MSIPS to be re­con­structed over Fi­nance Min­istry’s sub­sidy con­cerns

Electronics Bazaar - - Industry News -

A key pro­gramme of the gov­ern­ment, aimed at boost­ing elec­tron­ics man­u­fac­tur­ing, is set for a re­vamp af­ter a pro­longed tus­sle be­tween the Min­istry of Elec­tron­ics and In­for­ma­tion Tech­nol­ogy (MeitY) and the Min­istry of Fi­nance led to scores of in­vest­ment pro­pos­als get­ting stuck.

The MSIPS in­cen­tivises com­pa­nies to man­u­fac­ture do­mes­ti­cally by pro­vid­ing them a 20-25 per cent sub­sidy on cap­i­tal ex­pen­di­ture. Ap­provals un­der the scheme have been on hold for the last cou­ple of months af­ter the fi­nance min­istry raised cer­tain con­cerns. This hia­tus has up­set an in­dus­try that had started to look at In­dia as a man­u­fac­tur­ing hub.

So far, pro­pos­als worth ` 180 bil­lion have been ap­proved un­der the pro­gramme with an es­ti­mated sub­sidy of around ` 40 bil­lion to be paid over the next 10 years. The pol­icy is seen as key to achiev­ing In­dia’s goal of be­ing 100 per cent self-re­liant in elec­tron­ics.

The gov­ern­ment is now also think­ing of pri­ori­tis­ing the scheme — it has re­ceived in­vest­ment pro­pos­als up­wards of ` 1000 bil­lion (` 1 lakh crore) on seg­ments of elec­tron­ics man­u­fac­tur­ing which truly de­serve the sub­sidy.

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