Fearing that import of electronic equipment is expanding too rapidly, the Planning Commission has recommended that 30 per cent of government procurement of electronic hardware be reserved for domestic manufacturing.
The Commission felt the country's manufacturing capacities for electronic hardware was woefully behind the demand and would not expand unless a big push was given. By its estimates, the country's capacity of electronic manufactured goods was $20 billion in 2009, whereas the demand was $45 billion.
"If we do not give a big push to electronic hardware equipment manufacturing, we will not be able to convert ourselves into a hi-tech manufacturing economy," minister of state for planning Ashwini Kumar told Business Standard.
The Commission has proposed that 30 per cent preferential access or reservation be given to domestic manufacturing in government procurement, he said. If the country's capacity of manufacturing electronic hardware continues at the current rate and the demand also grows at the present pace, the latter would expand to $400 billion annually and the capacity to $106 billion by 2030, he said.
"It is possible that by 2030, our import bill for electronic equipment will out pace the petroleum, oil and lubricants (PoL) segment," Kumar said. During 2010-11, India's import bill of PoL was $101.7 billion , while that of electronic equipment was $36.8 billion.
The Commission has also suggested the Cabinet to set up two plants to manufacture semi-conductor wafers, with a total investment of Rs 7,500 crore, to boost the country's electronic hardware production.
"We have recommended to the Cabinet for establishment of two large wafer and semi-conductor facilities costing Rs 5,000 crore and Rs 2,500 crore," he said. He said locations for the plants were yet to be identified.
The Commission is likely to focus on 11-12 per cent annual growth in the manufacturing sector to grow employment by two million jobs in a year in the 12th Five Year Plan, which will start from April next year.
It has suggested establishing manufacturing regions across the dedicated rail freight corridor to give a big push to industrialisation.
Overall, the Commission aims to peg economic growth at 9-9.5 per cent a year on an average in the five-year period beginning 2012-13.
