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Union Cabinet okays new National Electronics Policy

Wednesday, 20 Feb 2019
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The Union cabinet sanctioned approval for the National Electronics Policy 2019 aimed at achieving a turnover of USD 400 billion (about Rs 26 lakh crore) for the electronics system design and manufacturing (ESDM) sector by 2025. The policy aims to generate employment opportunities for one crore people.

The policy will enable flow of investment and technology, leading to higher value addition in the domestically manufactured electronic products and increased manufacturing of electronics hardware for local use as well as exports.

The policy has introduced easier to implement incentive schemes, including an interest subvention scheme and credit default guarantee, to replace some of the existing ones under the National Electronics Policy 2012. It proposes to provide interest subsidy of four percent on loans up to Rs 1,000 crore on plant and machinery.

In case of larger loans, the subsidy will be limited to Rs 1,000 crore. The government intends to create a fund to provide default guarantee of up to 75 percent to banks for plant and machine loans of up to Rs 100 crore. This will eliminate the need for small and new investors to provide third-party collateral.

The scheme will be on the pattern of credit guarantee being provided by SIDBI for the SME sector which will be launched once the policy is notified.

To help create an ecosystem, the policy has pitched for 2.0 version of the Electronics Manufacturing Cluster Scheme, under which infrastructure support will be provided for a group of industries that are part of the product supply chain rather than individual industries. It has also proposed a sovereign patent fund to acquire intellectual property for chips and chip components.

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