NPE 2019: High On Hopes But Lacks Strategic Clarity

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The industry congratulated the Ministry of Electronics and Information Technology (MeitY) and welcomed the announcement of the new electronic policy (NPE 2019) approved by the Cabinet at the end of this month.

While NPE 2012 contained a wide range of promotional schemes for investment promotion, infrastructure creation, skill development, promoting R&D and more, it was constrained by procedural complications. The policy experienced a lack of tenacity in the implementation of its key schemes and sporadic flow of funds to the applicants with limited success.

The new electronics policy advances NPE 2012 initiatives to promote domestic manufacturing and export of the entire value chain of the ESDM industry. But how exactly is NPE 2019 different from 2012?

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NPE 2012 vs 2019 – At a glance

Major focus area

What NPE 2012 had promised

What NPE 2019 aims to deliver

Electronics design ecosystem

Aimed to achieve $400 billion in revenue in the domestic electronics manufacturing industry by investing $100 billion in electronic system design and manufacturing by 2020.

Same target with revised deadline. Aims to achieve the old target now by 2025.

Mobile manufacturing

Aimed to build 500 million mobile phones locally by 2019, with value estimated to be around USD 46 billion.

Aims to build 1 billion mobile phones locally by 2025, worth Rs 13 trillion, including 600 million devices worth Rs 7 trillion.

M-SIPS

Provided 25 per cent capital subsidy for the electronics industry in non-special economic zones and 20 per cent for those in the SEZ.

Plans to replace the M-SIPS program with programs such as interest subvention upto 4 per cent and credit default guarantee upto 75 per cent.

EMC

Aimed to promote around 200 clusters across the country.

No new target has been declared. Govt intends to provide support for infrastructure development through the formulation of a new scheme or suitable modifications in the existing EMC scheme.

EDF / startup

Planned to set up incubators and Centers of Excellence (CoE).

No further declaration in terms of incubators and CoE has been made. Plans to provides requisite support in form of electronic design automation (EDA) tools and fab support for early-stage startups.

Exports

Aimed to increase exports from the-then $5.5 billion to $60 billion by 2020.

No new export target set. Aims to increase the rate of duty drawback for the electronics sector, reimbursement of State levies (ROSL) and other levies for which input tax credit is not available.

  • Notification of date of implementation has not yet been announced by the government

This table has been structured utilising insights provided by Rajesh Ram Mishra, president, IESA

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