Government floats schemes to attract local electronic companies

NEW DELHI: The Centre on Tuesday sent out a call for applications from electronics manufacturers interested in availing the benefits of a set of incentive schemes worth a cumulative Rs 50,000 crore.First announced in March this year, the Centre is floating three incentive schemes in an effort to attract global mobile device makers and boost local electronics manufacturing.

The three schemes are: a Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), Modified Electronics Manufacturing Clusters (EMC 2.0), and a production linked incentive (PLI) scheme for large scale manufacturing.“There is a total incentive of Rs 50,000 crore. There are 5-6 large companies that control 80 per cent of the global mobile market. Initially, we will pick up five global champions who under the PLI scheme shall be permitted to participate. We will also promote 5 Indian companies to become national champions,” IT and Telecom Minister Ravi Shankar Prasad said.

According to Prasad, India has become the second largest mobile manufacturing country in the world, and is now working to lead the segment globally.

“The schemes have been opened today and companies can now submit their application,” Electronics and IT secretary Ajay Prakash Sawhney said.Under the PLI scheme, the Centre will offer 4-6 per cent incentive on incremental sales on a year-on-year basis. Industry estimates say that mobile manufacturers have the potential to get an incentive of around Rs 7,500 crore if they scale up production to worth about Rs 1.5 lakh crore over the next five years.

As for the other schemes, SPECS will offer companies a 25 per cent incentive on their capital expenditure. The government has set an investment range of Rs 5 crore to Rs 1,000 crore for entities willing to set-up component plants under the scheme. Under the EMC 2.0, the eligible companies will get an incentive of 50 per cent of the project with a limit of Rs 70 crore per 100 acres.