DeitY’s initiatives to help SMEs invest in ESDM sector

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Recently, DeitY approved two new schemes that are aimed at encouraging Indian SMEs

deity_esdm_sectorBy EB Bureau

Saturday, April 05, 2014: With an aim to help small and medium enterprises (SMEs) to invest in the electronic system design and manufacturing (ESDM) sector, currently dominated by global giants like Samsung, Nokia, Bosch, GE, Sony, Panasonic, etc, the Department of Electronics and IT (DeitY), Government of India, is coming up with different initiatives.

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The contributions of the SMEs get ignored. The SMEs are nimble-footed, lean and flexible. They are quicker in technology assimilation and in technological advancements due to their entrepreneurial nature. Not surprisingly, despite the presence of big companies in the ESDM sector, SMEs are the backbone of the electronics industries in countries like Taiwan, Japan, South Korea and China. Even in Germany, the growth of the medical electronics and industrial electronics industries is powered by SMEs. Israel has pioneered the start-up culture. In India, it is no different. We need to actively support SMEs as part of our agenda to promote ESDM. Given that most of the Indian ESDM units fall under the SME category, this is not a matter of choice,” stated Dr Ajay Kumar, joint secretary, DeitY.

Two new government schemes

Recently, DeitY approved two new schemes that are aimed at encouraging Indian SMEs. One of the schemes provides for financial assistance to SMEs for meeting stipulated standards. Under this scheme, assistance is provided for getting products tested to conform to standards prescribed by the government under its Compulsory Registration Order. Assistance is also given for meeting the stipulated standards required to export to other countries/regions.

The other scheme involves national recognition for exemplary work in the ESDM sector, by the industry. The government has institutionalised national awards that will recognise units that achieve exemplary performance in terms of growth, innovation, exports, etc. Attractive cash prizes will also be given along with the national citation.

EMC and MSIPS support for SMEs

It is with this objective that DeitY will now provide support under its Modified SIPS initiative to units investing as little as Rs 10 million. The Electronics Manufacturing Clusters (EMC) scheme has been created to support common facilities that individual SMEs may find difficult to set up. Two specific infrastructure facilities are also coming up for SMEs—the Bhiwadi greenfield EMC and the common facility centre, being set up in the Electronics City, Bengaluru, by ELCINA.

Different funds for SMEs

To promote start-ups, the National Policy on Electronics (NPE) envisages setting up incubators. One such incubator will be set up, on the recommendation of the working group on ESDM, by STPI (Software Technology Parks of India) in Delhi. The Venture Capital Fund also provides the necessary risk capital for start-ups. The Electronics Development Fund (EDF), envisaged in the NPE, is meant for that purpose. While EDF approval remains in the pipeline, it is heartening to see other venture funds being set up. The KITVEN Fund in Karnataka is one such example. SIDBI is also proposing another national fund. The Walden India Fund has also been proposed.

Vendor development plan

The Electronics India B2B platform created by DeitY on its website www.deity.gov.in/esdm is also meant to facilitate the collaboration needs of the SMEs. The platform hosts requests for joint ventures, technology collaborations, etc.

DeitY is also encouraging PSUs like ECIL, BHEL, HAL, BEL, etc, to undertake vendor development programmes. The vendors of these PSUs can benefit from the various policy initiatives taken by the government for the ESDM sector. 

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