Prelims – General Science & Sustainable Development | Current events of national & international importance.
Mains (GS III) – Technology, Economic Development
Why in news?
Recently, the Union Cabinet had approved the Electronics Component Manufacturing Scheme to make India Atmanirbhar in electronics supply chain.
What is Electronic Component Manufacturing Scheme?
- It is a central sector scheme to expand electronics manufacturing beyond semiconductors, IT hardware, and mobile phones.
- Nodal agency - Ministry of Electronics and Information Technology (MeitY).
- Objectives – Developing a robust component ecosystem by attracting large investments (global/domestic) in electronics component manufacturing ecosystem.
- Increasing Domestic Value Addition (DVA) by developing capacity and capabilities.
- Integrating Indian companies with Global Value Chains (GVCs).
- Budget - Rs.22,919 crore.
- Tenure - 6 years with 1 year of gestation period.
- Targets
- Rs59,350 crore in investments
- Production worth Rs4,56,500 crore
- Creation of 91,600 direct jobs in the coming years.
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Status of Electronics Segment in India
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- Electronics is one of the highest-traded and fastest-growing industries globally.
- Role of electronics – It is expected to play a pivotal role in shaping the global economy and advancing a country's economic and technological development.
- Since electronics permeates all sectors of economy it has economic and strategic importance.
- With various initiatives of Gol, the electronics manufacturing sector has witnessed remarkable growth in the last decade.
- Domestic production of electronic goods – It has increased at a CAGR of more than 17% from FY 2014-15 to FY 2023-24.
- Exports of electronic goods - It have also increased from FY 2014-15 to to FY 2023-24 at a CAGR of more than 20%.
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What are its features?
- It provides differentiated incentives to Indian manufacturers tailored to overcome specific disabilities for various categories of components and sub-assemblies.
- Thus, manufacturers can acquire technological capabilities and achieve economies of scale.
- Electronic Component Manufacturing Scheme – They are classified under 4 categories.
- Sub-assemblies
- Bare components
- Selected bare components
- Supply chain ecosystem & capital equipment for electronics manufacturing
- Incentives – Turnover linked incentive, Hybrid incentive and capex incentives.
- Unlike previous schemes, it is not based on a production-linked incentive, where manufacturers will be rewarded for incremental manufacturing.
Turnover linked incentives are based on the total revenue generated by a manufacturing unit from the sale of its products over a specific period.
- Payout of a part of the incentive is linked with employment targets achievement.
What are the benefits of the scheme?
- Boosts domestic manufacturing – It can reduce import dependency by promoting the production of semiconductors, circuit boards, and batteries.
- It aims for Rs59,350 crore in investments, encouraging factories and R&D centers.
- Generates employment – It is expected to create 91,600 direct jobs and more in related sectors.
- Enhances value addition – It shifts focus from assembly to component manufacturing, strengthening economic resilience.
- Supports self-reliance – It advances Make in India and Secures the Electronics Supply Chain.
- Strengthens tech leadership – It can aid AI, Internet of Things, and EV development, boosting India’s global tech position.
- Stable incentives model – Rewards turnover and employment creation over mere production increases.
Quick Facts
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Ministry Of Electronics and Information Technology
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- Establishment – 2016.
- It is carved out from the Ministry of Communications and Information Technology, based on Narayana Murthy Committee recommendations)
- Mission – To advance Digital Governance, foster inclusive growth in electronics and IT, strengthen Internet Governance, promote R&D and innovation, and ensure cybersecurity.
- Key Objectives
- e-Government – Develop e-infrastructure for digital services.
- e-Industry – Support electronics manufacturing and IT-ITeS sector.
- e-Innovation/R&D – Build research and innovation infrastructure.
- e-Learning – Promote digital skills and knowledge networks.
- e-Security – Secure India’s cyberspace.
- e-Inclusion – Leveraging ICT for Inclusive Growth.
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Reference
PIB| Approval of New Electronic Component Manufacturing Scheme
