Electronics Component Manufacturing Scheme

GS2 – Ministry of Electronics and IT

 

Context:

The Union Cabinet has greenlit a new scheme to bolster India’s self-sufficiency in electronics manufacturing.

Scheme Overview:

• Purpose: The scheme targets the creation of a strong electronics component manufacturing framework by attracting significant domestic and international investments. It aims to increase local value addition and integrate Indian firms into global production networks.
• Budget Allocation: ₹22,919 crore
• Duration: Active for six years, preceded by a one-year preparatory phase.
• Incentive Model:
  • Incentives are differentiated based on the component category to address specific industry challenges.
  • Designed to help manufacturers reach technological maturity and achieve cost efficiencies.

Focus Areas:

• Sub-assemblies and bare components
• Selected components and supply chain equipment

Types of Incentives:

1. Employment-linked Incentives: Partial disbursal is tied to achieving direct job creation targets.
2. Turnover-based Incentives: FY 2024–25 is considered the base year for calculating turnover incentives.
3. Capital Expenditure (Capex) Incentives: Companies must meet minimum investment criteria and begin commercial production. 5% of the capex incentive is conditional on cumulative employment thresholds.
4. Hybrid Incentives: A mix of employment and capex-based incentives.

Implementation and Eligibility:

• Managed by the Ministry of Electronics and IT through a designated Project Management Agency (PMA).
• Open to both greenfield and brownfield projects.

Projected Impact:

• Investments Attracted: ₹59,350 crore
• Total Production: ₹4,56,500 crore
• Employment Generation: Around 91,600 new direct jobs, with additional indirect employment expected.