Need incentive scheme for data centres, separate economic zones: TRAI

Swift rollout of the proposed Data Centre Incentivization scheme, creation of data centre-specific economic zones, and a new data centre readiness index for states have been recommended by the Telecom Regulatory Authority of India (TRAI) to boost the digital infrastructure ecosystem in the country.

The recommendations are part of an exercise initiated by the Centre to create a regulatory framework for the setting up of more Data Centres (DCs), Content Delivery Networks (CDNs), and Interconnect Exchanges (IXPs) in India.

TRAI said a new Data Centre Incentivization Scheme (DCIS) aimed at establishing DCs and DC Parks should be quickly formulated, in the recommendations released over the weekend. It said the Centre can create guidelines on the issue, leaving enough flexibility for the states to announce fiscal incentives through their policies.

Last year, media reports had suggested the Ministry of Electronics and Information Technology (MeitY) was formulating a scheme to incentivise investments into new hyperscale data centres in India, and planning to offer incentives worth up to Rs 15,000 crore for the same. However, no such scheme has been announced so far even as the government expects investments worth Rs 3 trillion in the sector.

The new scheme should offer both fiscal and non-fiscal incentives in the form of land, capital subsidy and Interest subsidy, TRAI said. It also pointed out the Centre should continue to shoulder the majority of the subsidies at this stage. “In such a scheme, while the land may be offered by respective states, the expenses on other offered incentives including capital and interest should have at least 75 percent contribution from central government,” TRAI said.

TRAI has also pushed for the handholding of states that have scanty DC footprints and prepare guidelines listing out incentives for Data Centre Parks in line with other advanced states.

New ideas

It has also flagged the need for establishing DC Economic Zones (DCEZs) and identified one existing SEZ each in Andhra Pradesh, Kerala, Karnataka, Maharashtra, Haryana, UP, MP, Gujarat, Rajasthan, and Odisha, which are located in areas with abandon power and water, TRAI has said these can either be converted into DCEZs or zones for DC parks carved out.

The regulator has recommended a national level DC Readiness Index (DCRI) framework implemented by the Centre to rank Indian states according to their suitability in promoting the sector. It has also suggested an indicative list of parameters and their weightages for ranking the states.

Data centres are physical facilities used by organizations to house their critical applications and data that enable delivery of shared applications and data. Official discourse on the subject had till now been restricted to the physical location of such centres with the government earlier announcing data localization and several effective policy measures preventing data flows beyond borders.

However, modern data centers are increasingly evolving into virtual networks that support applications and workloads across pools of physical infrastructure and into a multi cloud environment.

The TRAI recommendations have focussed on physical data centres as of now, an official said. It has suggested the Indian Green Building Council (IGBC) along with Telecommunication Engineering Centre (TEC) should be entrusted with the task of framing certification standards of green DCs in India.

Data body

TRAI has suggested the formation of the Data Digitization and Monetization Council (DDMC), an apex body to oversee all issues related to data digitization, data sharing, and data monetization in the country. The Authority further recommends that DDMC should also be entrusted with the responsibility of putting in place an overarching framework for the ethical use of data both by the Government as well as by the corporates in India.

It has also recommended the government should put in place a data sharing and consent management framework to provide telecom subscribers a consent based option to share their KYC data with recipient telecom service providers when they port their numbers.

Importantly, TRAI said the DDMC should also be entrusted with the responsibility of putting in place an overarching framework for ethical use of data both by the Government as well as the corporate sector in India. “The framework should address the generic as well as vertical sector specific requirements,” it said.