MSIPS to be reconstructed over Finance Ministry’s subsidy concerns
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.