Govt needs to sort out more issues in electronics manufacturing, says industry

S. Ronendra Singh New Delhi | Updated on April 23, 2013

While Communications and Information Technology Minister Kapil Sibal is hard selling electronics manufacturing in India through various schemes and incentives, the industry is not confident of meeting targets.

The Government is aiming to achieve a turnover of around $400 billion by 2020 involving investment of about $100 billion and employment to around 28 million by 2020.

Even though the policies are in place and are being implemented, a senior official from Department of Electronics and IT (DeitY) admitted that there is still no clarity on when manufacturing clusters will start becoming a reality.

“We are working hard on it, but when these policies really get into action is yet not clear. The Central Government has to do it at the earliest to start the action,” a DeitY official, who did not wish to be named, told Business Line.

The question also lies on how the Government implements all these projects without any hassles as various State Governments have to be involved and land acquisition for these clusters may also become an issue.

Clusters identified

The DeitY official said clusters are being identified for both greenfield and brownfield facilities in such areas such as the Delhi-Mumbai corridor, Noida, Greater Noida, Bangalore, Gujarat and Rajasthan.

However, there are many other questions yet to be answered for the success of these projects.

“For example, the GST is not implemented yet. Why should a truck stop for three days for Octroi tax for getting manufactured products to a market in other city?,” P.V.G. Menon, President, India Electronics and Semiconductor Association, asked.

On one hand, the Government is talking about electronic manufacturing clusters, but on the other if goods and services movements are getting effected because of this kind of issues, whatever good intention that the Government has, will be nullified, he said.

“The policy is in place now, but how the Central Government implements it and how they tackle with different State Governments, those are the issues need to be sorted out. So the focus now should be on implementation and not on the policies,” he said.

It requires at least three years for a semiconductor fabrication company to start manufacturing chips and if the construction of these facilities does not start now, the 2020 targets will not be achieved.

“The Government has to involve agencies like McKinseys of the world so that it could take help from these companies to promote the industry,” Ajai Chowdhry, former HCL Infosystems’ Chairman, said.

Published on April 23, 2013

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor