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Uttar Pradesh Information Technology and Startup Policy 2016

Uttar Pradesh Information Technology and Startup Policy 2016

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 start-up hubs with more than 4750 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 in 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 laid out with the vision of leveraging Information Technology (IT) as a vehicle for the economic development of Uttar Pradesh with 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.
  • Leverage IT as an engine of growth for Uttar Pradesh.
  • Transform physical communities into connected communities so as to herald sustainable economic growth and enhance the quality of life.


As established in its vision, the scheme is aimed at promoting Uttar Pradesh as an attractive investment destination for IT or ITES companies by facilitating a congenial, industry-friendly and proactive climate. To achieve this, it seeks to:

  • Promote major cities or towns in the State as emerging Tier-II and Tier-III destinations and providing assistance in setting up the 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 make for an intelligent and smart investment region.
  • Create state-of-the-art ICT infrastructure through which the business and users will be provided with seamless connectivity.
  • Enhance the quality of the talent pool, as well as to create more employment opportunities.
  • Develop skilled IT workforce in the State for all factions of the society.
  • Leverage IT as a platform of socio-economic development of the State.
  • Augment the Gross State Domestic Product (GSDP) of Uttar Pradesh.

Area of Focus

The policy is formulated for the benefit of the IT/ITES industry encompassing Startups/Entrepreneurs, MSME (Micro, Small, and Medium Enterprises) and large IT/ITES industry by providing substantial incentives with conducive policy framework.


For the purpose of implementing this policy, a Policy Implementation Unit (PIU) has been established. The Uttar Pradesh Electronics Corporation (UPLC) has been designated as its nodal agency. KPMG will partner PIU in implementing and monitoring the policy.

PIU would support, monitor and provide feedback to the Empowered Committee on the Implementation of IT and Start-up Policy for a five-year period, while UPSC would render Administrative and Manpower support.

Enabling Environment

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

Uttar Pradesh Startup Fund

A Startup Fund worth Rs 1000 crores has been established to provide financial assistance to UP based startups so that its resident youth emerge as job creators.


Incubators have been developed at major educational institutes of the country so as to inculcate the start-up culture among young entrepreneurs and innovators. The State is warming up for the establishment of the biggest incubator in the country.

Single Window Clearance

Single window clearance mechanism has been instituted at Udyog Bandhu for facilitating the creation of a friendly business climate through ease of doing business reforms.

IT City

The City of Lucknow now houses a state-of-the-art IT City, which has been built over 100 acres of land at Lucknow. The project has been allocated with an investment of Rs. 1500 crores, and is aimed at employing 75,000 people. Out of the entire space, 60% of land has been earmarked for core activities, while the remaining 40% will cater to non-core activities.

IT Parks

The State of Uttar Pradesh currently boats of IT parks in Agra, Meerut, Gorakhpur, Kanpur, Lucknow, Varanasi, Bareilly, etc. The facility would be further expanded in the State.

Citizen Service Delivery

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

Implementation of MMPs

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


The State Government intends to improve the communication and connectivity across the State by leveraging BharatNet in addition to National General Knowledge Network (NKN) framework. The facility of UPSWAN would be extended to Gram Panchayats through this facility.

Green Data Centre

An ISO 27001 certified UPSDC (state data centre) has been rolled out as a central data repository. All State departments are linked with the same for round-the-clock public domain information usage. The State Government is planning a centralized green data centre (SDC 2.0), which would be cloud-ready and based on “Pay as per Use” model.”


E-office is implemented across the state departments with the object of improving the operational efficiency, reducing the turnaround time, and enhancing the transparency and accountability of the State Departments.

India BPO Promotion Scheme

BPOs in UP will be rendered additional capital support and incentives under the India BPO Promotion Scheme.


M-Governance facilities would be promoted across all government services through building mobile based applications and citizen services. The State Departments have already come up with various mobile based applications, the likes of which include m-Sehat, m-Swasthya, UPOne, and UP-BUS.


The State Government would ensure the availability of Wi-Fi services on specified Public Places, Tourist Destinations, Business Hubs, etc., which will be carried out in a phased manner.

Incentives for Startups

Startups would be receiving incentives in the form of:

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

Sustenance Allowance

Startups, whose projects have been recommended by the Nodal agency and approved by the committee would be provided with a sustenance allowance of Rs. 15,000 per month for a span of one year. Marketing Allowance

A marketing/publicity allowance of up to Rs. 10 lakhs would be provided for introducing innovative products into the market. To qualify for such allowance, startups should have received funds of 25% of equity from a known and registered angel/venture funds or reputed incubators. Assistance for this purpose would be provided to startups in three phases.

Matching Grant

Under the provision of matching grants, the State Governments would match 25% of the money invested by the VC, provided that its project is recommended and approved by the Institution’s Screening Committee.

Incubation Incentives

A registered incubator may support the startups by providing:

  • 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 would be rendered incentives in the form of:

  • Infrastructure Assistance
  • Operational Allowance
  • Mentoring Assistance

Infrastructure Assistance

Host institutes would be rendered a capital grant of not more than 50% for setting up the IT infrastructure (subject to a maximum of INR 25 lakhs). Universities, educational institutions, PSUs, R&D Institutions, private and other establishments may choose to support and mentor the innovators (subject to the approval of the Committee).

Operational Allowance

Selected Incubators would be provided with an operational allowance of up to five lakhs per annum for a period of five years.

Mentoring Assistance

Selected Incubators are required to appoint at least two mentors to be paid on an honorary basis of up to INR 2 lakhs per annum.

Applications can be submitted through the page “Online Submission of Application Form,” be it 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