Sops for electronics production in 8 cities

Our Bureau New Delhi | Updated on November 25, 2017

Communications and IT Minister Ravi Shankar Prasad

Continuation of a 2012 UPA scheme, will refund capex investments

In a bid to boost electronics manufacturing, Communications and Information Technology Minister Ravi Shankar Prasad on Tuesday said incentives would be given to companies that set up greenfield factories in eight cities.

The Government has identified Ghaziabad, Vadodara, Gandhinagar, Ahmedabad, Nagpur, Nashik, Aurangabad and Thane as the cities.

The scheme, called Modified Special Incentive Subsidy Scheme (M-SIPS), was launched by the UPA Government in 2012.

It provides refunds for investments in capital expenditure — 20 per cent in SEZs and 25 per cent in non-SEZs. It also provides for reimbursement of countervailing duty/excise for capital equipment in the non-SEZ units.

Central taxes and duties are also reimbursed for high technology and high capital investment units such as fabs.

The incentives are available for investments made in a project within 10 years from the date of approval.

Manufacturing clusters

Prasad also announced the setting up of greenfield electronic manufacturing clusters in Bhopal, Bhubaneshwar, Hyderabad, Maheshwaram, Bhiwadi, Jabalpur, Hosur and Kakkanad.

The Electronic Manufacturing Cluster Scheme, also notified in 2012, offers financial assistance through aid grants. For greenfield clusters, the assistance is 50 per cent of the project cost, subject to a ceiling of ₹50 crore for every 100 acres of land.

“These are important for semiconductor fabrication in the country as otherwise the import of electronics (more than $400 billion) would be more than our oil imports by 2020. Second, such hubs will also create 2.80 crore jobs by then,” Prasad said.

Two more clusters — one brownfield and one greenfield — will come up in Bangalore and Odisha.

Prasad said the Government has decided to set up an Electronic Development Fund, to part-finance projects, thereby attracting a good number of venture funds into electronics manufacturing.

The Manufacturers Association of Information Technology has hailed the Government’s announcement. “It’s a welcome decision by the Government as it will encourage local manufacturing,” said Amar Babu, President, MAIT.

Telecom issues

Turning to telecom matters, the minister said full mobile number portability has been approved in-principle and will be rolled out soon.

Prasad ratified decisions taken by the Telecom Commission related to the National Optical Fibre Network to connect 100,000 gram panchayats in 2014-15 and another 100,000 in 2016-17.

Published on June 17, 2014

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