Info-tech

Interest subvention, credit guarantee fund part of New Electronics Policy

Our Bureau New Delhi | Updated on February 19, 2019 Published on February 19, 2019

Finance Minister Arun Jaitley addresses the media after a cabinet meeting, in New Delhi, on Tuesday, Feb 19, 2019. Also seen are Union Ministers Ravi Shankar Prasad and Rajyavardhan Singh Rathore

Govt eyes $400-b turnover by 2025 for local electronics manufacturing

The Cabinet on Tuesday approved the National Electronics Policy (NEP) 2019, which provides incentives to promote domestic manufacturing of electronics with a target turnover of $400 billion by 2025.

NEP 2019 comes with a slew of new incentive schemes including an ‘interest-subvention scheme’, under which the government intends to provide interest subsidy of 4 per cent on loans up to ₹1,000 crore on plant and machinery. For larger loan amounts, the subsidy will be limited to ₹1,000 crore. The Department of Expenditure is being consulted on this issue following completion of stakeholders’ consultation.

Under a new ‘Credit Guarantee Fund Scheme’, the government will create a fund to provide default guarantee to banks up to 75 per cent of the loan amount on plant and machinery for loans up to ₹100 crore. This will eliminate the need for small and new investors to provide third-party collateral, which is required by banks at present.

Further, Electronics Manufacturing Clusters 2.0 will replace the existing EMC scheme. A Sovereign Patent Fund will be launched to acquire IPs for chips and to ship components for some commonly used product IPs, so that they can be made available to Indian entrepreneurs at a very low cost.

“The previous Electronics Policy came in 2012, when there was little electronics manufacturing in the country. The schemes associated with it have now come to a close so we are completely revising it as a policy,” Ravi Shankar Prasad, Minister of Electronics and IT, said here after the Cabinet meeting.

Industry cluster

As part of the new policy, the government is making clusters in which no individual company will manufacture, but a full value chain will be in place. A bigger industry will be supported by smaller industries.

“Latest technologies such as artificial intelligence, medical/defence electronics and consumer electronics will be a focus as part of this policy,” Prasad said, adding that the government is aiming at India achieving a share of 32 per cent of global electronics manufacturing, from 26.7 per cent in 2017-18.

NPE 2019 will also give special thrust on fabless chip design, automotive electronics and power electronics for the mobility and strategic electronics industry.

 

Published on February 19, 2019
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