Govt expects Rs 24,000cr inflow in chip makingBS Reporters / New Delhi/Mumbai March 22, 2007The government expects to attract an investment of around $6-10 billion (approx. Rs 24,000-44,000 crore) by luring two-three fabrication units with at an investment of $2-3 billion each by 2010 now that it has notified (given formal consent) to the semiconductor policy it had announced on February 22 this year.Union Minister for IT and Communications Dayanidhi Maran told reporters here: "An appraisal committee to be headed by Additional Secretary in the Department of IT will be formed very soon. The committee will receive expression of interest from interested parties and will submit its recommendations to the government." He said he would reopen negotiations with Intel and other companies to explore possibilities of them setting up units in the country.An Intel spokesperson had then said: "Once the comprehensive policy document is circulated, we will evaluate and respond."Last month, the government had announced a host of incentives in the semiconductor policy that include bearing 20% of the capital expenditure during the first 10 years if a unit is located inside special economic zones (SEZ) and 25% in case of other units. The countervailing duty (CVD) on capital goods too would be exempted in case of units outside the SEZs. The policy further entails that for semiconductor manufacturing (wafer fabs) plants, the investment would be Rs 2,500 crore and Rs 1,000 crore for manufacturing of other products.Assuming the projects have a 1:1 debt to equity ratio, the government is likely to restrict its equity participation to around 26% of the equity portion. The remaining
