the operational level, the Government has made it easy for investors to set up
operations in Kolkata through Webel 7 , which is the single-window support centre for
all IT investors in the state. This policy document announces the formation of support
structures for the single window system and lays out the policies and procedures by
which it will be run.
The IT department has a website (www.itwb.org) which provides the required
information for IT investors. The government intends to add transaction capability and

6 Contact details of the cell are available on www.itwb.org

7 www.webel-india.com
the facility to submit forms online to this website. This website will be upgraded to a
Portal designed to take the single window system online.
Investors looking to set up operations in West Bengal will need to submit only
one form to Webel. The organisation will provide a dedicated escort officer to
companies investing more than Rs 1 crore in the state. The Principal Secretary,
Department of IT, will personally supervise investments of more than Rs 5 crore. The
Managing Director of Webel, General Manager-IT, and General Manager-
Infrastructure Services will be personally responsible for ensuring ease of setting up
operations for IT investors. Webel will help companies in obtaining building space on
rent/lease and in purchase of land, interact with Government bodies such as Telecom
providers, WBSEB (power connections) and the local municipality (building
clearances) to minimise the company’s exposure to multiple authorities. Further, the
STPI has authorised Webel to grant registrations on its behalf.
A high-powered committee of secretaries under the Chief Secretary is being
created to resolve all multi-departmental issues. The committee will be headed by the
Chief Secretary, with Principal Secretary to the Chief Minister, Principal Secretary,
Finance, Principal Secretary, Commerce and Industries and the Principal Secretary, IT
(convenor) as members. Other department heads will be invited on an as-required basis.
The committee will ensure a response on a company application within 14 days of its
submission. This committee will also monitor the implementation of major projects
being undertaken by the State Government towards the development of the IT sector.
Issues that can not be solved at the level of committee of Secretaries will be
forwarded to the Cabinet Committee on Information Technology. The Chief Minister
will chair this committee and its members will include the Finance Minister, the
Commerce and Industries Minister and the IT Minister. Other ministers will be invited
on an as required basis. This committee will meet once a month to push the process on a
case-by-case basis (as required). It will also monitor and implement the outlined
policies at the apex level.
• The state government has enjoyed the benefits of inputs from industry
leaders in the past and especially in the last year while it has created an IT
vision and a roadmap to achieving the vision. The government intends to
continue soliciting inputs from industry in a structured fashion.

INVESTORS TO GET BOTH REGULATORY SUPPORT AND FISCAL

INCENTIVES

The Government has evolved a best-in-class package of fiscal incentives and

regulatory support to investors.
A. Supportive regulatory framework set up for investors

Based on the inputs received from investors, West Bengal has granted the following
non-fiscal incentives to IT investors to help their day-to-day operations.
1. Procedures under existing labour laws simplified to ensure smooth operations
In IT, where human resource inputs are highly flexible and mobile, the Government
recognises the need to simplify procedural framework under the existing labour
laws. Accordingly, the Government is committed to move from a regulated
administration framework to a promotional framework to facilitate smooth
functioning of the business.
1.1 All IT companies are granted the status of ‘Public Utility Service’ providers
under the Industrial Disputes Act, 1947. The majority of employees in IT
organisations are outside the purview of the ‘blue-collared worker’ class.
However, in view of the Government’s understanding of the primarily export
oriented nature of work and hence the need for 24x7 operations of the IT sector,
the Government has decided to classify the IT sector as a ‘Public Utility
Service’.
1.2 All IT units are deemed ‘establishment’ under the purview of the West Bengal
Shops and Commercial Establishments Act, 1963.
1.3 Given the round-the-clock nature of work that is part of the IT industry, the
Government grants it permission to work on a 24x7 model. These units are also
exempt from the following provisions of the West Bengal Shops and
Commercial Establishment Act, 1963:
y Closing an establishment and granting of a weekly holiday under Section 5
(1) of the Act, provided that every individual has at least one day off every
week and a compulsory day off in lieu of working on bank holidays. This
would enable the IT companies to run their operations on all seven days of
the week
y Opening and closing hours under Section 7 (1) of the Act. This would
enable the IT industry to run a three-shift operation
y Working hours’ stipulation under Section 7 (2) of the Act. This will enable
‘flexitime’ operations for its employees
y Enabled to engage female employees between 8 pm and 6 am, under
Section 10 (b) of the Act subject to (i) Special arrangements being made
for protection of female employees during these hours; (ii) Female
employees being employed jointly or in a minimum group of 10 female
employees; (iii) Arrangement of a separate rest room for female
employees; (iv) A minimum of 50 people to be employed during these
hours (including female employees)
 1.4 Under section 13 of the West Bengal Shops and Commercial Establishment Act,
1963 the IT companies will now have an option of giving compensatory day off
to an employee if the quantum of work exceeds 48 hours a week.
1.5 Under the Employment Exchange Compulsory Notification of Vacancies Act,
1959, IT companies will be required to send a consolidated report every quarter on
the vacancies to the concerned employment exchange. The exchange will, however,
sponsor names only when specifically requested to do so by the company.
2. Self-certification allowed for IT companies on various acts
Having regard to the Government’s responsibility envisaged in the Acts and
Regulations mentioned below, the Government permits self-certification to IT
companies to the extent possible.
y Payment of Wages Act
y Minimum Wages Act
y Contract Labour (Regulations & Abolition) Act
y Workmen’s Compensation Act
y Employees State Insurance Act
y West Bengal Shops and Commercial Establishments Act
y Payment of Gratuity Act
y Employees Provident Fund and Miscellaneous Provisions Act
y Maternity Benefits Act
y Water and Air Pollution Act.

