The India Semiconductor Association has said that the Finance Minister's decision to fully exempt raw materials used in manufacturing specified electronic components from basic customs duty is a good move and would result in higher value addition.
"The government's plan to come out with National Manufacturing Policy and increase share of manufacturing in GDP from the present level of 16% to 25% over a period of 10 years is noteworthy," ISA said in a statement.
Reduction in basic customs for a few more materials used in the manufacturing of solar cells/modules to nil would correct the distortions in the duty structure and further strengthen solar PV manufacturing in India, it said.
Reduction in excise duty on LEDs to 5% and full exemption on special CVD would lower cost of manufacturing of LEDs and lead to faster adoption of LEDs in India.
Extension of concession available to parts, components and accessories used in manufacturing mobile handsets till March 31, 2012 and inclusion of a few more items in its ambit would further bring down manufacturing costs in India, it added.
The government’s decision to encourage innovation through National Innovation Council is a welcome step, it said. Constitution of State and sector specific innovation councils are expected to lead to more IPs coming out of India.
"Enhancing weighted deduction on payments made to National Laboratories, Universities and Institutes of Technology to 200% will give a fillip to R&D activities," ISA said.
Connectivity to all 1,500 institutions of Higher Learning and Research through optical fibre backbone by March, 2012 would enhance quality and delivery of education and research. Allocation of Rs 500 crore to National Skill Development Council would enable supply of skilled workforce.
The government has provided an impetus to the renewable energy and clean energy industry. Launching the National Mission for hybrid and electric vehicle would lead to growth of the automotive electronics segment.
ISA President Poornima Shenoy said, "ISA welcomes the Budget 2011 proposals which will stimulate manufacturing and innovation in India. The government's plans to come out with a National Manufacturing Policy and promote domestic value addition by rationalisation and reduction of duty structures is very commendable."
The increase in weighted deduction of payments to National Laboratories, Universities and Institutes of Technology to 200% would give a fillip to R&D activities.
