New Delhi: To boost manufacturing of electronics items, the government on Tuesday extended the 'Modified Special Incentive Package Scheme' (MSIPS) by five years and also expanded the scope of the programme to cover 15 new product categories.
The decision was taken at the meeting of the Cabinet headed by Prime Minister Narendra Modi this evening to promote 'Make In India' and 'Digital India' initiatives, sources said.
The demand for electronics in India is expected to reach USD 400 billion by 2020. The electronics sector has the potential to attract USD 100 billion investment and provide jobs to 28 million people.
The 15 new product categories included in the MSIPS are: smart cards, consumer appliances (like washing machines, refrigerators, air conditioners), electronic product design, optical fibres and Internet of Things (IoT) products, among others.
The government has also made it easier for companies to receive incentives under the MSIPS scheme.
"The scheme has been extended for a period of five years beyond July 26, 2015. The extension of MSIPS scheme is a big boost towards making India a global destination for electronics manufacturing," sources said.
The scheme was originally approved by the government in July 2012. It provides capital subsidy of 20 percent in SEZ or 25 percent in non-SEZ units engaged in manufacturing of electronics items. The original scheme was for three years.
Initially the scheme evoked lukewarm response and by May 2014, only 10 units involving investment of Rs 1,369 crore were approved.
Under the Digital India and Make in India programmes, the MSIPS has attained a "renewed vigour", source said adding in the last 14 months, 32 proposal involving investment of nearly Rs 9,000 crore which would generate direct employment for nearly 12,000 people and indirect employment for 40,000 people have been approved and investments are underway.