By - Mohana Roy on April 4, 2020
In pursuance of “Make in India” and “Digital India” programme of the Government of India and for reducing dependency on imports, the Ministry of Electronics and Information Technology (MeitY) has on April 1, 2020, notified two incentive schemes for encouraging domestic manufacturing of electronics. These schemes will further accomplish the vision of National Policy on Electronics, 2019(“NPE 2019”) by contributing towards making India a global hub for Electronic System Design and Manufacturing (ESDM).
The details of the schemes announced by MeitY are detailed below.
Although India’s electronic manufacturing has grown rapidly at around 25% for the last 4 years, India is still lagging as compared to its potential for growth. This is due to constraints regarding capital investment and rapid change in technology. The PIL Scheme shall provide a 4% to 6% incentive on incremental sales over the base year of manufacturing electronic components and semiconductors packaging in India.
Applicability: PIL Scheme is applicable only on:
In addition to the above, the manufacturers are also required to fulfil the prescribed threshold criterion for the incremental sale of manufactured goods.
Tenure: 5(Five) years subsequent to the base year.
Initial Application Period: 4 months from the date of notification i.e. till July 31, 2020. It may also be reopened based upon the response received from the industry.
Application Procedure: An initial application complete in all respect will be required to be submitted within the due date of the PIL Scheme. Incentives under the PIL Scheme will be applicable from August 1, 2020.
Incentive Outlay: The expected annual incentive outlay as proposed under the PIL Scheme is INR 40,951 crore (approx. USD 5.5 billion) for a period of five years. However, incentive per company will be subject to incremental sales of manufactured goods (as distinct from traded goods) over base year and ceilings as decided by the Empowered Committee.
Implementation Agencies: The PIL Scheme shall be implemented by two bodies namely:
SPECS proposes to provide an incentive of 25% of capital expenditure for the manufacturing of goods as prescribed. The incentive shall be provided on a reimbursement basis and investment will be available for the investment made within 5 years from the date of acknowledgement of the application.
Tenure: 3 years for application from the date of notification.
Implementation Agencies: The SPECS shall also be implemented by two bodies namely: Nodal Agency which will act as a Project Management Agency (PMA) be responsible for providing secretarial, managerial and implementation support and carrying out other responsibilities as assigned by MeitY from time to time and; Empowered Committee(EC) who will recommend PMA for approval/ rejection /modification of the application.
In addition to the schemes, MeitY will
notify guidelines entailing the complete procedure for application, appraisal,
and disbursement of incentives under both the schemes.