The policy’s tailor-made incentives provision intended for genuinely exceptional projects has been applied in an arbitrary and undocumented manner, creating a mechanism for selective benefit to private interests at the cost of the public exchequer.
The Andhra Pradesh IT & GCC Policy 4.0 came into effect on 12 December 2024, with the stated objective of strengthening infrastructure gaps in the physical, financial, and digital spaces and to incentivise large-scale employment creation in Andhra Pradesh.
However, a closer examination of the policy provisions and their implementation suggests significant inconsistencies. The manner in which incentives and land allocations have been granted raises concerns that the policy may be applied arbitrarily and potentially structured to provide undue benefits to select entities, rather than ensuring equitable and transparent economic development.
The policy allows tailor-made incentives for firms that exceed specified thresholds in investment, employment, or infrastructure creation. Using this provision, several allocations have been made to different entities. However, the lack of uniformity in the terms of allotment and the absence of clear justification for varying land prices and concessions raise serious concerns regarding transparency and due diligence.
Key Policy Provisions :
Infrastructure Developer Incentives (Clause 6.1)
Firms creating more than 1 million sq. ft. of office space are eligible for tailor-made incentives. This clause has been used to justify mixed-use relaxations and capital subsidies for infrastructure developers such as Sattva and Raheja.
Mixed-Use Provision
The standard policy permits 33% of constructed space to be used for purposes other than IT/GCC leasing (i.e., residential or commercial mixed use). Relaxations beyond this threshold require specific justification and should be contingent on demonstrable public benefit.
Capital Subsidy
A 50% capital subsidy, subject to a maximum of Rs. 2,000 per sq. ft., is available to qualifying infrastructure developers. This subsidy is funded by the state exchequer and represents a direct fiscal commitment by the Government of Andhra Pradesh.
IT/GCC Firm Incentives
IT and GCC firms occupying eligible premises are entitled to additional incentives including:
- 6 months CTC reimbursement, disbursed after 18 months of employment,
- Rs. 2,000 per seat for 24 months,
- Power incentives and other operational subsidies.
Summary of Allotments :
The following table sets out all twelve allotments made under the AP IT & GCC Policy 4.0 framework. Highlighted rows indicate allotments with relaxed mixed-use permissions or absent employment contingency clauses. An examination of twelve land allotments made between April and November 2025 reveals a pattern of governance irregularities that place disproportionate risk on the State while benefiting private developers.
- Land allotment rates range from Rs. 0.99/acre to Rs. 4.05 Crore/acre, 40,000× disparity with no documented rationale.
- Nine of twelve allotments (75%) carry no employment contingency clause. The State has no automatic recourse if promised jobs are not created.
- Sattva Developers and BVM (Kapil Group) received relaxed mixed-use permissions above the 33% policy standard, enabling residential monetisation without IT/GCC accountability.
- The Government funds 50% of Sattva’s IT construction costs via capital subsidy but holds zero equity, capturing no commercial upside.
- Raheja was granted IT & GCC 4.0 benefits under a separate LIFT Policy, with mixed use relaxed to 45%, and no minimum construction commitment specified in the Government Order.
