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Draft Data Centre Policy : Interaction with Govt of Maharashtra

Blog: NASSCOM Official Blog

The Department of Information Technology, Maharashtra had organised a meeting on 12 November 2020, to discuss the draft Data Centre Policy published by MeitY. Shri Satej Patil, the IT Minister of Maharashtra chaired the meeting along with Secretary, Dept of IT. NASSCOM participated in the interaction and shared its views on the proposals and subsequently, a written submission was made.

In the feedback, NASSCOM suggested the following

  1. Promote use of Natural Gas in Data Centres : Generation of solar or wind energy for powering Data Centres requires considerable amount of land. While this may not be a huge issue for the Data Centres located in rural areas, Data Centres in urban areas may not find it viable to use a huge parcel of land for generating solar or wind energy. Often, availability of land itself could be a constraint. Therefore, the policy should also promote, use of Natural Gas apart from renewable energy for powering Data Centres.
  1. Adoption of Renewable Energy : Currently, in many states, the existing rules related to open access and banking of power restrict companies from using renewable energy round the clock. Frequent changes in open access regulation, delay in connectivity & injection approvals from the Governing Authorities, insufficient transmission capacity are other key aspects that needs to be addressed to encourage Data Centre Operators to invest in Renewable Energy Power Plants or buy them from through open access. Therefore, there is a need to analyse the impact of these rules and enable a holistic framework that can address these challenges across the country. 
  1. Fiscal Incentives : The policy proposes fiscal and non-fiscal incentives for the promotion of Data Centre Parks and Data Centres. The is indeed a very welcome move and the industry will stand to benefit from these incentives and make their services globally competitive. However, its unclear what would be the applicability criteria. We believe that a level playing field should be provided for all Data Centre investments and hence the incentives be not restricted to investments made in the proposed Data Centre Economic Zones or tied to any other location-based criteria. 
  1. Regulatory clearance : The policy rightly intends to the address the issue of delay in regulatory clearances for establishing a Data Centre. We welcome these proposals and believe if implemented efficiently, these measures can reduce the time taken for regulatory clearance significantly and improve ease of doing business. However, we are of the view that the policy should go beyond these proposals and encourage deemed approval system, which can improve the certainty of regulatory clearance manifold and incentivise government agencies to act on applications within the specified timeline.
  1. Technical Standards : The policy intends to publish and mandate certain minimum standards for Data Centres. While we welcome the proposal to publish certain standards for adoption, we believe the Data Centers should have wider choice to choose from based on the customer requirements and therefore the govt should avoid mandating a few selected standards.
  1. Incentives for domestic production : The policy intends to promote local manufacturing of equipment used in Data Centres and proposes incentives for usage of domestic equipment. Though domestic production may be incentivized, policy may ensure there are no unnecessary barriers for import of specialized equipment which would be critical for growth & efficiency of Data Centres in India.




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