Sizing up India's listed data centre plays: What to expect from Budget 2024?
₹50,000 crore till then. That said, the upcoming budget is likely to include substantial measures to bolster the country's data centre ecosystem, underscoring the government's commitment to advancing digital infrastructure here.
Potential announcements may involve tax incentives, infrastructure development, renewable energy subsidies, streamlined policies and investment in technology and skills, said Varun Vijayan, director and head of tech, digital, and new-age business, at Anand Rathi Investment Banking. He believes that there could also be increased encouragement for public-private partnerships, to boost data centre investments.
These support measures, while aiming to strengthen India's digital infrastructure and meet the rising demand for data services, would also strengthen the country's data localization laws, and government initiatives like Digital India. Additionally, the data centre industry also faces a lengthy and cumbersome approval process that involves multiple authorities.
This leads to project delays and increased costs for the data centre service providers and customers alike. Hence, the government's focus on enabling ease of doing business in the sector through faster pre-clearances could shorten the construction timelines for setting up new data centres and lead to significant cost savings for firms, some market participants said.
The cost of setting up and operating a data centre depends on various factors, such as server size and power usage costs. According to a report by Batlivala & Karani Securities India, dated 26 April, servers are replaced 3-5 times over the lifespan of a data center, and when costs are spread out (amortized) over the life of the data center, server costs remain a significant
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