The government at the centre in India is planning a major initiative to boost electronic manufacturing in the country by pumping Rs 45,000 Crore in a fund that aims to push the electronic sector to a high level. This will give encouragement to the big electronics manufacturing firms and companies like Apple, Samsung and contract manufacturing companies like Wistron to start manufacturing their products in India and this will provide a major boost to the employment of locals in India. Other companies like Huawei, Foxconn, and Oppo will consider opening their hubs in India and start manufacturing locally. Shaivya Nautiyal and Dinkar Nautiyal from B&M Global Solutions find out more about this scheme.
Niramala Sitharaman, one of the most prominent BJP leaders and the current finance minister announced this plan in her budget speech on 1st February 2020. The aim of this plan is to invite the global leaders in electronics to India to start manufacturing here and start producing products locally. The leading electronic manufacturing companies are expected to choose India as a favorable destination for production and supply chain.
A 41,000 crore fund will be reserved for production-based activities and Rs 4000 crore will be kept for the capital subsidy that the government would provide for reimbursement purposes. This plan of the finance ministry be operation and take the place of the old M-SIPS scheme used earlier.
The 41,000 crores kept for production would encourage the creation of more jobs in India and about new 2, 00,000 jobs will be created. It will also increase exports by about Rs 5 lakh crore. The government would be earning high tax revenue through this scheme. The scheme will give a tax collection of Rs 5,000 crore for a period of 5 years.
According to Shaivya Nautiyal and Dinkar Nautiyal from B&M Global Solutions, the plan for disbursement will be made by the government in inter-ministerial consultations with concerned parties. The scheme would be just like the duty credit scrip policy used to pay the customs duty under MEIS plan, stated for an end and close down on 31st March this year.
The finance ministry has tried to make the new plan compliant with the rules of WTO or the World Trade Organization. However, the scheme will be implemented under strict criteria so that the companies and firms that sell products only locally cannot take advantage of the ambitious plan. For this, the government will set a certain qualification standard and criteria. The details of the scheme are not yet clear and it will be revealed at a later date. A draft proposal has been made and various concerned government departments have been informed about the same. The plan will boost the sale of electronics produced locally in India and make the country an important manufacturing hub for the global giants in electronic manufacturing.
This article is written by Shaivya Nautiyal and Dinkar Nautiyal from B&M Global Solutions.