Budget Reaction: IESA

India Electronics and Semiconductor Association (IESA) welcome the budget aimed at boosting the Indian Electronics and semiconductor industry. The budget is growth supportive, anti-inflationary as well as committed to fiscal consolidation and reviving growth in manufacturing. We believe the steps outlined for this sector by the Finance Minister and commitment from the industry will put India is on the journey of becoming the “Design Led Electronics Manufacturing hub” by attracting investments, promoting entrepreneurship and creation of jobs. The speed and focus of the Minister for Communication & IT and DeitY in capturing industry needs from the electronics sector is very heartening and is a major milestone towards vision of making India an ESDM powerhouse.

 
1.      Manufacturing incentives at 15% for extended period of 3 years for manufacturing company that invests more than 25 crore plus would create massive push to the MSME’s in electronic sector. This will lead to the inclusive growth of the electronic manufacturing clusters coming up in the seven states, setting up of electronics units, investment/employment opportunities in the non-urban parts of India and help build component eco-system.

2.      Corrections of Inverted duty structure on few ITA-1 products such as TV’s Computers, Smart cards etc. and  levy of 10% Basic Customs Duty on some of the Non—ITA 1 Telecom products aimed at making locally made products competitive, will boost manufacturing greatly.

3.      Rs 10,000 crore Start-up fund with allow greater incentivization to R&D and Incubation centers that will spur the local IP development and product creation which constitutes almost 50% value addition for electronic products. Extended support of the government to the companies helping to create value by Innovation Led Designs in the ESDM ecosystem is commendable.

4.      Support in the form of Investment Linked Deductions for Semiconductor wafer manufacturing units would help build the Semiconductor Fabs and ATMP units’ cohesive ecosystem potentially contributing to more than 40,000 crore FDI’s and job creations.

5.      FDI in Defense sector is a huge step enabling local defense electronics manufacturing and competencies while attaining self-reliance as well as maintaining National Security Funds of Rs 5,000 crore allocated for
defense outlay will give a boost to the modernization of the Aerospace and Defense sector.

6.      We welcome Rs 500 crore funds for the Digital India program. This program’s focus on IT access to villages and broadband connectivity will provide the access to technology solutions, education and trainings through digital platforms thereby bringing the rural areas at par with urban ones.

7.      Addressing Transfer Pricing issue will help global companies to invest more in India and also contribute to the innovations and competence development in the ESDM sector will contribute to ease of doing business,
innovation & competence development in ESDM sector.

8.      Additional announcements such as Smart cities, Power to each household through effective distribution, industrial clusters will help  ESDM industry achieve great heights by developing technology solutions for these initiatives.

9.      We would like to see provision of ‘Deemed Export Status’ for electronic products manufactured in India to be considered by Government in future and corrections of Inverted duty structure being applied on all ITA-1
products.

 -- Ashok Chandak, chairman, India Electronics and Semiconductor Association (IESA)