In a bid to give boost to domestic semiconductor manufacturing, Finance Minister P Chidambaram said that a company which will invest “Rs 100 crore or more in plant and machinery across sectors during the period 1-4-2013 to 31-3-2015 will be entitled to deduct an investment allowance of 15 per cent of the investment.”
Electronics chip makers in the country have a reason to rejoice. The government has showered incentives for the electronics chip maker plants in India. Finance Minister P Chidambaram has announced “zero custom duty for plant and machinery” required to set up a semiconductor (electronics chip) plant in the country. This will not only give a boost to domestic manufacturing opportunities but also provide job opportunities for design engineers in India.
While presenting the Budget for 2013-14 in the Parliament, Chidambaram said, “The electronics policy 2012 is intended to promote manufacture of electronic goods in India. We recognise the pivotal role of semiconductor wafer fabs in the ecosystem of manufacture of electronics.
I propose to provide appropriate incentives to semiconductor wafer manufacturing facility including zero custom duty for plant and machinery.”
In a bid to give boost to domestic semiconductor manufacturing, the minister said that a company which will invest “Rs 100 crore or more in plant and machinery across sectors during the period 1-4-2013 to 31-3-2015 will be entitled to deduct an investment allowance of 15 per cent of the investment.”
It is worth mentioning here that the government is looking forward to attract investment worth Rs 25,000 crore in the electronics sector. This investment will be a result of setting up of 100 units in 10 manufacturing clusters coming up across the country this year. Chidambaram said, “the investment allowance will be in addition to current rate of depreciation and “there will enormous spill over benefit to small and medium enterprises.”
The Indian semiconductor industry is happy about the announcement. Welcoming the decision, Siddharth Mohanty, managing director, Lattice Semiconductor, said, “It is a very positive development and it will encourage local manufacturing in a big way. This will be the first step for us to develop the much-required eco-system in the country. It will not only give boost to manufacturing but also design of equipment and system. Products using electronics chips will also be benefited from the move.”
The India Electronics and Semiconductor Association (IESA) has also given a thumbs-up to the budget for giving a boost to Indian electronics and semiconductor industry. The organisation believes that the the steps outlined for this sector will help to boost this sector by attracting investments, promoting entrepreneurship and domestic manufacturing,
PVG Menon, President, IESA, said, “The investment allowance of 15 per cent in addition to the current depreciation benefits will significantly aid in attracting investments into this sector.” Appreciating the zero per cent customs duty for import of equipment for the fab, IESA said that this will help in improving the viability of the project for the investors.
It is noteworthy that the budget also provided for setting up of Rs 200 crore fund to help innovators and inventors. Menon opined that such a fund will help scale up their inventions and develop products aimed for the masses.
By Diksha P Gupta, EFYTIMES News Network
