MeitY to launch data centre policy soon, may suggest single-window clearance

The Ministry of Electronics and Information Technology (MeitY) is likely to come out with a national policy framework for establishing data centres across the country, which the states will be free to either follow in total or mould slightly to suit their needs, senior government officials said.

Among the major policy introductions in the new data centre policy framework, the MeitY is likely to push for usage of renewable energy such as solar energy for day-to-day operations of the building which will house the data disks, an official said. “Data centres consume a lot of power and there is little to no cross-subsidy available to them. So apart from the data consumed by data trays or data racks, we want to push for renewable energy consumption for other needs of the building in which the data centre is housed,” a senior official said.

State governments may also be pushed to start giving cross-subsidy to data centres, which currently get electricity at either very high rates or have to pay cross-subsidy surcharge on power which they buy at low rates but from a state different from where the data centre is located, the official said.

“Once the power cost is managed, more players can be attracted into the system and the overall cost of running or managing a data centre comes down dramatically,” the official said.

Apart from this, the MeitY is also likely to suggest that data centres be considered a part of urban or semi-urban infrastructure so that real estate players can consider investments in the sector, another official said.

“So currently there are about 40 clearances needed to establish a data centre, which is extremely time consuming. We are talking to all stakeholders and discussing if there could be a single-window clearance for applicants,” the official said.

To bring the costs further down, the government may also give some relief in the form of lower levies to electronic components used for data centres or keep suitable guidelines to favour domestic ancillary industries, officials said.

In 2016, the MeitY had come out with guidelines for technical and financial support for establishment of state data centres in which it had suggested that since the process was a complex one which required substantial investment as well as efficient management, only existing internet data centre players should be allowed.

The guidelines had also suggested that the central government would support the entire cost of establishment, operation and maintenance of the state data centre for a period of five years on 100 per cent grant-in aid basis.

Earlier this year in May, software policy group Nasscom had suggested that data centres should have connections from dual power grids so that at least one power source is functional in case of a breakdown.