The Electronics Industry Association of Andhra Pradesh (ELIAP), a nodal agency of the government, has been working closely with the state government for the past 42 years to help formulate policies that will benefit the electronics industry in the state. The 300-member body has succeeded once again in bringing Andhra Pradesh’s (AP) electronics hardware industry under the state’s Ministry of Information Technology and Communication (IT&C)—a shift from the Industries Department. In a conversation with Nitasha Chawla of Electronics Bazaar, N Siva Prasad, president, ELIAP, talks about the prevailing situation, about what the state offers its players, and how it can cut down on imports.
EB: How is the electronics industry doing in AP?
The electronics industry in AP comprises various segments such as electronic components, medical electronics, telecommunication equipment, strategic electronics, embedded systems design and manufacturing, electronic instrumentation, LED lighting, solar energy systems, etc. The industry is growing at an average rate of 20 per cent every year.
EB: Compared to other states, what are AP’s strong and weak points?
Hyderabad is the fifth largest metro in India and is strategically located—equidistant from the west and east coasts. It has a world class airport with connectivity to major destinations in the globe. The state has over 750 engineering colleges churning out skilled manpower. Also, the proactive approach of the government in announcing incentives for the electronics industry is another advantage that has helped the industry grow.
However, the state has certain weak points. The political unrest caused by the recent Telangana movement has been a setback for the industry, hampering its progress with the frequent bandhs disrupting its smooth functioning. Also, the frequent power cuts in AP are a major issue faced by the industry. However, the government has assured us that the situation will improve soon.
EB: How will the new state electronics policy help the industry in the state?
The policy will enable the new entrants in the industry to avail maximum benefits and surge forward in setting up their industries. The existing industries, on the other hand, can benefit from the various schemes and avail the subsidies provided under these schemes. It will enable the existing companies to expand their production facilities, thus generating employment in the region.
EB: What is the role of ELIAP in the electronics industry?
ELIAP focuses on the overall improvement of the industry by acting as a bridge between the industry and the government, to get the best support needed by the electronics industry. We advice the government from time to time on the policy measures required for the benefit of the electronics sector. We have direct interactions with the state government since the president of ELIAP is a core committee member in the Consultative Committee of IT Industries and is also a member of the business advisory committee to the Chief Minister of AP.
I believe that the approach of the Government of India in prioritising this sector could give rise to an electronics revolution in India. And ELIAP will do all that is needed to enhance AP’s position on the world map and make it the best destination for electronics hardware manufacturing.
EB: Please mention some of the achievements of ELIAP.
Till 2007, electronic hardware was a part of AP’s Ministry of IT&C, and was then shifted to the Industries Department. However, we realised that electronics hardware was not getting its due attention there and decided to take up this issue very aggressively with the state government. With our persuasion, in 2011, the government again shifted electronics hardware back to the Ministry of IT & C. Following our suggestions, the government has declared that an industrial park spread over 300 acres will be started for electronic industries, and a comprehensive policy will be formulated with suggestions from us.
EB: What, according to you, can India do to cut down on electronics imports?
The Central government should give an exemption or tax holiday from excise duty, central sales tax and value added tax, for a period of 10 years for all those electronic hardware items that are manufactured in India. Even though there is an income tax holiday in special economic zones, the minimum alternative tax (MAT) should be abolished and there should be a 100 per cent exemption for a period of 10 years. The government should instruct banks to treat the electronics industry as a priority sector when it comes to financing, and the debt-to-equity ratio should be 4:1, with better lending norms and interest rates. Also, 50 per cent of all Central government purchases should comprise of ‘made in India’ products.
