SME Times News Bureau | 21 Mar, 2020
The Union
Cabinet has taken major decisions to enhance manufacturing in the electronic
components, semiconductors and mobile segments.
In its meeting on Friday, the Cabinet approved 'production-linked incentive
scheme (PLI)' scheme for promoting manufacturing of electronic components and
semiconductors' (SPECS) and Electronics Manufacturing Clusters (EMC) 2.0'.
The PLI scheme is proposed to offer a production-linked incentive to boost
domestic manufacturing and attract large investments in mobile phone
manufacturing and specified electronic components, including assembly, testing,
marking and packaging (ATMP) units, an official statement said.
It will extend an incentive of 4 per cent to 6 per cent on incremental sales
(over base year) of goods manufactured in India and covered under target
segments to eligible companies for a period of five years subsequent to the
base year as defined.
Addressing the media here on Saturday, Union Minister for Electronics and IT,
Ravi Shankar Prasad said that Centre has earmarked a budgetary outlay of Rs
40,995 crore for five years under this scheme.
As a result of the scheme, the domestic value addition for mobile phones is
expected to rise to 35-40 per cent by 2025 from the current level of 20-25 per
cent, as per the statement and the total employment (direct and indirect)
potential of the scheme is around 8 lakh jobs.
Under the scheme for 'Promotion of Manufacturing of Electronics Components and
Semiconductors', the government will provide financial incentive of 25 per cent
on capital expenditure for the identified list of electronic goods that
comprise downstream value chain of electronic products, including electronic
components, semiconductor or display fabrication units among others.
The government has earmarked a budget outlay of Rs 3,285 crore over a period of
eight years. The scheme is expected to create around 6 lakh direct and indirect
jobs.
It will be applicable to investments in new units and expansion of capacity or
modernisation and diversification of existing units.
The scheme will be open for applications initially for three years from the
date of its notification and the incentives will be available for the
investment made within five years from the date of acknowledgement of
application.
The third scheme, Electronics Manufacturing Clusters (EMC) 2.0, envisages
creation of quality infrastructure, with minimum area of 200 acres along with
industry specific facilities such as common facility centers, ready-built
factory sheds, plug and play facilities among others.
As per the scheme, the government will provide financial assistance up to 50
per cent of the project cost subject to a ceiling of Rs 70 crore per 100 acres
of land for setting up Electronics Manufacturing Cluster projects.
Projects will be implemented in consultation with anchor units or industries
for encouraging development of supply chain and ecosystem for the electronics
industry.
A total of Rs Rs 3,762.25 crore has been earmarked by the government for the
scheme for a period of eight years. The scheme is expected to create around 10
lakh direct and indirect jobs, as per the statement.
"The three schemes together will enable large-scale electronics
manufacturing, a domestic supply chain ecosystem of components and
state-of-the-art infrastructure and common facilities for large anchor units
and their supply chain partners.
"It will contribute significantly to achieving a $1 trillion digital
economy and a $5 trillion GDP by 2025, it said.