New Delhi, Apr 24 (KNN) The government has cleared investment proposals worth around Rs. 1,000 crore under the Modified Special Incentive Package Scheme (M-SIPS) to promote manufacturing of electronic products and components in the country.

Union Communications and Information Technology Minister Kapil Sibal met ambassadors and heads of chambers of commerce of countries such as the US, UK, Germany, Japan, South Korea and Taiwan here earlier this week to promote India for investment in electronics manufacturing.

“By and large, we had positive responses from all the representatives, and they all want to invest in India, which will also generate many jobs to our people,” Sibal told reporters here.

So far, the Department of Information Technology has received investment proposals worth Rs 2,000 crore under the scheme. 

“In terms of the M-SIPS, we got Rs 2,000 crore worth of proposals some more are in the offing.  We have cleared close to Rs 1,000 crore,” said the minister.

The manufacturing sector contributes about 16 per cent to the GDP besides playing a crucial role in providing large employment opportunities at a comparatively lower capital cost; and MSMEs contribute nearly 45 per cent of manufacturing output and 40 per cent of exports.

Under the M-SIPS, the government will provide up to Rs 10,000 crore in benefits to the industry during the 12th Five Year Plan (2012-17) for promoting domestic production of electronics products and components.

The scheme provides subsidy for investments in capital expenditure with a limit of 20 per cent for investments in the Special Economic Zone (SEZ) and 25 per cent in non-SEZs.
Incentives would be given to investments made to a project within 10 years from the date of its approval.   As many as 29 categories have been included by the government in ESDM sector that can avail benefit under M-SIPS.

Sibal said that the meeting was very encouraging and had a positive response.  The companies according to him were very interested in coming to India and increase their manufacturing.

However, the foreign representatives wanted clarifications on certain aspects.  “First was about the predictability of policies. We told them that all these policies, whether for electronics or telecom, are for 10 years.

“Secondly, they were concerned about preferential market access (PMA) and we told them that PMA in Government procurement and security will occupy only three per cent of the market, and the rest will be free,” he said.

All foreign companies, he added, would be treated on par with domestic manufacturers as long as they set up a manufacturing facility in India.  (KNN)