EMC 2.0: Rs 3,725 Crore Assistance For Modified Electronics Manufacturing Clusters

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  • This scheme would support setting up of both electronics manufacturing clusters (EMCs) and common facility centres (CFCs)
  • The focus is on upgrading common technical infrastructure and providing common facilities for the ESDM units

Aimed towards improving electronics manufacturing in the country, the Union Cabinet chaired by the Prime Minister, Narendra Modi has approved financial assistance to the Modified Electronics Manufacturing Clusters (EMC2.0) scheme. The scheme, as per the Government of India, is taken towards the development of world-class infrastructure along with common facilities and amenities through Electronics Manufacturing Clusters (EMCs).

“Measures announced such as a production-linked incentive scheme (PLI) for promoting manufacturing of electronic components and semiconductors SPECS) and Electronics Manufacturing Clusters (EMC) 2.0 are going to provide a much-needed fillip to the sector. We hope that the government’s assurance of providing a financial incentive of 25 per cent on capital expenditure for the identified list of electronic goods including electronic components and semiconductors, enable India to become the semiconductor manufacturing hub of the world,” noted Parag Naik, CEO & co-founder, Saankhya Labs.

India’s electronics production has increased from Rs 1,90,366 crore (US$29 billion) in 2014-15 to Rs 4,58,006 crore (US$ 70 billion) in 2018-19, at a compound annual growth rate (CAGR) of about 25 per cent. India’s share in global electronics manufacturing grew from 1.3 per cent (2012) to three per cent (2018). It accounts for 2.3 per cent of India’s GDP at present.

Setting up electronics manufacturing clusters (EMCs) and common facility centers (CFCs)

The modified Electronics Manufacturing Clusters (EMC 2.0) Scheme, as the government informed would support setting up of both EMCs and CFCs. “For the purpose of this Scheme, an Electronics Manufacturing Cluster (EMC) would set up in geographical areas of certain minimum extent, preferably contiguous, where the focus is on development of basic infrastructure, amenities and other common facilities for the ESDM units,” read GOI’s official statement.

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It continued, “For Common Facility Centre (CFC), there should be a significant number of existing ESDM units located in the area and the focus is on upgrading common technical infrastructure and providing common facilities for the ESDM units in such EMCs, Industrial Areas/Parks/industrial corridors,” GOI’s official statement.”

GOI expects that these EMCs will aid the growth of the ESDM sector, help the development of the entrepreneurial ecosystem, drive innovation and catalyze the economic growth of the region by attracting investments in the sector, increasing employment opportunities and tax revenues.

Upto 50 per cent of the project cost

The scheme, as per the government, will provide financial assistance of up to 50 per cent of the project cost subject to a ceiling of Rs 70 crore per 100 acres of land for setting up of Electronics Manufacturing Cluster projects. The total outlay of the propose EMC 2.0 Scheme is Rs 3,762.25 crore. It includes financial assistance of Rs 3,725 crore and administrative and management expense to the tune of Rs. 37.25 crore.

It is to be noted here that the Ministry of Electronics and Information Technology (MeitY) had notified about the Electronics Manufacturing Clusters (EMC) Scheme earlier and it was open for receipt of applications up to October 2017. Under EMC scheme, 20 Greenfield EMCs and three Common Facility Centres (CFCs) measuring an area of 3565 acres with project cost of Rs 3898 crore including Government Grant-in-aid of Rs 1577 crore have already been approved in 15 states across the country.

“There is a need for continuation of such scheme in modified form for further strengthening the infrastructure base for the electronics industry in the country and deepening the electronics value chain,” read GOI’s official statement.

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