'Electronics Development Fund to be operational in two months'

The fund is aimed at promoting innovation, intellectual property, R&D

The Centre’s electronic manufacturing policy, which has proposed a Rs 10,000-crore Electronics Development Fund to boost the domestic electronic systems design and manufacturing (ESDM) capacity, is likely to be rolled out in the next two months.

Through the fund, the government was aiming at promoting innovation, intellectual property, research and development, nano electronics and help commercialise made-in-India products, with a focus on minimising the imports.

A senior official associated with the ministry for industry promotion in the ESDM sector said: “The secretary in the department of Electronics and IT (DeitY) had forwarded the guidelines on the fund’s corpus among others to the ministry, and we expect the Cabinet approval soon. The fund is likely to be functional in the next two months”.

He also said a recent Cabinet note on the policy had pegged the actual size of the fund to be led by “market dynamics”, and added the ministry was keen on promoting the fund at least up to 2020 initially. The DietY in its National Policy on Electronics 2012 has pegged India’s demand for electronics in 2020 at $400 billion, while the domestic production is expected to touch $100 billion.

The proposal for setting up the fund dates back to 2005. However, it faced multiple hurdles with the recent being the Investment Promotion Cell (IPC) of the IT ministry saying adequate justification had not been provided to set up a venture capital fund for infrastructure related to electronic ecosystem development.

The DeitY had proposed the corpus be divided for various activities. It wanted 25-49 per cent of the fund for seed, early and growth stage activities in the electronics and technology acquisition. Similarly, it had proposed a corpus of 25 per cent for infrastructure related to electronics ecosystem development and manufacturing.

However, the IPC is of the opinion that a 100% government-backed VC fund will not be able to boost the private sector participation. It has also suggested the telecom department be included as one of the members of the fund board as DoT was a member of National Manufacturing Competitiveness Council and the policy of DeitY has close relation with the manufacturing of telecom equipment.