“2013 beckons ESDM sector to make India its new home”

Dr. Ajay Kumarjoint secretary, DeitY

Dr. Ajay Kumar
joint secretary, DeitY

With more and more people coming to know about the new policies for ESDM, there is sense of excitement and expectation. Several companies/people have told me they are planning to take advantage of the policies. Some thoughts on how the Modified SIPS and Electronics Manufacturing Clusters scheme can be made maximum use of.

First the EMC scheme: Undeveloped SEZs could be developed in Electronic Manufacturing Clusters (EMCs); specific sectors like LED or medical electronics could develop sector specific EMCs; Avionics EMC could be developed around airports with MRO and other related facilities.

Sector specific EMC could plan to provide for common tooling, testing facilities, training facility, warehousing facility, etc., which could make the units within the cluster more competitive. Alternative source of electric transmission to provide greater reliability of power to units could be considered. Country specific clusters could be thought of like a Taiwan village, a Japanese village or a Korean village.

A country specific EMC could plan civic amenities like clubs, restaurants, karaoke, etc., which creates a home away from home for their nationals working in these companies.

The most important thing would be the USP of the EMC which makes the EMC different from a typical industrial estate. It is not essential for a SPV to be made before an application under the EMC scheme can be made. A Chief Promoter can initiate action and form the SPV in due course.

Similarly, under Modified SIPS, there is potential to maximize the benefit under the scheme by planning their investments for the next ten years and getting approval of the ten year project. They do not have to produce financial closure for the whole project.

The guidelines provide that financial closure be furnished only for a part of the project. However, by providing investment plan for ten years enables the companies to claim incentives under the scheme for ten years once their whole project is approved. There are reports of several companies are to close down their units due to unviable operations. Modified SIPS allows relocation of units and such companies should invariably explore whether the units become viable if relocated. 2012 has been a very eventful year for the ESDM sector.

As a fitting finale to this year, the Prime Minister, during his inaugural address at the India Telecom 2012, emphasized the need for reversing the thinning trend in telecom and electronics manufacturing. 2013 beckons ESDM sector to make India its new home. I join all readers in welcoming 2013 and the new opportunities in the ESDM sector.

Dr. Ajay Kumar is also the chief editor of DietY’s electronic e-newsletter from where this article has been extracted.

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