Electronic System Design and Manufacturing Sector – M-SIPS, National Policy on Electronics, etc.

Draft electronics policy: Govt aims $400-billion electronics manufacturing sector by 2025


Mains Paper 3: Economy | Changes in industrial policy and their effects on industrial growth

From UPSC perspective, the following things are important:

Prelims level: Particulars of the draft policy

Mains level: Electronics manufacturing sector in India


Draft Electronics Policy

  1. With an aim to create $400-billion electronics manufacturing industry by 2025, the Ministry of Electronics and Information Technology has come out with a draft electronics policy.
  2. The government is working on a framework to increase the competitiveness of made in India electronics products that will include efforts to improve the ease of doing business.
  3. According to the draft, the government plans to end modified special incentive scheme with new schemes that it will find easier to implement such as interest subsidy and credit default guarantee etc.
  4. Modified Special Incentive Package scheme (M-SIPS) was launched in 2012 which provided for capital subsidy of 25 per cent for Electronics Industry located in non-SEZ area and 20 per cent for those in SEZ areas.
  5. One of the objectives of the policy is to provide support for “significantly” enhancing availability of skilled manpower in the electronics system design and manufacturing industry.

Key propositions of the draft Policy

  1. The policy aims to push development of core competencies in all the sub-sectors of electronics including electronic components and semiconductors, defence electronics, automotive electronics, industrial electronics, strategic Electronics etc.
  2. The draft also proposes suitable direct tax benefits, including inter-alia investment-linked deduction under Income Tax Act for electronics manufacturing sector, for setting up of a new manufacturing unit or expansion of an existing unit.
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