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Government of Telangana releases draft Blockchain Policy

Policy Update
24.05.2019

Background

In a move aimed at becoming a leader in emerging technologies, the government of Telangana has released a draft Blockchain Policy outlining the framework of the blockchain ecosystem, which will be set up in its capital city. The draft document proposes to position Hyderabad as one of the top 10 Blockchain cities of the world.

“Taking a giant leap in this direction, the Government of Telangana has conceptualized India’s first ‘Blockchain District’ which will be a physical area within Hyderabad and will aim to create the world’s best blockchain technology ecosystem,” said the draft policy released on 17 May by the IT, Electronics & Communications Department of the Telangana government.

According to the draft framework, the Blockchain District will house all major blockchain technology companies; will have a huge incubator and a world-class facility for promoting research, innovation and industry collaboration. This one of its kind initiative will aim to put all blockchain companies based out of Hyderabad at a strategically advantageous position globally.

 Key highlights of the draft policy

  1. State government will develop talent pool in Telangana by-
  • Collaborating with industry to establish a training and certification agency in the state aimed at re-skilling and up-skilling the existing workforce for future demand.
  • Encouraging industry partners to offer internships to students who may secure a pre-placement offer at the end of the internship.
  • Encouraging technology institutions in Telangana to add blockchain in their curriculum.
  • Collaborating with blockchain ecosystem players to facilitate educational workshops and conferences that will allow practitioners and experts to provide specific insight, illustrate practical application, and foster innovation through hackathons, national challenges, boot camps, and accelerators.
  • Encouraging its employees or professionals to undergo workshops launched in blockchain technology to facilitate better adoption within government.
  1. State will work towards creation of shared infrastructure facilities, to be utilized by start-ups, industry, communities and academia either, at nominal cost or free of cost. This includes-
  • Providing office space to house all the blockchain start-ups, co-working and incubation spaces at highly subsidized prices.
  • Fostering innovation in blockchain technology, a sandbox for prominent blockchain protocols will be created that will allow simulation and prototyping of solutions.
  • An international liaison office of the blockchain district will be created to collaborate with international players to bring in investments and for exchange of knowledge and practices.
  • IT infrastructure facility for provision of cloud hosted computing and storage through T-Cloud will be extended at subsidized rates thus allowing for a future vision of blockchain as a service provided by the blockchain district.
  1. Promoting research and innovation
  • Blockchain District to provide a platform for academic institutions and industry to come together and provide students hands-on industry experience through internships on the real-life implementation and problem solving around the technology.
  • State will collaborate with corporates to start the research fellowship that would sponsor researchers in blockchain technology to undertake research in Telangana.
  • The international liaison office of the Blockchain District will collaborate with international start-ups/companies and encourage such companies to open their offices in the state.
  • Research, innovation and prototype development shall be promoted in innovative solutions in blockchain design and developing of cryptographic algorithms and security protocols.
  • Government will facilitate partnership of select industry players with Blockchain District to set-up incubators or accelerators to promote innovation in the blockchain technology.
  • Government will fund research programs in blockchain technology by setting up a research chairs in select premier institutes and fund research scholars working in the domain.
  • Government, in partnership with the industry and academia will organize an annual academic conference for all blockchain researchers in the state to display their work.
  1. State government will enable collaboration and focus on community building. The initiatives include-
  • Running programs in collaboration with industry associations to create awareness about difference in blockchain and cryptocurrencies.
  • Providing blockchain communities with necessary infrastructure and sponsorship for meetups/gatherings/events.
  • Partnering with blockchain start-ups/companies to create compelling success stories on all the relevant public/private projects within the state and showcase them in global blockchain conferences/events.
  • Organizing an annual event every year with the aim of making it the most sought after blockchain gathering in the world, thus establishing Telangana as the blockchain capital.
  • Launching a virtual community for all the relevant stakeholders in the blockchain ecosystem viz. industry, governments, start-ups, investors, developers, and academia. It will act as a common platform for everyone to interact, discuss ideas, seek inputs and collaborate on various initiatives.
  • Actively pursuing membership with industry organizations and blockchain consortiums at national and international levels.
  • Utilising the industry relationships to conduct seminars, workshops and lectures by renowned industry leaders and technologists in this area to mentor start-ups and talent pool.
  1. In addition to the incentives mentioned in the IT/ITeS and Innovation Policy, the State government will provide the following incentives to companies developing blockchain products and delivering blockchain services. These include-
  • Incentives to Enterprises

– 25% subsidy on lease rentals up to INR 5,00,000 per annum for the first 3 years of operations.

-50% subsidy on the exhibition rentals for the SMEs (firms operating out of Telangana) participating in national or international exhibitions limited to 9 Sq. mts of space.

– A tailor-made incentive package will be provided for mega blockchain projects or marquee blockchain companies.

-Land will be allotted at subsidized rates to blockchain companies by Telangana State Industrial Infrastructure Corporation Limited, the guidelines specified for regular ICT companies in terms of annual revenue, investment promises, employment creation promises will be partially relaxed for blockchain firms.

– For all the research projects sponsored by companies in technical universities, an equal amount of investment will be made by the govt. for up to INR 5 lakh per year for next 3 years.

  • Incentives to Start-ups

-100% reimbursement of State Goods and Services Tax (SGST) for a period of 3 years to start-ups with revenues less than INR 5 crore.

– 75% reimbursement for travel and ticket costs for selected blockchain conferences across the globe subject to a maximum of INR 2 lakh per year per start-up in the first 2 years of operation for selected start-ups.

– R&D grant up to 10% of the R&D expenses or up to 2% of the annual turnover whichever is lesser to the start-ups innovating in blockchain technology in Telangana.

-One-time start-up grant of INR 10 lakh will be provided to a maximum of 10 blockchain start-ups per year for the next 3 years.

  • Incentives to other entities

– Any organization conducting a blockchain related conference/event can approach the Government to seek sponsorship support. The Government will offer a sponsorship of INR 1-25 lakh based on the scale, quality, and uniqueness of the event.

– All blockchain related communities in Hyderabad will be provided venues for meetups, gatherings, and small-scale events at no or subsidized cost.


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