The Union Cabinet on Tuesday approved the National Electronics Policy 2019 aimed at achieving a turnover of $400 billion (about ₹26 lakh crore) for the electronics system design and manufacturing (ESDM) sector by 2025, while generating employment opportunities for one crore people.
“The policy will enable flow of investment and technology, leading to higher value addition in the domestically manufactured electronic products and increased manufacturing of electronics hardware for local use as well as exports,” IT and Law Minister Ravi Shankar Prasad said.
The policy has introduced “easier to implement” incentive schemes, including an interest subvention scheme and credit default guarantee, to replace some of the existing ones under the National Electronics Policy 2012.
It proposes to provide interest subsidy of 4% on loans up to ₹1,000 crore on plant and machinery, an IT Ministry official told The Hindu , adding that in case of larger loans, the subsidy would be limited to ₹1,000 crore.
Default guarantee
The government proposes to create a fund to provide default guarantee of up to 75% to banks for plant and machine loans of up to ₹100 crore. “This will eliminate the need for small and new investors to provide third-party collateral… the scheme will be on the pattern of credit guarantee being provided by SIDBI for the SME sector,” the official said.
However, for both these schemes, consultations are on with the Department of Expenditure, the official added. They will be launched once the policy is notified.
To help create an ecosystem, the policy has pitched for 2.0 version of the Electronics Manufacturing Cluster Scheme, under which infrastructure support will be provided for a group of industries that are part of the product supply chain rather than individual industries.
It has also proposed a sovereign patent fund to acquire intellectual property for chips and chip components.
