The Ministry of Electronics and IT has reworked one of its flagship incentive schemes for electronics manufacturing and is taking the draft to the Cabinet for a fresh approval.
Approvals under M-SIPS (Modified Special Incentive Package Scheme) have been pending for over six months after the finance ministry expressed certain reservations.
The scheme is key to the Make in India programme and provides a host of incentives including a 2025 per cent subsidy on capital expenditure for companies that set up manufacturing units of electronics equipment or components locally.
A Cabinet note has been circulated for discussion and is likely to be tabled in the coming weeks. The finance ministry had raised concerns over the lack of clarity in the quantum of subsidy outgo under the open-ended M-SIPS framework, which is valid till 2020. The hiatus has upset an industry that had begun looking at India as a manufacturing hub.
So far, proposals worth Rs 18,000 crore have been approved under the programme with an estimated subsidy of around Rs 4,000 crore to be paid over the next 10 years. The policy is seen as key to achieving PM Modi’s goal of having net zero balance of electronics, and imports & exports.
The policy was launched in July 2012 for a three-year period and was recently revised to include white goods manufacturers and was extended till 2020.
The government is thinking of prioritising the scheme — it has received investment proposals up wards Rs 1 lakh crore — on segments of electronics manufacturing that truly deserve the subsidy. The finance ministry’s idea behind the reservations was to make sure the processes are robust enough to stand scrutiny even after a few years.
Since inception, firms such as Bosch Electronics, Samsung Electronics and Tejas Networks have sought the subsidy for their manufacturing facilities under this scheme.
By Baishakhi Dutta