Electronic manufacturing firms seeking benefits under the new Modified Special Incentives Package Scheme (MSIPS) will have to give commitment that they will continue their business in India for at least three years after availing subsidy.
The benefits under the scheme, which is expected to be finalised in 2-3 weeks, will also not be applicable in case there is relocation of manufacturing plant to some other parts of the country.
In the new MSIPS, the government is looking for firm commitments from companies interested in getting incentives. They will have to guarantee the government that they will stay in business in India for three years of availing benefits.
The proposed changes in the scheme, which was started in July 2012 to boost electronics manufacturing growth in the country, also include providing subsidy for investments in capital expenditure — 20 per cent for investments in SEZs and 25 per cent in non-SEZs.
It also provides for reimbursement of countervailing duty (CVD)/excise for capital equipment for the non-SEZ units.
For high technology and high capital investment units, like fabs, reimbursement of central taxes and duties under MSIPS is also provided.
Under the proposed changes, relocation of manufacturing unit from other parts of India will not be eligible for new benefits.
Ministry of Electronics and IT Secretary Aruna Sundararajan said the government is looking at various categories of products that need to be brought under MSIPS for incentives.
By Baishakhi Dutta