IndiaFilingsIndiaFilings

Sreeram Viswanath

Expert

Published on: Sep 17, 2026

Uttar Pradesh Information Technology and Startup Policy 2016

India, besides its other unique facets, is renowned for its expertise in the Information Technology (IT) domain. It ranks third in the world among the world's largest startup hubs with more than 4,750 startups. The Uttar Pradesh Information Technology and Startup Policy 2016 is a part of the #startupindia initiative. The policy is aimed at tapping the potential of the technology sector as a great harbinger of change, reaping benefits of job creation, innovation, and holistic socio-economic development. This article covers the various initiatives of the project, along with its incentive structure.

Why Uttar Pradesh?

  • Ranked among the top 10 states in ‘Ease of Doing Business’.
  • Ranked among the top five manufacturing destinations in India.
  • The State is the third largest economy in India.
  • The only State with an established Electronic Design and Manufacturing (ESDM) ecosystem.

Mission and Vision

The policy is created with the vision of leveraging Information Technology (IT) as a vehicle for the economic development of Uttar Pradesh, achieving inclusive growth to create a vibrant society with a high quality of life.

Its mission is to:

  • Position Uttar Pradesh as India’s preferred destination for IT or ITES (IT Enabled Services) investment.
  • Utilize IT as an engine of growth for Uttar Pradesh.
  • Transform physical communities into connected communities for sustainable economic growth and enhanced quality of life.

Objectives

Aligned with its vision, the scheme aims to promote Uttar Pradesh as an attractive investment destination for IT or ITES companies by facilitating a congenial, industry-friendly, and proactive climate. The objectives are:

  • Promote major cities or towns in the State as emerging Tier-II and Tier-III destinations with assistance in setting up standard infrastructure such as IT city, IT parks, etc., in the State.
  • Develop these investment nodes in Uttar Pradesh as Intelligent and Smart Cities.
  • Create a portfolio of IT-enabled services to establish an intelligent and smart investment region.
  • Establish state-of-the-art ICT infrastructure to provide businesses and users with seamless connectivity.
  • Enhance the quality of the talent pool and create more employment opportunities.
  • Develop a skilled IT workforce in the State for all sections of society.
  • Leverage IT as a platform for the socio-economic development of the State.
  • Augment the Gross State Domestic Product (GSDP) of Uttar Pradesh.

Area of Focus

The policy benefits the IT/ITES industry encompassing Startups/Entrepreneurs, MSMEs (Micro, Small, and Medium Enterprises), and large IT/ITES industries by providing substantial incentives with a conducive policy framework.

Implementation

A Policy Implementation Unit (PIU) has been established to implement this policy. The Uttar Pradesh Electronics Corporation (UPLC) is its nodal agency, with KPMG partnering in implementing and monitoring the policy.

Enabling Environment

The Uttar Pradesh Government has initiated a significant transformation by creating an enabling policy environment and undertaking proactive initiatives. The twin cities of Noida and Greater Noida have been developed as leading software and startup hubs. A state-of-the-art IT City has been established on a Public-Private Partnership (PPP) model in Lucknow. Furthermore, IT Parks have been established in cities like Agra, Meerut, Kanpur, Gorakhpur, Varanasi, Bareilly, etc.

Uttar Pradesh Startup Fund

A Startup Fund worth Rs 1,000 crores has been established to provide financial assistance to UP-based startups, enabling the resident youth to emerge as job creators.

Incubators and Incentives

Incubators have been developed at major educational institutes in the country to foster a startup culture among young entrepreneurs and innovators. The State is preparing to host the largest incubator in the country. For more information on funding opportunities, startups can explore options such as Producer Company Registration in Bilaspur, which can also help initiate financial support structures.

Single Window Clearance

A single window clearance mechanism has been instituted at Udyog Bandhu, facilitating a business-friendly climate through ease of doing business reforms.

IT City

Lucknow now houses a state-of-the-art IT City, built over 100 acres of land, with an investment of Rs. 1500 crores, aimed at employing 75,000 people. 60% of the land is dedicated to core activities, while the remaining 40% caters to non-core activities.

IT Parks

Uttar Pradesh boasts IT parks in cities like Agra, Meerut, Gorakhpur, Kanpur, Lucknow, Varanasi, and Bareilly, with plans for further expansion. Initiatives such as Educational Certificate Name Change can complement the innovation and talent development efforts in these regions.

Citizen Service Delivery

E-services are available to citizens through the internet and Common Service Delivery outlets like Jan Seva Kendra, Lokvani, and e-Suvidha.

Implementation of MMPs

Various Mission Mode Projects (MMPs) have been developed, including e-Districts, CCTNS (Crime and Criminal Tracking Network and Systems), and projects of the Department of Panchayati Raj, Commercial Taxes, Food, and Civil Supplies.

BharatNet

The State Government plans to enhance communication and connectivity by leveraging BharatNet alongside the National Knowledge Network (NKN) framework. Services like ITR Filing in Chennai can benefit from enhanced inter-connectivity and digital infrastructure.

