By Srabani Sen
Tuesday, July 9, 2013: Red tape and bureaucratic bickering, common in Indian government departments, have struck once again. For the last two years, the Department of Electronics and Information Technology (DeitY) has been making sincere efforts to promote electronics manufacturing in the country. But it seems that its new initiatives will have to first make it through the corridors of power, steering clear of inter-departmental bickering, before it can even begin to support the much neglected electronics industry.
Two recent developments have proved to be a major setback to DeitY’s initiatives. On July 5, in a high-level meeting at the Prime Minister’s Office (PMO), it was decided to put on hold, till further order, the preferential market access (PMA) policy that had promised preference to domestic telecom equipment manufacturers in all purchases made by government departments. The reason for this was cited as security concerns. The PMA policy makes it mandatory for the government to procure a certain percentage of its requirements from domestic manufacturers
Ever since this policy for telecom equipment came into effect, the MNCs, particularly from the US, whose high-tech exports to India were threatened, have been up in arms, pulling all the strings to get this policy revoked. Finally, they seem to have influenced the PMO in partially stalling the policy. This development also raises the same doubt that Electronics Bazaar had taken up in its July issue—is the government favouring the MNCs?
The second obstacle to DeitY’s initiatives to boost electronics manufacturing lies within. Despite its keenness to promote electronics manufacturing, proposals from companies amounting to about Rs 50 billion that were submitted under its incentive package scheme (M-SIPS), are stuck as the department is yet to finalise the authority that will sanction the subsidy money.
In July last year, the Cabinet had approved Rs 100 billion to incentivise electronics manufacturing in the country. Yet, DeitY hasn’t clarified till now the issue of who will approve the proposals, and hence 15 proposals worth Rs 50 billion are lying entangled in red tape. The concern is that large investors will not wait indefinitely for their approvals to get cleared.
While the tug of war goes on between the Ministry of Communications & Information Technology and the Ministry of Finance over this issue, it will definitely prompt these investors to sit back and really think about what other bureaucratic hurdles they may face even after getting their proposals cleared.
The second obstacle to DeitY’s initiatives to boost electronics manufacturing lies within. Despite its keenness to promote electronics manufacturing, proposals from companies amounting to about Rs 50 billion that were submitted under its incentive package scheme (M-SIPS), are stuck as the department is yet to finalise the authority that will sanction the subsidy money.
In July last year, the Cabinet had approved Rs 100 billion to incentivise electronics manufacturing in the country. Yet, DeitY hasn’t clarified till now the issue of who will approve the proposals, and hence 15 proposals worth Rs 50 billion are lying entangled in red tape. The concern is that large investors will not wait indefinitely for their approvals to get cleared.
While the tug of war goes on between the Ministry of Communications & Information Technology and the Ministry of Finance over this issue, it will definitely prompt these investors to sit back and really think about what other bureaucratic hurdles they may face even after getting their proposals cleared.
