Production subsidy guidelines for electronics manufacturers to be finalised soon: DeitY

NEW DELHI: The Narendra Modi government  is finalising guidelines for production-linked subsidies for companies willing to manufacture electronic items like microprocessors, semiconductors and others within India.

“We have introduced an element of production subsidy, now we are in process of finalising guidelines and since there are different kinds of projects, we are looking for specific technical inputs,” said Dr Ajay Kumar, additional secretary in Department of Electronics and Information Technology (DeitY) while addressing a roundtable conference on ‘Make in India: Trade and fiscal Incentives for IT hardware and electronics industry,’ conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“Where we need support in that is, to be able to pin-point what needs to be subsidised and how, some work is going on, the consultants are working on it, but any specific inputs from industry are more than welcome,” added Dr Kumar.

He said that the production subsidy is very substantive and a huge differentiator with 10 per cent of the turnover for 10 years and it is meant for projects that are capital incentive and possibly do not look attractive by themselves.

He also informed that government is working on fabless chip design policy. “That is work under progress, it will support the companies involved in chip design.”

He emphasised upon the need to manufacture low-priced laptops in India to spur computer manufacturing. “May be a price point of Rs 10,000 and it cannot be a device which can be seen as a low grade version of laptop.”

Dr Kumar also informed that with a view to push demand for PCs and other IT infrastructure, the government was formulating a project that would be launched during the course of about next three months to provide fundamental facilities of education, health, skilling and others to every village that is connected.

“Every village which has connectivity should have these 3-4 fundamental things - facility for e-education (virtual classroom), e-health whereby every PHC (primary health centre) will have telemedicine linked to the district hospital so that counselling and basic diagnostics can take place and skilling - resource centres in each Panchayat where through VC-kind of system people can be skilled and made available; CSCs (community service centres) - these can become four fundamental pieces in a village to be implemented in places where there is connectivity,” he said.

“After due approval, we hope to start implementing this scheme by March 2016,” added Dr Kumar.

He also said that about 20-25 interested parties had made presentations to the Canara Bank Venture Capital, the nodal agency for Electronics Development Fund (EDF) and they have zeroed on 6-7 cases.

Dr Kumar informed that the EDF is getting registered under the alternative investment fund (AIF) category. “That process, I am told should be over sometime in December, it is already before the SEBI (Securities Exchange Board of India) and there is a certain timeline which SEBI has to follow to register fund like this.”

“The moment EDF gets registered, we will have 6-7 cases which can immediately be supported under EDF, but that is still the beginning, I honestly feel that a whole lot of funding and innovation requirement should be met through this ecosystem of EDF,” said Dr Kumar.

“We are looking to expand this whole exercise of giving direct grant to industry for research and the Conditional Access System was one such effort, we now need to institutionalise this effort and we are trying to work in that direction, so it is not only that we give money to public sector institutions, but we also give it to the industry,” he further said.