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Cabinet okays three schemes worth Rs 48k crore to promote electronics manufacturing

A second scheme to further promote electronics manufacturing clusters was approved by the Cabinet on Friday, Ravi Shankar Prasad said.

Published: March 22, 2020 10:23:03 am
Ravi shankar prasad, cabinet clears money, electrnic equipment,economy news, business news, indian express A PLI of 4-6 per cent will be given to the manufacturing units, based on incremental sales for five years from the base year during which the company starts making these products in India, Prasad said. (File Photo)

The union Cabinet on Friday approved three new schemes, worth over Rs 48,000 crore, to promote large-scale electronics manufacturing, electronic component, and semiconductor manufacturing in the country, Information Technology Minister Ravi Shankar Prasad said on Saturday.

To promote large-scale manufacturing in the country, the government has decided to provide production-linked incentive (PLI) to global and domestic companies engaged in manufacturing, assembly, testing, marking, and packaging of mobile phones as well as certain specified electronic equipment.

A PLI of 4-6 per cent will be given to the manufacturing units, based on incremental sales for five years from the base year during which the company starts making these products in India, Prasad said, adding the government intends to spend nearly Rs 41,000 crore on the scheme.

A second scheme to further promote electronics manufacturing clusters was approved by the Cabinet on Friday, Prasad said. Under the scheme, electronics manufacturing clusters spread over a minimum area of 200 acres in the plains and at least 100 acres in the hills and Northeast India will be given financial assistance of up to Rs 70 crore per 100 acres.

For the common facility centre, which will have plug-and-play facilities for smaller units around the anchor company, the government intends to finance up to 75 per cent of the project cost, subject to a maximum of Rs 75 crore. The government plans to spend Rs 3,762 crore on the project over the next 8 years.

A third scheme, which will provide a financial incentive of 25 per cent on capital expenditure for making goods that constitute the supply chain of an electronic product, has also been approved by the Cabinet, Prasad said. The total outlay on the project is Rs 3,285 crore over the next 8 years.

The government’s initial plans to make India a hub for high end large electronics equipment and semiconductor units hit a roadblock after most global companies opted to assemble in India rather than set up manufacturing units.

The Economic Survey 2019-20 noted this and observed India should follow the Chinese model of becoming an assembling hub for the world for ‘network products’ such as computers, electronics, and road vehicles to raise its share in the world export market.

Among the major focus industries targeted under the Make in India scheme, the mobile, telecommunication and electronics equipment manufacturing, is still largely restricted to the assembling of knocked-down kits despite a slew of global companies having set up units in the country.

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