The Centre has cleared a proposal to set up electronics manufacturing clusters with world-class infrastructure for hardware that can attract investments up to $400 billion and generate 28 million jobs.
The clusters will come up across the country and will be akin to the special economic zones with several benefits, including a host of tax sops.
Announcing the cabinet decision, home minister P Chidambaram said the clusters would help develop an entrepreneurial eco-system, drive innovation and catalyse the economy of the host regions. A task force report in 2009 said the demand for electronics hardware was projected to grow from $45 billion in 2009 to $400 billion by 2020, including exports of $80 billion.
For the projects the government will provide aid to special purpose vehicles.
Private companies, industry associations, financial institutions, research and development institutions, state or local governments or their agencies can promote these units.
“For greenfield (new) clusters the assistance will be restricted to 50 per cent of the project cost subject to a ceiling of Rs 50 crore for every 100 acres,“ Chidambaram said.
The government will provide assistance of up to 75 per cent of the project cost in case of brownfield clusters, with a ceiling of Rs 50 crore. Under the proposed national policy on electronics, the government plans to provide incentives to set up 200 such clusters. The first one will come up near Anantapur in Andhra Pradesh. The scheme has been approved for five years and the financial assistance under the policy will be subject to approval by the competent authority.
The scheme aims to boost electronics system design and manufacturing to reduce India’s reliance on imports, meet the demand of electronics with indigenous products.
The products that can be considered for setting clusters include computer hardware like desktops and laptops, notebooks, netbooks and tablet PCs, mobile handsets, liquid crystal displays, electronic components, semiconductors, memories, solid state memory products and electronics manufacturing services.
The clusters will help in taking on China, which is far ahead of India in electronics hardware manufacture. India is today largely dependent on China for hardware. Companies that manufacture electronics domestically will be given preferential market access.