Government announces electronic development fund of Rs.10,000 crore

India on Friday said the electronics development fund (EDF) will become operational from next month onwards to support venture capitalists to fund electronic manufacturing in general and LED in particular.

"The cabinet approval for the EDF has been obtained very recently by the ministry of communications and information technology and a leading financial institution is being identified through which the EDF disbursements would be made," said Ajay Kumar, additional secretary in the ministry.

The secretary did not disclose the size of the EDF, pointing out that it would be totally market driven, depending upon the involvement of venture capitalists and its fund disbursement should take place following suggestions from the lead financial institutions, the name of which cannot be disclosed now, though the government had earlier visualised its size roughly at Rs.10,000 crore through the MSIPS scheme.

Similarly, the government would also put in place the national centre flexible electronics as also encourage by way of financial assistance the electronics making in India, emphasising innovations and research through one of the leading institutions of technology.

"The 10 percent annual subsidy on electronics would continue to encourage its manufacturing as also the government would go on incentivising the electronics making through various duty and import tariff reliefs," he said.

The secretary also informed that besides attracting an investment of Rs.1,10,000 crores in the electronic sector in the last one year, India has also been able to receive electronics manufacturing proposals from 20-25 overseas companies and domestic companies that had no exposure to the sector has begun to diversify into it in view of its potential.