3. IT companies awarded special status under various acts to improve

infrastructure availability
In addition to the exemptions mentioned above, IT companies are given the
following facilities:
y Automatic clearances under the West Bengal Pollution Control Act, except
in respect of power generation sets (already granted under West Bengal IT
Incentive Scheme, 2001)
y Exemption from statutory power cuts (already granted under West Bengal
IT Policy 2000)
y Exemption from zoning regulations on application of company
4. Structural policy changes made to boost the growth of IT in the state
The state government realises the need for additional structural changes to boost the
growth of IT. It commits to making the following changes within a timeframe of
one year.
y Support for business continuity plans: The state government realises the
importance of such plans given global events (e.g., 9/11). It will draw upon
its geographical proximity and historical relations with the governments of
the nearby countries (e.g., Singapore, Thailand, Malaysia) to support IT
companies in evolving multi-country business continuity plans. The
support will be in the form of assisting the companies in discussions with
these countries. Such plans would envisage an alternative country ‘warm
site’ to act as a backup to the main site in West Bengal.
y Data protection: The state intends to define a data protection act (this will
lay out the nature of information protected under the law, set up a
regulatory authority to ensure enforcement, declare penalties for violation,
etc.) to help both IT and ITeS companies provide additional comfort to
their customers.
y IT security: The state government is committed to initiating legal
proceedings against people compromising the security of government
databases (i.e., hacking into government databases) and supporting
aggrieved companies in initiating proceedings in similar offences against
company databases.
y Online government: The state government intends to move towards
accepting payments online along with the acceptance of digital certificates
in lieu of signatures for the submission of various government forms /
applications. The government will also issue all government notifications
online and through the gazette simultaneously.
y Anti-piracy measures: This policy document declares West Bengal a zero-
piracy state. The government has set up an anti-piracy cell to review
serious piracy cases and initiate appropriate action. The mandate of the e-
governance committee is extended to include steps to increase awareness of
anti-piracy measures in various departments and initiate the move towards
setting up of compliance infrastructure.
y Industry-academia collaboration: Webel will assist IT companies in
obtaining any academic / R&D support they require from the appropriate
institutions (e.g., Indian Institute of Technology- Kharagpur, Indian
Institute of Management- Calcutta, Indian Statistical Institute, Jadavpur
University).
y Increased support for feeder industries: Webel will assist support services
(e.g., infrastructure developers, training institutes, transport companies and
 other support services) in obtaining government clearances and support.
Such assistance will be triggered by a request from an IT company.
y Digital divide: The state government recognises the potential social issues
thrown up by the ‘digital divide’, i.e. the lack of access of the poor to IT
and its benefits. It intends to address these issues early on by exploring
means of reducing this divide. Some potential measures include free for
public use internet kiosks, public terminals in government schools and
other public places and free IT literacy classes for the poor.

B. Fiscal incentives for IT investors

The West Bengal IT Incentive Scheme, 2001 offers fiscal incentives that are
significantly more competitive than those offered by any other state. The IT
investments have been included in the scheme that enables them to avail of the fiscal
incentives. Please refer to the West Bengal IT Incentive Scheme, 2001 (available on
www.itwb.org) for details regarding the scheme.
In order to ensure that the scheme stays current, the following additions /
modifications (highlighted in italics) have been made to the scheme:
1. One-time fiscal incentives
y Exemption from consumption tax: As per section 2(b) of the State Tax
on Consumption or Use of Goods Act, 2001, IT companies are exempted
from consumption tax on computer hardware, computer peripherals and
other capital goods including captive power generation sets during the
implementation stage
y Quality linked incentives: In pursuance of high quality standards by the
state, IT companies in the small scale sector will be reimbursed 50 per cent
of the expenditure incurred by them to obtain ISO/ ISO 9000 certificate or
SEI-CMM Level 5 or COPC-2000 or eSCM level 3 with a ceiling of Rs 5
lakh
2. Recurring incentives
y Converting interest subsidy into training subsidy: Within the limits of
eligibility, an IT company can choose to convert part of its interest subsidy
(as defined in the West Bengal IT Incentive Scheme, 2001) into a training
subsidy to pay for the training of its employees in West Bengal. This will
help support the government’s aim of increasing IT literacy in the state.
y Preference for West Bengal units in award of e-governance projects:
An IT company with an office in West Bengal and employing a minimum
of 20 % of its total workforce in its West Bengal operations, and otherwise
compliant with the tender requirements, shall be entitled to 5 % price
preference for all West Bengal government e-governance projects. Given
 the scale of West Bengal’s planned e-government initiatives, the
government believes that this could be a huge source of opportunity for the
IT industry in the state.
y Special incentives for mega-projects: For mega-projects that require
investments exceeding Rs 25 crore and employ more than 750 people in
their first year of operation, the Government may consider a Special
Package of Incentives on a case-to-case basis. Specifically, for companies
with plans to set up large centres, the state may consider a graded
incentive package that would increase the incentives offered per employee
with an increase in the planned size for the centre.

The Government of West Bengal strongly believes that this policy will
create an enabling regulatory framework for IT, attract investments and sustain
the huge initial momentum already generated in the sector.