Electronics ministry to reply to FinMin shortly on M-SIPS queries

The electronics and information technology ministry will write to the finance ministry in the next few weeks on concerns raised by the latter regarding the Modified Special Incentive Package Scheme (M-SIPS), which aims to promote electronic manufacturing via incentives for companies to set up units. The finance ministry had various issues on the scheme.

Among these were that it should not an open-ended one and about the measure for deciding a scheme had attained maturity. It also wanted a sectoral cap and asked how many big companies could be brought in.  “Within the next few weeks, we will finalise (our response) and send it back,” said ministry secretary Aruna Sundararajan. On the query regarding the open-ended nature of the scheme, she said they were working on what would be a realistic level of investment.

She added her  ministry was not in favour of sectoral caps, as didn't know which area the investment would come in. As for how many large projects could be brought in, “we need to understand what we need to do to incentivise them...very large companies have still not come in because, clearly, for them even with this level of subsidiaation, it is still not becoming viable for their other disabilities which need to be addressed, in terms of logistics, costs”, she added.

Which would mean that apart from subsidies, they'd have to see what other forms of support were required, beyond money. “We need to understand what is that something which will incentivise them,” she added.