Govt increases allocation for M-SIPS and EDF

WHILE THE Union Budget for 2017-18 aims to provide an impetus to electronic manufacturing by increasing allocation to various schemes that incentivise domestic production of these goods, it has also imposed a special additional duty on one of the key components used to manufacture mobile phones.

“Over 250 investment proposals for electronics manufacturing have been received in the last 2 years, totalling an investment of Rs 1.26lakhcrore.anumberofgloballeadersand mobilemanufacturershavesetupproduction facilitiesinindia.ihavethereforeexponentially increasedtheallocationforincentiveschemes like M-SIPS (Modified Special Incentive Package Scheme) and EDF (Electronic Development Fund) to Rs 745 crore in 201718,” Finance Minister Arun Jaitley said. This is significantly higher than the allocation of Rs 50 crore during 2016-17.

Earlier this month, the Union Cabinet had approved amendments to M-SIPS, according to which applications made under the scheme will be limited. The application window was also cut down by over one-and-ahalf year. The scheme provides for subsidy on capital expenditure — 20 per cent for investments in SEZS and 25 per cent in non-sezs.

“The budget falls short on creating avenues to increase the manufacturing of technology solutions in India beyond smartphones... there is a real opportunity to grow the PC manufacturing ecosystem,” said Debjani Ghosh, MD, South Asia, Intel and president of association of electronic goods manufacturers MAIT.