Lok Sabha Question No. 616 (UNSTARRED), answered on 2020-02-05
Subject: M-SIPS
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Rahul Ramesh Shewale

## GOVERNMENT OF INDIA

## MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO.616

TO BE ANSWERED ON: 05.02.2020

## M-SIPS

## 616.   SHRI  RAHUL RAMESH SHEWALE:

Will the Minister of Electronics & Information Technology be pleased to state:-

- (a) the  salient  features  of  the  Modified  Special  Incentive  Package  Scheme  (M-SIPS)  implemented  by  the Government in the country;
- (b) the  number  of  proposals  received  by  the  Government  under  the  said  scheme  since  inception  along  with  the present status of such proposals;
- (c) the investment made into the electronics hardware manufacturing during each of the last three years along with the employment generated from such investment across the country so far in the same period, State/UT wise;
- (d) the details of the subsidy provided by the Government for investment in Capital Expenditure so far under the said scheme; and
- (e) the  other  steps  taken/being  taken  by  the  Government  to  promote  electronic  hardware  manufacturing  in  the country?

## ANSWER

## MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI SANJAY DHOTRE)

- (a):  Modified Special Incentive Package Scheme (M-SIPS) was notified on 27 th July, 2012. The scheme has been amended in August, 2015 to extend the period of the Scheme, enhance scope of the Scheme by including 15 more product verticals, and attract more investment. The Scheme was further amended in January, 2017 to expedite the investments.

The salient features of the scheme are as follows:

- i. The scheme provides subsidy for capital expenditure - 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs.
- ii. The scheme was open to receive applications till 31-12-2018.
- iii. The incentives are available for a period of 5 years from the date of approval of application.
- iv. The incentives are available for both new units and expansion units.
- v. The incentives are available for 44  categories/verticals of electronic products and  components covering entire electronics manufacturing value chain.
6. (b):  Under the Scheme, 397 proposals have been received and are under consideration. The status of the proposal is as below:
7. (c):    As  per  Quarterly  Progress  Reports  received  from  the  approved  applicants  under  M-SIPS, statewise  details  of  investment  made  by  these  applicants  for  the  project  under  MSIPS,  is  as  given below:
8. (d):  As on date, incentives of Rs.897.07crore have been disbursed to 71 applicants.
9. (e):  Following steps have been taken by Government to promote electronic hardware manufacturing in India:
- i. National Policy on Electronics 2019 : The National Policy on Electronics 2019 (NPE 2019) has been  notified  on  25.02.2019.  The  vision  of  NPE  2019  is  to  position  India  as  a  global  hub  for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the  country  for  developing  core  components,  including  chipsets,  and  creating  an  enabling environment for the industry to compete globally.
- ii. 100%  FDI: As  per  extant  Foreign  Direct  Investment  (FDI)  policy,  FDI  upto  100%  under  the automatic route is permitted for electronics manufacturing, subject to applicable laws/ regulations; security and other conditionalities.
- iii. Electronics  Manufacturing  Clusters  (EMC)  Scheme : Electronics Manufacturing Cluster Scheme has been notified on 22 nd October,  2012  to  provide  support  for  creation  of  world-class infrastructure along with common facilities and amenities for attracting investment in  Electronics System Design and Manufacturing (ESDM) sector. Under the Scheme, 20 Greenfield EMCs and 3 Common Facility Centres (CFCs) measuring an area of 3,565 acres with project cost of Rs 3,898 crore including Government Grant-in-Aid of Rs 1,577 crore have been approved.
- iv. Electronics Development Fund (EDF) : EDF has been set up to provide risk capital to companies developing  new  technologies  in the area of electronics, nano-electronics  and Information Technology (IT) . Rs. 659 crore has been committed through EDF to 11 Daughter Funds, with a targeted corpus of INR 5,500 crore.
- v. Phased Manufacturing Programme (PMP) has been notified to promote domestic value addition in mobile handsets and their parts/ components manufacturing.
- vi. Tariff Structure has  been  rationalized  to  promote  domestic  manufacturing  of  electronic  goods, including, inter-alia, Cellular mobile handsets, Televisions, Electronic components, Set Top Boxes for TV, LED products and Medical electronics equipment.
- vii. Basic Customs Duty on capital goods: Government has also exempted import of notified capital goods for manufacture of specified electronic goods from Basic Customs Duty.
- viii. Simplified import of used plant and machinery: The import of used plant and machinery having a  residual  life  of  at  least  5  years  for  use  by  the  electronics  manufacturing  industry  has  been simplified through the amendment of Hazardous and Other Wastes (Management and
18. Transboundary  Movement)  Rules,  2016,  vide  Ministry  of  Environment,  Forest  and  Climate Change Notification dated 11.06.2018.
- ix. Relaxing  the  ageing  restriction: The  Department  of  Revenue  vide  Notification  No.60/2018Customs dated 11.09.2018  has  amended  the  Notification  No.158/95-Customs  dated  14.11.1995, relaxing the ageing restriction from 3 years to 7 years for specified electronic goods manufactured in India and re-imported into India for repairs or reconditioning.
- x. Compulsory  Registration  Order  (CRO) :  MeitY  has  notified  'Electronics  and  Information Technology  Goods  (Requirement  of  Compulsory  Registration)  Order,  2012'  for  mandatory compliance  to  ensure  safety  of  Indian  citizens  by  curbing  import  of  substandard  and  unsafe electronic goods into India.

