Centre to set up electronic development fund

Corpus to be accessible to govt and private sectors

Aiming to promote electronics manufacturing industries in the country, the Centre has decided to set up with dedicated electronic development fund with the initial corpus of Rs 5,000 crore.

The fund will be managed by the Department of Electronics and Information Technology and will be utilised for innovations, research and development (R&D), Indian Intellectual Property Rights (IPR) issues, product development and promotion of the electronic manufacturing sector.

“The fund can also be used to acquire foreign companies aiming to shift their production facilities to India. The corpus will be accessible to both-- government and private sectors,” a senior official in the department told Deccan Herald. There is also an option to increase the fund depending on the demand from the initial corpus of Rs 5,000 crore, the official added. 

The idea of setting up the fund was first mooted by a task force headed by V Krishnamurthy, Chairman, National Manufacturing Competitiveness Council (NMCC) constituted in 2009, to make suggestions in order to encourage domestic electronic hardware sector and same was approved by the Union Cabinet recently.

In the country, though, the consumption of electronics goods is increasing steadily, but is hardly met by imports due to shortage of domestic production.

Currently, the domestic demand for electronics is about $45 billion, which is likely to increase to $296 billion by 2020. However the production, at current pace, will be just $104 billion by 2020.

In order to cope up with the demand and supply disparity, the Centre has decided to start Modified Special Incentive Package Scheme (MSIPS) in the 12th Five Year Plan (2012-2017) to promote electronics industry in India with the investment of Rs 10,000 crore. 

“The policy is expected to create an indigenous manufacturing eco-system for electronics in the country. It will foster the manufacturing of indigenously designed and manufactured chips creating a more cyber secure ecosystem in the country,” said an official.  

The government has included 29 categories in Electronic System Design and Manufacturing (ESDM) sector that can avail the benefit of this MSIPS. This include-- telecom, IT hardware, consumer electronics, medical electronics, solar photo-voltaic, LEDs, LCDs, strategic electronics, avionics, industrial electronics, nano- electronics, semiconductor chips and other electronic components.

“The scheme has comprised units starting from raw materials assembly, testing, packaging and accessories which will boost ecosystem for electronics manufacturing in the country and reduce dependence on imports, the official added.