Modified Special Incentive Package Scheme (M-SIPS)
The Cabinet had, in 2012 approved the M-SIPS to provide a special incentive package to promote large scale manufacturing in the Electronic System Design and Manufacturing (ESDM) sector.
The scheme provides subsidy for capital expenditure - 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs.
The Scheme was amended in 2015 for scope enhancement and simplification of procedure.
The Scheme has attracted investments in the ESDM. The M-SIPS has been able to create positive impact on investment in electronics sector.
The main features of M-SIPS are as follows:
The scheme provides subsidy for investments in capital expenditure - 20% for investments in SEZs and 25% in non-SEZs. It also provides for reimbursement of CVD/excise for capital equipment for the non-SEZ units. For high technology and high capital investment units, like fabs, reimbursement of central taxes and duties is also provided.
The incentives are available for investments made in a project within a period of 10 years from the date of approval.
The incentives are available for 29 categories of ESDM products including telecom, IT hardware, consumer electronics, medical electronics, automotive electronics, solar photovoltaic, LEDs, LCDs, strategic electronics, avionics, industrial electronics, nano-electronics, semiconductor chips and chip components, other electronic components and EMS. Units across the value chain starting from raw materials including assembly, testing, packaging and accessories of these category of products are included. The scheme also provides incentives for relocation of units from abroad.
The Union Cabinet has given its approval for amendment in the Modified Special Incentive Package Scheme (M-SIPS) to further incentivize investments in Electronic Sector and moving towards the goal of ‘Net Zero imports’ in electronics by 2020.
Benefits: Besides expediting investments into the Electronics System Design and Manufacturing (ESDM) sector in India, the amendments in M-SIPS are expected to create employment opportunities and reduce dependence on imports.
The salient features of the amendment are:
The applications will be received under the scheme upto 31st December 2018 or till such time that an incentive commitment of Rs 10,000 crore is reached, whichever is earlier. In case the incentive commitment of Rs 10,000 crore is reached, a review will be held to decide further financial commitments.
The incentives will be available for investments made within 5 years from the date of approval of the project.
A unit receiving incentives under the scheme, will provide an undertaking to remain in commercial production for a period of at least 3 years.
A separate Committee headed by Cabinet Secretary and comprising of CEO, NITI Aayog, Secretary Expenditure and Secretary, MeitY will be set up in respect of mega projects, envisaging more than Rs. 6850 crores (approx. USD 1 Billion) investments.
The Policy covers all States and Districts and provides them an opportunity to attract investments in electronics manufacturing.