MP IT/ITES/ESDM Investment Promotion Policy 2023: A Detailed Overview of Incentives Available Across Madhya Pradesh
Introduction
The Government of Madhya Pradesh has notified the MP IT/ITES/ESDM Investment Promotion Policy, 2023, with the objective of accelerating investment in technology-led sectors and creating a robust ecosystem for IT, IT-enabled services, electronics manufacturing, and allied industries across the state.
The policy provides a structured framework of financial assistance, employment-linked incentives, and infrastructure support, applicable to eligible companies establishing operations anywhere within Madhya Pradesh, including those operating through co-working and plug-and-play office models. The incentives are subject to fulfillment of prescribed conditions, procedural compliance, and approval by the competent authorities.
This article presents a detailed and verified overview of the policy provisions relevant to IT and ITeS companies, with particular emphasis on rental assistance, employment generation incentives, and baseline eligibility conditions applicable across the state.
Overview of the MP IT/ITES/ESDM Investment Promotion Policy, 2023
The MP IT / ITES / ESDM Investment Promotion Policy, 2023 is a state government policy of Madhya Pradesh aimed at promoting investment in the following sectors:
- Information Technology (IT)
- Information Technology Enabled Services (ITeS)
- Electronics System Design & Manufacturing (ESDM)
- Data Centres
- Plug-and-play infrastructure, co-working spaces, and related IT infrastructure
The policy applies to eligible units commencing or expanding operations within Madhya Pradesh during the operative period of the policy, as may be amended from time to time.
Importantly, the policy formally recognizes co-working and plug-and-play infrastructure as eligible operational models, thereby aligning with modern workspace practices adopted by IT and ITeS companies.
Objectives of the Policy
The key objectives of the MP IT/ITES/ESDM Investment Promotion Policy, 2023 include:
- Attracting investments in IT, ITES, ESDM and allied sectors across Madhya Pradesh
- Generating employment, both direct and indirect, particularly for skilled youth
- Encouraging infrastructure development, including ready-to-use office spaces and IT parks
- Promoting balanced regional development, extending growth beyond established metropolitan centers
- Enhancing workforce skills by fostering demand for trained human resources within the state
These objectives underpin the design of the incentives offered under the policy.
District Classification and Applicability Across Madhya Pradesh
For the purpose of incentive computation, districts in Madhya Pradesh are classified into different categories (such as Category A, B, etc.). The quantum of certain incentives, particularly rental assistance, may vary based on district classification.
However, the policy framework itself is applicable across the entire state, and eligible companies operating in any district of Madhya Pradesh may avail incentives subject to location-based limits and fulfillment of conditions.
Key Incentives Available Under the Policy
1. Rental Assistance for Co-working / Plug-and-Play Spaces To support companies opting for flexible infrastructure models, the policy provides rental assistance for operations carried out from co-working or plug-and-play facilities.
Key features of rental assistance include:
- Assistance of up to ₹3,000 per seat per month, depending on the category of the district
- Assistance available for a maximum period of 3 years from the commencement of commercial operations
- Overall monetary cap of ₹10 crore per eligible unit
- Minimum operational capacity of 20 seats
- Minimum continuous occupancy requirement of 3 months
This incentive is intended to reduce the fixed rental burden during the initial operational years, particularly for growing IT and ITeS companies.
2. Employment Generation Assistance (EGA)
To encourage sustained job generation, the policy provides Employment Generation Assistance (EGA), calculated on a per-employee, per-month basis.
Indicative assistance structure:
- Up to 1,000 employees – ₹4,000 per employee per month
- 1,001 to 1,500 employees – ₹4,500 per employee per month
- 1,501 to 2,000 employees – ₹5,000 per employee per month
Additional parameters:
- Assistance available for a maximum period of 3 years from the date of commencement of operations
- Overall cap of ₹15 crore per eligible unit
- Minimum employment requirement of 20 employees
- Minimum space allocation norm of 60 sq. ft. per employee
Employment is generally considered eligible only when statutory compliances, including EPF registration and contributions, are duly met.
Additional Basic Eligibility and Compliance Conditions
In addition to the incentive-specific criteria, the policy prescribes certain baseline conditions that must be complied with for availing and continuing incentives:
- Operations must be commenced within Madhya Pradesh
- Minimum carpet area requirement of 3,000 sq. ft.
- Maintenance of minimum annual average employment as per policy guidelines
- Execution of a registered rent agreement or service agreement for the premises
- EPF compliance, typically with a minimum of six months’ contribution history
- Compliance with all applicable laws, rules, notifications, and policy amendments issued from time to time
Non-compliance with these conditions may result in rejection, reduction, suspension, or recovery of incentives.
Procedural Aspects and Implementation
While the policy lays down the incentive framework, actual realization of benefits requires:
- Registration of the unit under the applicable IT/ITES framework
- Submission of prescribed applications and supporting documents
- Periodic filings and claims within stipulated timelines
- Verification and approval by the concerned state departments
The disbursement of incentives is subject to scrutiny, verification of records, and approval by the competent authorities.
Importance of Professional Assistance
Given the technical and procedural nature of subsidy schemes, professional assistance often plays a crucial role in:
- Interpreting policy provisions correctly
- Preparing accurate documentation and declarations
- Coordinating with government departments
- Ensuring timely submission and follow-up of claims
Effective coordination between the company’s internal teams and professional advisors significantly improves the likelihood of successful incentive realization.
Conclusion
The MP IT/ITES/ESDM Investment Promotion Policy, 2023 offers a well-structured and employment-oriented incentive framework for IT and ITeS companies operating anywhere in Madhya Pradesh. By providing rental assistance for modern workspace models and employment-linked financial support, the policy seeks to reduce initial operational costs while encouraging sustainable growth and job creation.
Companies planning to establish or expand technology operations in Madhya Pradesh should conduct a detailed eligibility assessment, ensure strict statutory compliance, and adopt a systematic approach to documentation and claims in order to maximize the benefits available under the policy.
Summary
- The MP IT/ITES/ESDM Investment Promotion Policy 2023 is applicable across the entire State of Madhya Pradesh
- Covers IT, ITeS, ESDM, data centres, and co-working / plug-and-play models
- Key incentives include:
- Rental assistance (up to ₹3,000 per seat per month, subject to district category)
- Employment Generation Assistance for up to 3 years
- Incentives are subject to caps, employment thresholds, area norms, and statutory compliance
- Careful planning, documentation, and professional support are critical for successful implementation
This policy positions Madhya Pradesh as a competitive and forward-looking destination for technology-led investments while promoting inclusive and employment-driven growth.
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Author: CA. Apurv Kansal, Managing Partner, Apurv Kansal and Company, Chartered Accountants, Indore
(The author is a Practicing Chartered Accountant and a renowned Trainer with an exposure in Subsidies, Audits & Taxation. Author can be reached at mail@apurvkansal.co.in or reach out via message/call at +91 98272 05947)
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