The Union Cabinet today approved the proposal to
provide a special incentive package to promote large-scale manufacturing in the
Electronic System Design and Manufacturing (ESDM) sector. The scheme is called
the Modified Special Incentive Package Scheme (M-SIPS). The main features of
M-SIPS are as follows:
(i)
The
scheme provides subsidy for investments in capital expenditure - 20% for
investments in SEZs and 25% in non-SEZs. It also provides for reimbursement of
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 is also provided.
(ii)
The
incentives are available for investments made in a project within a period of
10 years from the date of approval.
(iii)
The
incentives are available for 29 category of ESDM products including telecom, IT
hardware, consumer electronics, medical electronics, automotive electronics,
solar photovoltaic, LEDs, LCDs, strategic electronics, avionics, industrial
electronics, nano-electronics, semiconductor chips
and chip components, other electronic components and EMS. Units across the
value chain starting from raw materials including assembly, testing, packaging
and accessories of these category of products are
included. The scheme also provides incentives for relocation of units from
abroad.
(iv)
The
scheme is open for three years from notification.
Approvals for incentives not exceeding Rs.
10,000 crores will be granted during the XII Plan period.
The
projects with incentives of Rs 10,000 crores have
potential to create employment for nearly 0.5 million persons.
The
policy is expected to create an indigenous manufacturing eco-system for
electronics in the country. It will foster the manufacturing of indigenously
designed and manufactured chips creating a more cyber secure ecosystem in the
country. It will enable India to tap on the great economic potential that this
knowledge sector offers. The increased development and manufacturing in the
sector will lead to greater economic growth through more manufacturing and
consequently greater employment in the sector.
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SC/LM