The Union Cabinet is likely to soon extend the modified special incentive package scheme (MSIPS) that expires this month and include new products such as LED bulbs, solar cells and smart cards under it.
“A proposal to include new products could not be taken up last year due to lack of clarity on proposed amendments. The draft was sent for further clarification from ministry of communications and information technology, law and commerce and industry,” sources in the government said.
MSIPS, which was introduced in 2012, offers reimbursement on central taxes and duties for a few very high technology and capital intensive products such as semiconductor chips.
The scheme is aimed to creating an indigenous manufacturing eco-system for electronic products in India.
The recent draft note, viewed by this correspondent, aims to extend the MSIPS for another five years to achieve the net zero import by 2020. It also aims to promote large-scale manufacturing in the electronic system design and manufacturing (ESDM) sector in India as part of Digital India and Make in India programmes.
A senior government official said, that in the last 14 months, 32 proposals that will generate a total of 42,000 jobs and involve investments of nearly Rs 9,000 crore have been approved and the investments were underway.
Government estimates that by 2020, the size of the Indian electronics market will reach $400 billion (about Rs 25.5 lakh crore).