Government to Offer Sops for Electronics Manufacturing in 8 Cities: Communications Minister

Focused on promoting India as an electronics manufacturing hub, the government on Tuesday identified 8 cities where companies setting up such facilities will be eligible for incentives, including subsidy.

In addition, 7 greenfield electronic manufacturing clusters will be set up and the government will promote chip-making facilities in the country, Communications and Information Technology Minister Ravi Shankar Prasad told reporters on Tuesday.

"Electronic manufacturing is going to be the key area of my priority...It is very much employment-based sector. We can give employment to 2.8 crore people," the minister said.

Under the Modified Special Incentive Package Scheme (M-SIPS) notified in July 2012, refunds will be provided on capital expenditure for new units or for expansion of more than 25 per cent of existing capacity in certain greenfield or brownfield electronics manufacturing clusters.

The scheme covers production of products across the value chain from raw material, components, design & chip, assembly, testing, R&D and packaging.

The government has allocated Rs 10,000 crore for M-SIPS in the 12th Five-Year Plan.

"We have selected 8 new areas for M-SIPS. We have selected Ghaziabad, Vadodara, Ahmedabad, Gandhinagar, Nagpur, Nasik, Aurangabad and Thane. If someone sets up an electronic manufacturing facility here, they will be given subsidy," the minister said.

Besides, the government will also promote chip-making facilities in the country.

The government approved the setting up of 2 semiconductor wafer fabrication manufacturing facilities in the country in February.

"Promoting semiconductor fab facility is very important. We have decided that we will promote fab manufacturing facility," he said.

On the telecom sector, Mr Prasad said state-owned operators BSNL and MTNL have been directed to improve the quality of services to consumers and their performance will be monitored.

He also said he has asked the Department of Telecom (DoT) to look into a report by Vodafone, which said India is among 29 countries that sought access to its network for intercepting calls, SMSs and e-mails.

He said Rs 5,000 crore will be earmarked to augment the telecom infrastructure in the north-eastern states.

About the postal department, one of the largest in the world, Mr Prasad said, "We are going to start new scheme of postal bank."