NEW DELHI: The government has approved a mega Rs 41,000 crore booster for local manufacturing of mobile phones and their components, giving out incentives between 4-6% towards specified Make in India initiatives, apart from announcing a near Rs 7,000 crore scheme for manufacturing of electronics components, and for setting up manufacturing clusters.
Telecom and IT minister Ravi Shankar Prasad said that the approval to the schemes, given by the Union Cabinet, is aimed at boosting investments in the critical electronics segment while positioning India as a global manufacturing hub.
TOI was the first to report on the development in its edition dated March 3, giving details about the mega plan towards boosting local electronics manufacturing and positioning India as a credible counter to countries like China and Vietnam.
“Two long-term policy decisions have been taken to make India a hub of electronics manufacturing in new directions and medical electronics. Cabinet has approved production linked-incentive for electronics companies. We will give Rs 40,995 crore in the coming five years for production linked-incentive in mobile phone manufacturing and specified electronic components, including assembly, testing, marking and packaging units,” Prasad said.
Incentives will be linked to incremental sales and capital investment of the companies, he added. “ … because of these schemes, we hope to generate manufacturing revenue potential of Rs 10 lakh crore by 2025.” With the scheme, the government expects the domestic value addition in mobile phones to rise to 35-40% by 2025 from the current level of 20-25%.
Apart from this, the Cabinet cleared a Rs 3,285 crore scheme for promotion of manufacturing of electronics components and semiconductors. The scheme will provide financial incentive of 25% on capital expenditure for the identified list of electronic goods that comprise downstream value chain of electronic products such as electronic components, semiconductor/ display fabrication units, among others. The scheme is expected to create around 6 lakh (direct and indirect) jobs, he said.
On electronics manufacturing clusters, the Cabinet approved a budgetary outlay of Rs 3,762 crore, to be given over a period of 8 years. The scheme will provide financial help up to 50% of the project cost, subject to ceiling of Rs 70 crore per 100 acres of land for setting up of electronics manufacturing cluster projects.