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Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Foreign Capital, Foreign Trade & BOP

The draft policy targets production of one billion mobile handsets by 2025, valued at $190 billion.AFP  

The government on Wednesday released a draft National Electronics Policy under which it is targeting a turnover of $400 billion for the electronics system design and manufacturing (ESDM) sector.

“This shall include targeted production of one billion mobile handsets by 2025, valued at $190 billion (approx. Rs. 13 lakh crore), including 600 million mobile handsets valued at $110 billion (about Rs. 7 lakh crore) for export,” the draft policy said. The policy also suggests replacing the Modified Special Incentive Package Scheme (M-SIPS) with ones that are easier to implement such as Interest subsidy and credit default guarantee to encourage new units and expansion of existing units in electronics manufacturing sector.

Tax benefits

It also recommends providing suitable direct tax benefits, including investment-linked deduction, for setting up of a manufacturing unit or expansion of an existing unit. The draft policy also pitches for support for infrastructure development through formulation of a new scheme or suitable modifications in the existing Electronics Manufacturing Clusters (EMC) Scheme, for supporting both greenfield and brownfield manufacturing clusters.

It also talks about establishing standards setting body in the Ministry of Electronics and Information Technology (MeitY) to develop standards for electronics, IT, e-governance, among others.

M-SIPS was launched in 2012. The scheme provides for capital subsidy of 25% for electronics industry located in non-special economic zone (SEZ) area and 20% for those in SEZ areas. As on September 30, 2018, 265 applications with proposed investment of Rs. 61,925 crore have been received under M-SIPS, out of which 188 applications with proposed investment of Rs. 40,922 crore have been approved. So far, investment worth Rs. 8,335 crore has been made by 139 applicants. EMC scheme was also launched in 2012 to provide quality infrastructure within a cluster. Under the scheme, 50% of the project cost for greenfield EMC and 75% for brownfield EMC is given by the Ministry as grant.

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