| Company | Date | Investment (Cr.) | Jobs Promised | Land (acres) | Rate (Rs./acre) | Mixed Use | Contingent |
|---|---|---|---|---|---|---|---|
| Cognizant | 01 Jul 2025 | Rs. 1,582.98 | 8,000 | 22.19 | Rs. 0.99 | As per policy (33%) | YES |
| TCS | 21 Apr 2025 | Rs. 1,370.00 | 12,000 | 21.16 | Rs. 0.99 | As per policy (33%) | NO |
| ANSR Global | 01 Aug 2025 | Rs. 1,000.00 | 10,000 | 10.29 | Rs. 0.99 | As per policy (33%) | NO |
| Sattva | 01 Aug 2025 | Rs. 1,500.00 | 25,000 | 10.00 | Rs. 1.5 Cr. | 50% (RELAXED) | NO |
| BVM (Kapil) | 01 Aug 2025 | Rs. 1,250.00 | 15,000 | 10.00 | Rs. 1.5 Cr. | 40% (RELAXED) | NO |
| Visaha Reality | 11 Nov 2025 | Rs. 2,200.00 | 30,000 | Reclassification sought | As per policy | As per policy (33%) | NO |
| Phenom People | 01 Aug 2025 | Rs. 207.50 | 2,500 | 4.45 | Rs. 4.05 Cr. | As per policy (33%) | YES |
| Imagginnovate | 13 Oct 2025 | Rs. 140.00 | 2,600 | 4.05 | Rs. 2 Cr. | As per policy (33%) | NO |
| Quarks | 11 Nov 2025 | Rs. 115.00 | 2,000 | 4.00 | Rs. 1 Cr. | As per policy (33%) | NO |
| iSpace Software | 12 Nov 2025 | Rs. 119.18 | 2,000 | 2.00 | Rs. 4 Cr. | As per policy (33%) | NO |
| Fluentgrid | 12 Nov 2025 | Rs. 150.00 | 2,000 | 3.30 | Rs. 2 Cr. | As per policy (33%) | NO |
| Motherson | 12 Nov 2025 | Rs. 109.73 | 700 | 3.55 | Rs. 0.99 | As per policy (33%) | YES |
Note: Cells highlighted in amber indicate relaxed mixed-use permissions. Rate figures in gold indicate near-zero land rates. Red text in the Contingent column indicates absence of employment safeguards.
Analysis of the allotments:
Non-Uniform Land Rates
Cognizant, TCS, ANSR Global, and Motherson received land at Rs. 0.99/acre effectively free while Phenom People paid Rs. 4.05 Crore/acre and iSpace Rs. 4 Crore/acre. Sattva and BVM, despite receiving the most favourable mixed-use relaxations, were charged only Rs. 1.5 Crore/acre. No Government Order explains these differentials. Without a transparent pricing formula, these rates are arbitrary, legally vulnerable, and create an uneven playing field.
Absent Employment Contingencies
Only Cognizant, Phenom People, and Motherson have their allotments tied to employment outcomes. The remaining nine allottees holding land worth hundreds of crores face zero legal or financial consequence if they generate no jobs. The Government has relinquished public land with no enforceable mechanism to recover it. The addition of standard reversion clauses would cost nothing and protect the State’s interests materially.
Sattva – A Study in Asymmetric Risk
Sattva is required to construct 10 million sq. ft. in total (1 million sq. ft. IT + 9 million sq. ft. mixed, over five years). The policy permits 50% mixed use, meaning 5 million sq. ft. can be residential — recoverable through sales at full margin. For the 5 million sq. ft. IT component, the State provides a 50% capital subsidy (up to Rs. 2,000/sq. ft.). The State thus co-funds the IT asset, receives no equity stake, and is not entitled to any share of lease revenues. If the IT space is unleased, Sattva bears no penalty. No employment contingency applies. The developer bears no downside; the State bears all of it.
BVM and Raheja
BVM (Kapil Group) was allotted 10 acres at Rs. 1.5 Crore/acre with mixed use relaxed to 40% and no employment contingency — enabling residential monetisation with no IT/GCC obligation. Raheja, allotted under the separate LIFT Policy, was additionally granted all IT & GCC 4.0 benefits including a 45% mixed-use relaxation. Critically, the Raheja Government Order does not specify the minimum construction area required to qualify for the tailor-made incentives provision under Clause 6.1 — yet the benefits were granted regardless. The legal entitlement is therefore unascertainable.
Conclusion :
The AP IT & GCC Policy 4.0 was designed to mobilise private investment in IT infrastructure while generating durable employment for Andhra Pradesh. The twelve allotments examined in this analysis fall materially short of that objective. Near-zero land rates without justification, the near-universal absence of employment safeguards, structurally one-sided subsidy arrangements, and undocumented mixed-use relaxations collectively indicate a pattern of preferential treatment that is not explained by the policy’s stated goals.
The State Government has limited fiscal resources and scarce land. Their deployment must be governed by transparency, accountability, and verifiable public benefit. Immediate corrective action audit, contingency clause amendment, pricing reform, and equity participation is essential to protect the public interest.
