Electronics industry seeks funds, sops to fuel growth
Tuesday, 02 February 2010, 17:14 IST
Printer Print Email Email
Bangalore: The fledgling Indian electronics industry Monday sought funds, tax rationalisation and interest linked subsidy for promoting the electronics system design and manufacturing ecosystem in the country. "The government has to catalyse the growth of the electronics industry through a slew of fiscal and policy measures. Separate funds to incentivise research and development (R&D) and promote value added manufacturing have to be created," a sub-committee of task force said in its recommendations. The recommendations include stable tax structure to encourage long-term investments, skill development, regulations on over-time and flexibility in contracts, creation of clusters and setting up of a 'National Electronics Mission' as a nodal agency in the IT department with direct access to the prime minister's office. "The recommendations have to be implemented in a time-bound manner if the electronics industry has to contribute more to the country's GDP (gross domestic product), generate jobs, modernise processes and facilitate inclusive growth," Indian Semiconductor Association (ISA) chairman B.V. Naidu told reporters here. Though domestic production is less than 45 percent, consumption is projected to grow by 22 percent CAGR (cumulative average growth rate) up to 2020 due to surge in income levels, aspiration for electronic goods, demand from a resurgent corporate sector and the government's focus on e-governance. "As the Indian electronics industry is at the cusp of an exponential growth and opportunity, there is an urgent need for the government to have the right policies and a regulatory environment to create full-fledged electronic systems and a design and manufacturing ecosystem," Naidu said on the margins of a two-day ISA summit. The demand for electronics products and services in the Indian market is projected to grow to $125 billion by 2014 from $45 billion in 2009 and touch $400 billion by 2020. Similarly, exports are expected to nearly quadruple to $15 billion by 2014 from $4 billion in 2009 and to $80 billion by 2020. According to the leading audit firm Ernst & Young report, the global electronics market is projected to reach $2 trillion by 2014 and $2.4 trillion by 2020 from $1.75 trillion in 2009. If the recommendations are implemented, the human capital intensive industry will be able to generate about 16 million jobs by 2014 as against 4.4 million in 2009 and 27.8 million by 2020. With high potential for domestic value addition in semiconductor design and electronics system or product design, the industry can accelerate e-governance, development schemes and the various government initiatives in education, healthcare and energy efficiency and rural employment with a combined budget of $45 billion.
Source: IANS
siliconindia