House panel pulls up IT ministry for failing to use semiconductor funds

A parliamentary panel has pulled up the Ministry of Electronics and IT for surrendering more than half the funds allocated for semiconductor and display manufacturing projects in 2023-24, according to a report tabled in the Lok Sabha on Wednesday.

The Standing Committee on Communications and IT in the fourth report on demand for grants observed gradual decrease in allocation of funds from Budget Estimate (BE) 2021-22 to BE 2024-25 for Digital India Programme as well as underutilisation by the ministry over the years.

The report said under Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India, during FY24, of the total allocation of Rs 1,503.36 crore the actual expenses as on March 31, 2024 indicates that the ministry could spend only Rs 681.11 crore, "surrendering a staggering 55 per cent of the allotted fund".

"Surrendering of funds beyond 50 per cent allocated reflects improper planning by the ministry. The committee may be apprised of the reasons for non-utilisation of precious allocated funds which could have been allotted to other ministries for its effective utilisation," the report said.

The panel has requested MeitY to ensure realistic projections in the future as far as possible and ensure optimal utilisation of funds by way of better planning and robust monitoring mechanism.

The ministry in its submission to the panel shared that it can disburse funds under the India Semiconductor Mission only after a claim is made.

"Surrenders mainly come in the PLI, the electronics manufacturing and production-linked incentive scheme and in the semi-conductor programme because enough money is allocated under the Budget. Later on, when private companies are not able to spend and they are not able to file claims, then there is a surrender," the ministry had said.

Under the semiconductor mission, Micron Technology has proposed setting up an ATMP facility in India with an investment of Rs 22,516 crore, Tata Electronics for setting up a semiconductor fab facility in India with an investment of Rs 91,526, and an OSAT with an investment of Rs 27,120 crore.

CG Power has proposed setting up outsourced semiconductor assembly and test (OSAT) facility with an investment of Rs 7,584 crore, Kaynes Technology for setting up of an OSAT with an investment of Rs 3,307 crore.