Rs 41 billion stimulus for mobile device manufacturers desi
Telecommunications and IT Minister Ravi Shankar Prasad said the approval of the schemes, granted by the Union Cabinet, aims to boost investment in the critical electronics segment while positioning India as a hub for global manufacturing.
TOI was the first to report on development in its March 3 issue, giving details on the mega plan to boost local electronics manufacturing and position India as a credible accountant for countries like China and Vietnam.
“Two long-term political decisions have been made to make India a hub for manufacturing electronic products in new directions and medical electronic products. The cabinet has approved the production of linked incentives for electronics companies. We will give Rs 40,995 crore in the next five years for the production of linked incentives in the manufacturing of mobile phones and specific electronic components, including assembly, testing, marking and packaging units, ”said Prasad.
The incentives will be linked to the companies’ incremental sales and capital investment, he added. “… Due to these schemes, we hope to generate a manufacturing revenue potential of Rs 10 lakh crore by 2025.” With the scheme, the government expects the internal value addition on mobile phones to increase to 35-40% by 2025 from the current level of 20-25%.
In addition to this, the Cabinet approved a rupee scheme of 3,285 rupees to promote the manufacture of electronic and semiconductor components. The scheme will provide a 25% financial incentive in capital expenditures for the identified list of electronic products that comprise the downstream electronic products value chain, such as electronic components, semiconductor / display manufacturing units, among others. The scheme is expected to create around 6 lakh of jobs (direct and indirect), he said.
In the electronics manufacturing groups, the Cabinet approved a budget outlay of Rs 3,762 million, to be granted over an 8-year period. The scheme will provide financial assistance up to 50% of the cost of the project, subject to the limit of Rs 70 crore for every 100 acres of land for the creation of cluster projects for the manufacture of electronic products.