MeitY may clear investment plans worth Rs 29,500 crore in next few months

Source: The Economic Times, Feb 24, 2017

NEW DELHI: The Ministry of Electronics & IT (MeitY) is expected to approve fresh investment proposals worth Rs 29,500 crore under the Make in India programme within the next four-to-five month period, a top government official told ET.

The electronics department is currently accessing offers from as many as 80 firms. Entailing a total spend of nearly . Rs 1.32 lakh crore, 72 mobile and component manufacturing facilities have already started their operations in the country under the domestic production initiative.

“79 proposals worth . Rs 15,700 crore investment are likely to be cleared in the next 4 to 5 months while 54 with a spend of . Rs 7,095 crore are in the initial phase of evaluation,” MeitY additional secretary Ajay Kumar said, adding that further two more investment plans of more than $1 billion (. Rs 6,700 crore) were under consideration.

The new proposals, according to the official, are under the initial phase of assessment as the project location and financial tie-ups as well as technology partnerships are yet to accomplish.

The Narendra Modi-led NDA government is heavily banking on investments from multinationals to accelerate local manufacturing with an aim to cut import to net zero by 2020.

During the 2015-16 fiscal, 110 million mobile handset units with a total value of . Rs 54,000 crore were manufactured locally from . Rs 18,900 crore in 2014-15. The government is expecting to nearly double the mobile production value to surpass . Rs 90, 000 crore this year.The data released by the government suggests the mobile industry’s contribution to the country’s GDP stands at 6.5%, or $140 billion, which is likely to reach to 8.2% by 2020.

The department, in order to broaden the horizon, has allowed 30 mobile component makers for adapters, chargers, battery packs and wired headsets production which has generated new direct employment for 20,000 individuals, said Kumar.

The MeitY is also aggressively eyeing at ‘marquee’ investments, which could also simultaneously attract the entire product value chain to fuel domestic manufacturing.

The department is keen to bring in Tim Cook-led smartphone giant Apple which has sought certain fiscal concessions that include customs duty waiver on import of components to make a profitable preposition to locally manufacture iPhones.

In the Union Budget 2017-18, finance minister Arun Jaitley proposed a 2% special additional duty from 0% on populated printed circuit boards (PCB) used to manufacture mobile phones locally, which according to analysts, would hurt the Make in India initiative.

The mobile companies have, however, hit a pause button on new investment plans in the country as the existing duty regime which makes local production compelling looks uncertain to them with the proposed GST (Goods and Service Tax) kicking in from July 1

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