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In a bid to spur the establishment of electronic and semiconductor component plants in the country, the government is set to launch a revised incentive scheme of up to Rs 10,000 crore, according to a report by The Economic Times (ET).
This plan will be an overhauled version of the current Scheme for the Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and is likely to be launched at the start of the next fiscal year. Officials were quoted as saying that instead of the reimbursement method being executed now, the scheme could be organised to allocate funds on a "pari-passu" basis.
In finance, "equal footing" means that two or more parties to a financial contract or claim are all treated the same.
On December 11, at the CII Electronic Summit, S Krishnan, Secretary, Ministry of Electronics and IT (Meity), said that the Centre is working on a second version of the incentive scheme for electronics components – Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS).
The HCL Group and Tamil Nadu-based Murugappa Group are also hammering out plans to enter the assembly, testing, marking, and packaging (ATMP) sector.
An official told ET that various component makers and ancillary industries are willing to set up facilities in India to support these ATMP plants and are asking for assistance from the government.
There has been a rush of such ancillary firms looking to set up allied units in Sanand in Gujarat after Micron received the nod from the central government to set up an ATMP unit there. Such companies are looking out for land near the Micron unit. Officials highlighted that such ancillary units will have to come up wherever new chip fabrication units are constructed.
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An official was quoted as saying that the corpus of Rs 3,200-3,300 crore allocated for the scheme is almost over. The Centre could look at increasing this fund to twice or three times the present size in the next iteration of the scheme.
What is the SPECS scheme?
The SPECS scheme offers a financial incentive of up to 25 per cent on total capital expenditure for a specific list of electronic goods. This list includes downstream value chain of electronic products such as electronic components, semiconductor or display fabrication units, and ATMP units. Notified in April 2020, the validity of the scheme ended on March 31, 2023.
