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Govt approves Rs 10k cr incentives for electronics manufacturing

Last Updated 18 January 2017, 17:20 IST

To boost electronic manufacturing in the country, the Union Cabinet on Wednesday approved incentives to the tune of Rs 10,000 crore for investors by amending the Modified Special Incentive Package Scheme (M-SIPS) scheme.

“We have amended the Modified Special Incentive Package Scheme (M-SIPS) scheme. Now, proposals under MSIPS will be accepted till December 2018. Incentives of Rs 10,000 crore have been allowed. If investment is more than $1 billion, then a high-powered committee presided by the Cabinet Secretary will approve it,” Law and IT Minister Ravi Shankar Prasad told reporters after the meeting.

As per the scheme, the applications will be received up to December 31, 2018, or till such time that an incentive commitment of Rs 10,000 crore is reached, whichever is earlier, an official statement said.

The previous amendment in MSIPS in August 2015 had extended the scheme till July 27, 2020. However, the government decided to cut down the application window to December 2018, to attract serious players and expedite projects, said an official from the Ministry of Electronics and Information Technology. The Cabinet, however, has decided to review the decision on further financial commitments in case the incentive commitment of Rs 10,000 crore is reached.

 For new approvals, the incentive under the scheme will be available from the date of approval of a project and not from the date of receipt of application. The incentives will be available for investments made within five years from the date of approval of the project.

Approvals will normally be accorded to eligible applications within 120 days of submission of the complete application. A unit receiving incentives under the scheme have to provide an undertaking to remain in commercial production for a period of at least three years.

 The appraisal committee recommending approval of project will be chaired by Secretary, Ministry of Electronics and IT. A separate committee headed by Cabinet Secretary will be set up in respect of mega projects, envisaging more than Rs 6,850 crore (approximately $1 billion) in investments.

The Union Cabinet in July, 2012 approved the M-SIPS to provide a special incentive package to promote large scale manufacturing in the Electronic System Design and Manufacturing (ESDM) sector. The scheme has attracted investments in the ESDM sector to the tune of Rs 1.26 lakh crore, of which investments of around Rs 17,997 crore have been approved by the Ministry of Electronics and Information Technology.

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(Published 18 January 2017, 17:20 IST)

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