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Companies such as Samsung Electronics and Bosch India would be the first ones to benefit from the Government’s Modified Special Incentive Package Scheme (M-SIPS) policy.
According to a senior official at the Department of Electronics and Information technology (DeitY), the Government is working on a proposal for reimbursing these companies from this year itself.
“We will speak with the Finance Ministry soon and it (proposal) would go to the Cabinet for the approval,” the official told BusinessLine .
The Cabinet had approved the investment proposals worth ₹961 crore from Samsung, Bosch and Sahasra for the setting up of electronic systems design and manufacturing (ESDM) facilities in the country in July 2012.
The Government had decided to incentivise investments in ESDM under the policy.
The Scheme provides subsidy for investments in capital expenditure – 20 per cent for investments in special economic zones (SEZs) and 25 per cent in non-SEZs. It also provides reimbursements of countervailing duties (CVD)/excise for capital equipment for the non-SEZ units.
The Government till last year had received investment proposals close to ₹4,600 crore for manufacture of consumer electronics, telecom products, hand-held devices, automotive electronics, and semiconductors.
Till August 2014, the Government received 40 applications with investments of around ₹14,624 crore under the M-SIPS policy. Out of these, 16 projects with investments of around ₹2,230 crore have been approved, the DeitY official said.
The official said that as part of the Prime Minister’s ‘Digital India’ campaign, project implementation is quicker and therefore, the Government wants to process all the required procedures such as reimbursement of investments at a faster pace.
Manufacturing clustersWith the laying down of two foundation stones in Madhya Pradesh – greenfield Electronic Manufacturing Clusters at Purva, Jabalpur, and Badwai, Bhopal – such clusters are expected in other States too.
“Madhya Pradesh is the first State to start the clusters because of the quick decision of the Chief Minister and we expect other States’ ministers to also show interest soon,” the DeitY official added. The incentives are available for a period of 10 years from the date of approval of application. Manufacturers of electronic products such as smart cards, liquid crystal modules, fully automatic washing machines, refrigerators, air-conditioners and microwave, would benefit under the Scheme.
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