Electronics Manufacturing Clusters (EMCs) Scheme

In 2012, the Union Cabinet has approved the scheme for the development of Electronics Manufacturing Clusters (EMCs). Proposed scheme would support setting up of both Greenfield and Brownfield clusters. EMCs would aid growth of the Electronics Systems Design and Manufacturing (ESDM) sector, help development of entrepreneurial ecosystem, drive innovation and catalyse the economic growth of the region by increasing employment opportunities and tax revenues. Some points:

• Computer and mobile handsets manufacturing can benefit from this scheme because this will make components available locally. These companies are currently importing components from countries such as China and Taiwan.
• Scheme will help flow of investment for development of world-class infrastructure specifically targeted towards attracting investment in the ESDM sector.
• The scheme would help in increasing the flexibility and robustness of the electronic manufacturing ecosystem. It will lead to innovation and entrepreneurial ecosystem. Thus in the long term, it would give a fillip to growth and development, and employment generation in the ESDM sector.
• The scheme does not distinguish between Indian and foreign investors.
• The special purpose vehicles (SPV) would be eligible for financial support. The SPV may be promoted by private companies, industry associations, financial institutions, research and development institutions, State or Local governments or their agencies and units within the EMC. The financial assistance to the SPV would be in the form of grant-in-aid only.
• For Greenfield clusters, assistance would be restricted to 50 per cent of the project cost subject to a ceiling of Rs 50 crore for every 100 acres. For Brownfield clusters, the assistance would be restricted to 75 per cent of the project cost subject to a ceiling of Rs 50 crore.

The scheme would be open for applications for five years from the date of notification. Financial assistance under the policy would be subject to approval by the Competent Authority following due process. The draft policy aims to achieve a turnover of about Rs 22 lakh crore ($400 billion) by 2020 and employment to around 28 million people at various levels.