Green Data Centre

An ISO 27001 certified UPSDC (state data centre) serves as a central data repository with all State departments linked for 24/7 public domain information usage. A centralized green data centre (SDC 2.0) is being planned, which will be cloud-ready and based on a “Pay as per Use” model.

E-office

E-office implementation across State departments aims to improve operational efficiency, reduce turnaround time, and enhance transparency and accountability within the State departments.

India BPO Promotion Scheme

BPOs in UP will receive additional capital support and incentives under the India BPO Promotion Scheme. Initiatives such as Trademark Infringement Notice in Palakkad can benefit from similar supportive policies.

M-Governance

M-Governance facilitates mobile-based applications and citizen services across government services. The State Departments have developed various mobile applications, including m-Sehat, m-Swasthya, UPOne, and UP-BUS.

Wi-Fi

The State Government plans to ensure Wi-Fi availability in specified public places, tourist destinations, and business hubs in a phased manner.

Incentives for Startups

Startups are eligible for incentives, including:

  • Sustenance Allowance
  • Marketing Allowance
  • Matching Grant
  • Incubation Incentives

Sustenance Allowance

Startups approved by the committee receive a sustenance allowance of Rs. 15,000 per month for one year.

Marketing Allowance

Marketing/publicity allowance of up to Rs. 10 lakhs is available for introducing innovative products, provided startups have secured funds of 25% of equity from recognized angels or incubators. This support is available in three phases.

Matching Grant

The State Governments match 25% of VC-invested money if the project is approved by the Institution’s Screening Committee, encouraging investment in innovative ideas.

Incubation Incentives

Registered incubators offer support through:

  • Office space and shared administrative services
  • Training services
  • High-speed Internet access
  • Networking activities and marketing assistance
  • Links to higher educational resources

Incentives for Incubators

Incubators receive incentives including:

  • Infrastructure Assistance
  • Operational Allowance
  • Mentoring Assistance

Infrastructure Assistance

Host institutes can receive a capital grant up to 50% for setting up IT infrastructure, with a maximum of INR 25 lakhs. Universities, educational institutions, PSUs, R&D Institutions, and private entities may mentor innovators, subject to Committee approval.

Operational Allowance

Selected incubators receive an annual operational allowance up to INR 5 lakhs for five years.

Mentoring Assistance

Selected incubators appoint at least two mentors, compensated on an honorary basis up to INR 2 lakhs per annum. More details about government schemes and incentives for startups can be found at Self Certification Scheme of Export Inspection.

Applications can be submitted through the page “Online Submission of Application Form” for incubators, investors, or startups. Further details can be accessed by contacting:

Policy Implementation Unit Consultant – KPMG Advisory Services Pvt. Ltd.

UPLC, Navchetna Kendra, 10 Ashok marg, Lucknow 226 001

0522-2286808/09

Back to Learn

Frequently Asked Questions

Common questions about Uttar Pradesh IT and Startup Policy 2016.

The Uttar Pradesh Information Technology and Startup Policy 2016 is a policy initiative aimed at tapping into the potential of the technology sector for job creation, innovation, and socio-economic development in the state. It is a part of the Government of India's #StartupIndia initiative.
Uttar Pradesh is considered an attractive destination for IT/ITES investment due to its ranking among the top 10 states in 'Ease of Doing Business', its position as the third-largest economy in India, and its established Electronic Design and Manufacturing (ESDM) ecosystem.
The key objectives of the policy include promoting Uttar Pradesh as an attractive investment destination for IT/ITES companies, developing investment nodes as intelligent and smart cities, creating state-of-the-art ICT infrastructure, enhancing the quality of the talent pool, and leveraging IT for socio-economic development.
The policy is being implemented by a Policy Implementation Unit (PIU), with the Uttar Pradesh Electronics Corporation (UPLC) designated as the nodal agency. KPMG is partnering with PIU in implementing and monitoring the policy.
The state government has undertaken several initiatives, including the establishment of a Startup Fund worth Rs. 1000 crores, the development of incubators at major educational institutes, the introduction of a single window clearance mechanism, and the creation of IT Cities and IT Parks in various cities.
Startups can avail of incentives such as sustenance allowance, marketing allowance, matching grants, and incubation incentives, which include benefits like office space, training services, and networking activities.
Incubators are being supported through incentives like infrastructure assistance (capital grant for setting up IT infrastructure), operational allowance (up to five lakhs per annum for five years), and mentoring assistance (honorarium for mentors).
The policy aims to leverage IT as a platform for the socio-economic development of the state, by creating employment opportunities, enhancing the quality of life, and augmenting the Gross State Domestic Product (GSDP) of Uttar Pradesh.
The policy promotes e-governance through initiatives like the implementation of Mission Mode Projects (MMPs), the rollout of an ISO-certified state data center, the adoption of e-office across state departments, and the promotion of m-governance and Wi-Fi services.
Entrepreneurs can find more information and submit applications through the "Online Submission of Application Form" page, or by contacting the Policy Implementation Unit and KPMG (the consultant) at the Uttar Pradesh Electronics Corporation (UPLC) office in Lucknow.