Govt to focus on product cluster creation

Subsidies to electronic system design and manufacturing (ESDM) companies, creating clusters and driving demand for electronic products are some of the areas in which the government will invest as part of its recently announced Rs 10,000-crore package to encourage big manufacturing.

Support for the companies will include 20-25 per cent of capital incentives and reimbursed tax for selected projects, Joint Secretary for Department of IT, Ministry for Telecom and IT Ajay Kumar said while addressing delegates at the Freescale Technology Forum (FTF) which began in Bangalore on Thursday.

"The incentive can be availed by any company irrespective of the aspect of the value chain they represent (such as accessories or OEMs), Indian or multinational," Dr Kumar said, adding that domestic electronic system manufacturing has become a priority due to security concerns and the need to cut down the amount of import of electronic components.

The subsidies for companies will be available for ten years from date of approval and application to avail the subsidy should be submitted within the next three years.

The government is also gearing up to set up ESDM clusters across the country which will serve as key infrastructure for the hardware production ecosystem. Cost assistance of upto 50 percent of the total cost will be provided for greenfield clusters.

“There is enormous interest among the states to set up clusters. Punjab has announced a cluster, Andhra Pradesh has plans to set up two clusters in Hyderabad and Visakhapatnam, while Kerala has designated one cluster in Kochi,” Kumar said.

In order to promote electronic hardware, the government will accord preference to domestically produced equipment irrespective of Indian or foreign manufacturers. It has also set up an electronic skills council to create human resources for the sector is looking to set up a telecom skill council soon.

Realising the need for India to have its own semiconductor fabs which would result in cost effective electronic equipment for various applications, the government has also changed its approach from providing cash incentives to working closely with private partners and identifying with whom it would work closely.

"We have invited offers from potential technology providers and investors asking them what will it take to set up a fab. This process which started a year ago is now in the final stages of decision making. We are evaluating projects suited to Indian requirements which we can promote," he said.
Kumar said that government projects like the National Fiber Optic Network and National Knowledge Network, besides the tablet PC scheme for students, would drive demand for electronic products in the country.
 "There will be demand for 200 million set-top boxes in India and investments in this sector are expected to touch Rs 1.5 lakh crore by 2020," he said.
Freescale on Friday flagged off the eighth edition of FTF with the theme ‘Powering Innovation’, demonstrating aspects of technology such as the 'smart grid' which would help cut down power leakage and bring in accountability.
DH News Service

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