The modified special incentive package scheme (M-Sips) to promote large-scale manufacturing in electronics systems design and manufacturing (ESDM) sector.
M-Sips includes a slew of incentives for 29 categories of ESDM products like telecom, IT hardware, consumer electronics, solar photovoltaic among others. The incentives would be across value chain that is starting from raw assembly to testing, packaging and accessories of these products.
Projects will be approved in three years and benefits will extend for ten years. A capital subsidy of 20 per cent in special economic zones (SEZs) and 25 per cent in non-SEZs will be provided to electronic manufacturing companies.
Capital subsidy could apply to “existing companies for expansion and to new plants as well”. Approval for projects whose value does not exceed Rs 10,000 crore will be granted during the twelfth plan period.
For high technology and high capital investment units, like fabs, reimbursement of central taxes and duties is also provided. The government intends to attract investment of close to $7-10 billion from investors and companies wanting to set up semiconductor fabrication plants. In June, the government had invited expressions of interest (EoI) from investors and appointed accenture to review such proposals.
It is estimated that the proposal will generate incentives of close to Rs 10,000 crores and generate employment for close to half a million people.