In a bid to eliminate imports of electronic items by 2020 and boost domestic manufacturing, the Union Cabinet on Wednesday approved amendments in the Modified Special Incentive Package Scheme (M-SIPS).

Besides to attract big ticket investments of around $1 billion in the sector, the Cabinet approved setting up of a committee, which will be headed by the Cabinet secretary P K Sinha and will include NITI Aayog CEO Amitabh Kant, expenditure secretary Ashok Lavasa and Ministry of electronics and information technology (MeitY) secretary, Aruna Sundararajan, for such mega projects,

The second set of amendments to the scheme, which was introduced in July 2012, have been made to create employment opportunities and to achieve goal of “Net Zero imports” in electronics by 2020. The latest amendments include providing sops of up to Rs 10,000 crore and clearing of eligible applications within 120 days.

So far, India has received 243 applications under MSIPS, of which 75 have been approved involving investment proposals worth Rs 17,997 crore.

In a statement, the government said: “Applications will be received under the scheme up to December 31, 2018 or till such time that an incentive commitment of Rs 10,000 crore is reached, whichever is earlier. In case the incentive commitment of Rs 10,000 crore is reached, a review will be held to decide further financial commitments”.

On clearance window, it said that such approvals will normally be accorded to “eligible applications within 120 days of submission of the complete application”.

Other amendments in the scheme include incentives being made available for investments made within five years from the date of project’s approval and the entity that will receive the incentives will have to provide an undertaking to remain in commercial production for a minimum of three years.

The government said that the appraisal committee, which will recommend approval of projects, will be chaired by the MeitY secretary.

Current demand for electronics and communication items in India is over $100 billion and is pegged to hit around $400 billion by 2020.

The government in July, 2012 had approved the M-SIPS to provide a special incentive package for promoting large scale manufacturing in the Electronic System Design and Manufacturing (ESDM) sector.

The scheme provides subsidy for capital expenditure — 20% for investments in SEZs and 25% in non-SEZs.

Source: The Financial Express