Mobile phone cos likely to invest Rs 650 cr by March: Ravi Shankar Prasad

Mobile phone companies are likely to invest Rs 650 crore by March and production of handsets in value terms is expected to cross Rs 40,000 crore by the end of current fiscal, Parliament was informed today.

"The total investment made by companies during the past 7-8 months are estimated to be in the range of Rs 250-300 crore which is likely to increase to Rs 600-650 crore by the end of 2015-16," Telecom Minister Ravi Shankar Prasad said in a written reply in Lok Sabha.

He was replying to a question on mobile phones production in the country.

"As per the Indian Cellular Associations, the production of mobile phones in India during current financial year is expected to cross Rs 40,000 crore compared to the production of Rs 18,900 crore during 2014-15," Prasad said.

He said over 30,000 new jobs have already been generated in this industry during the past 7-8 months and an additional 8,000-10,000 jobs are expected to be generated by the end of current fiscal.

"The differential duty for mobile handset manufacturing is being termed as a game changer by the industry and consequent to this various mobile phone manufacturing companies like Foxconn, Xiaomi, Micromax, Celkon and Karbonn have committed to mobile phone manufacturing in the country," Prasad said.

The minister mentioned the government is providing modified special incentive package scheme (M-SIPS) which provides financial incentives to offset disabilities that electronic manufacturing sector has been facing.

Replying to a separate question on manufacturing of set- top-boxes in the country, Prasad said as per Consumer Electronics and Appliances Manufacturers Association (CEAMA), 4.5 million STBs were produced in 2013-14, 5.5 million in 2014-15 and estimated to reach 9 million by end of the fiscal.

"Major parts required for the manufacturing of STBs are permitted at zero BCD (basic custom duty). The issue of central sales tax being charges at VAT rate (12.5%) for indigenous STB manufacturers has been resolved by enabling the multi system operators to issue C form to indigenous manufacturers," Prasad said.

Additionally, he said, the Department of Electronics and IT has successfully funded Indian Conditional Access System (iCAS) which is available for use by domestic manufacturers at a price of $0.5 per licence for a period of three years compared to market price of $4-5 per licence.