|                 |   Number | Investment (Rs. Crore) Incentives Committed (Rs. Crore)   | Investment (Rs. Crore) Incentives Committed (Rs. Crore)   |
|-----------------|----------|-----------------------------------------------------------|-----------------------------------------------------------|
| Approved        |      252 | 72,048                                                    | 7,080                                                     |
| Under Appraisal |      145 | 36,076                                                    | -                                                         |
| Total           |      397 | 1,08,124                                                  | 7,080                                                     |

| state   | Numbe r of units   | Capex incurred till March 2018 (Rs Cr.)   | Capex Incurred from April 2018 to March 2019 (Rs. Cr.)   | Capex incurred from April 2019 to Jan 2020 (Rs Cr.)   | Employ ment (Direct + Indirect)   |
|---------|--------------------|-------------------------------------------|----------------------------------------------------------|-------------------------------------------------------|-----------------------------------|

| Andhra pradesh                         |   5 | 25   |   43 |   30 |    978 |
|----------------------------------------|-----|------|------|------|--------|
| Daman                                  |   1 | -    |   14 |    0 |   1634 |
| Goa                                    |   7 | 9    |   59 |  125 |   1639 |
| Gujarat                                |  14 | 124  |   58 | 3555 |   6668 |
| Haryana                                |  25 | 442  |  327 |  390 |   9719 |
| Himachal Pradesh                       |   3 | -    |   20 |   15 |    519 |
| Karnataka                              |  28 | 1096 |  810 |  459 |   5532 |
| Kerala                                 |   4 | 110  |    0 |    0 |   5778 |
| Madhya Pradesh                         |   2 | -    |   21 |   46 |    249 |
| Maharashtra                            |  36 | 1556 |  369 | 1011 |  11194 |
| Rajasthan                              |   8 | 601  |  117 |  366 |   3930 |
| Tamil Nadu                             |  13 | 217  |  193 |  465 |   8368 |
| Telangana                              |   3 | 4    |   26 |  164 |    770 |
| Uttar Pradesh                          |  22 | 219  | 2991 | 1057 |  43305 |
| Uttarakhand                            |   3 | 57   |    5 |   21 |   2350 |
| West Bangal                            |   4 | 243  |    0 |   73 |   2033 |
| Goa/Maharastra/Tamilnadu/ UP           |   1 | -    |    7 |    0 |    188 |
| Telangana, Rajasthan and Uttar Pradesh |   1 | 96   |    0 |   24 |   1845 |
| Maharashtra and Karnataka              |   1 | 7    |    0 |   69 |   2675 |
| Tamil Nadu and Uttar Pradesh           |   1 | 96   |   17 |  105 |  11240 |
|                                        | 182 | 4902 | 5077 | 7976 | 120614 |