In a bid to promote electronic sector, the Union Cabinet Thursday approved a proposal Modified Special Incentive Package Scheme (M-SIPS), a specially designed package for large scale manufacturing in Electronic System Design and Manufacturing (ESDM).
This move of government is likely to boost indigenous manufacturing eco-system for electronics that was earlier deficient in India.
Under M-SIPS scheme, the provision of granting subsidy will be provided in investments in both SEZs and non-SEZs industries. For SEZs, 20% subsidy will be granted in capital expenditure while in 25% subsidy will be allowed for 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.
The incentives are available for investments made in a project within a period of 10 years from the date of approval.
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.
The scheme also provides incentives for relocation of units from abroad. 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.
--With IANS Inputs--
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