National Policy of Electronics proposes sops for electronics manufacture

National Policy of Electronics proposes sops for electronics manufacture

News

1. Ministry of Electronics and Information Technology (MeitY) has released the draft notification of ‘National Policy on Electronics 2018’ (NPE 2018) for the Electronics System Design and Manufacturing (ESDM) Sector of India.

Important facts:

2. The draft policy talks about replacement of schemes such as Modified Special Incentive Package Scheme (M-SIPS) with plans that are easier to implement, such as interest subsidy and credit default guarantee, in order to encourage new units and in the expansion of existing units in the electronics manufacturing sector.

Note

Modified Special Incentive Package Scheme (M-SIPS)

• To attract investments in Electronic manufacturing, Modified Special Incentive Package Scheme (M-SIPS) was notified in 2012.
• The scheme is available for both new projects and expansion projects.
• The scheme provides capital subsidy of 20% in SEZ (25% in non-SEZ) for units engaged in electronics manufacturing.

3. Government will provide support for infrastructure development through formulation a new scheme by modifying the existing Electronics Manufacturing Clusters (EMC) scheme, for supporting both greenfield and brownfield manufacturing clusters.
4. This shall include leveraging the existing and upcoming industrial clusters/manufacturing zones/corridors in the country, with provision for ready-built factories, for attracting investments in complete value chain of identified verticals.

Note

Electronics Manufacturing Clusters (EMC) scheme

• Electronics Manufacturing Clusters (EMC) scheme was notified in 2012 to provide support for creation of world-class infrastructure for attracting investments in the Electronics Systems Design and Manufacturing (ESDM) Sector.

5. The draft NPE 2018 talks about exempting the import duty on identified capital equipment not being manufactured in the country to reduce capital expenditure for setting up/expansion of existing units.
6. Forward looking and stable tax regime, including advance intimation to the industry to plan investments in the form of Phased Manufacturing Programme (PMP) in various segments of electronics, with a sunset clause should be promoted.
7. The draft talks about levying cess on identified electronic goods to be considered to generate resources for promotion of certain critical sub-sectors of electronics manufacturing such as semiconductor wafer fabrication and display fabrication units.
8. Also, to enhance understanding of cyber security issues/ concerns, risks and mitigation measures pertaining to electronic products and for the requirements of government sector, the Ministry will also set up a government-owned testing and evaluation facility.