New Delhi: In a bid to incentivise investments and move towards the goal of ‘net zero imports’ in the electronics sector by 2020, the Union cabinet approved on Wednesday amendments to the Modified Special Incentive Package Scheme (MSIPS).
The cabinet had cleared the M-SIP scheme in 2012 to promote large scale manufacturing in the electronic system design and manufacturing sector (ESDM). It provided subsidies for capital expenditure—20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs. In August 2015, the scheme was amended to enhance its scope and simplify procedure.
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The ESDM sector has already attracted investments to the tune of Rs1,26,838 crore, of which around Rs17,997 crore has been approved by the ministry of electronics and information technology.
“Our plan is to make India a big hub in electronic manufacturing. Right now we are giving direct work to one lakh people and indirect work to two lakh people in mobile sector. Right now our IT sector has investment of $150 billion. In electronic manufacturing-hardware alone it will be $500 billion in the coming five to 10 years and we will give jobs to three crore people. This is the potential of the sector," said Ravi Shankar Prasad, Union minister for electronics and information technology, after the cabinet meeting.
Besides expediting investments into the ESDM sector in India, the amendments to MSIPS are expected to create employment opportunities and reduce dependence on imports.
The projects already received under the scheme have the potential to generate direct and indirect employment for up to one million people.
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Applications will be received under the scheme up to 31 December 2018, or until such time when an incentive commitment of Rs10,000 crore is reached, whichever is earlier, according to an official statement.
“In case the incentive commitment of Rs10,000 crore is reached, a review will be held to decide further financial commitments," the statement said.
It explained that the “incentives will be available for investments made within five years from the date of approval of the project" and “a unit receiving incentives under the scheme, will provide an undertaking to remain in commercial production for a period of at least three years".
Prasad said a committee headed by the cabinet secretary will be set up to look at mega projects involving investments of more than Rs6,850 crore (about $1 billion). In response to a query regarding Apple Inc.’s plan to set up manufacturing in India, he said: “We would very much like Apple to come and have a base in India. They have a base in China, China is under stress. If a structured request came from them, we will consider with an open mind."