Sibal asks states to frame policy for boosting electronics mfg

To facilitate investment in the electronics manufacturing segment, Telecom and IT Minister Kapil Sibal today asked the states to frame policy for the same in tandem with the central policy.

"We are looking to attract investment of around Rs 20,000 crore in the electronics sector this year. I want state governments to have their own manufacturing policy in tandem with central government. I am surprised that till now only four states have their electronics policy," Sibal said in a meeting attended by state ministers and top bureaucrats.

Till date only Karnataka, Andhra Pradesh, West Bengal and Madhya Pradesh have announced their electronics policy.

He added that government has received proposals worth Rs 4,000 crore for the sector in the last four months.

The Minister said that the fiscal benefits and other incentives under National Policy on Electronics (NPE) 2012 is available only for 10 years and states need to work to leverage benefits of the policy.

Under the policy, government has announced two sets of schemes in 2012 -- Electronics Manufacturing Cluster and Modified Special Incentive Package Scheme -- to attract investment in the electronics manufacturing sector.

Under MSIPS, government will provide incentives up to Rs 10,000 crore during the 12th Five-Year Plan period (2012-17).

The scheme will also provide subsidy for investments in capital expenditure with a limit of 20% for investments in Special Economic Zone and 25% in non-SEZs. The investors will get reimbursement of countervailing duties and excise for capital equipment for units set up outside SEZ.

The Minister expressed disappointment that all states have not come forward with zeal to take benefit of the policy.

Talking about the opportunity in the sector, Sibal said that size of global electronics industry is around $2 trillion and India's contribution to it is only 1.3%.

"It is four times the size of oils and minerals industry. The potential is huge. We need single window clearance, transparent land allocation policy, clean water, good quality of power to attract investments," he said.

On the demand of Gujarat to give benefits encourage manufacturing states

During the meeting, Gujarat demanded that to encourage electronics segment, states which are known for manufacturing should be given benefit under the GST framework being worked out and "non-manufacturing states should not only be protected".

On this Sibal said, "India is one. Lets not talk about manufacturing states and non-manufacturing states. Lets talk about India moving. I think we are become over years a bit state specific and state-centric ...

"Gujarat has been great leader in manufacturing not just in last 10 years but the last 40 years."