Electronics Manufacturing in India

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Rajiv Gauba Additional Secretary, Department of Electronics & Information Technology (DeitY), Ministry of Communications & IT, Government of India

“We are hopeful that the New Electronic Policy announced in the year 2012 will help in promoting indigenous manufacturing of electronic products,” says Rajiv Gauba

Rajiv Gauba is a 1982-batch IAS officer of Jharkhand Cadre.He has more than 25 years of experience in Central and the State Governments, at the District level and in multilateral financial institutions. He has worked in the Ministry of Environment & Forests as Director in- Charge of Policy & Law. He has also worked in the International Monetary Fund for four years. Before becoming the Additional Secretary in the Ministry of Communications & IT, Rajiv Gauba served as the Joint Secretary in the Ministry of Environment & Forests. Here he was looking after the work of Hazardous Substances Management Division and the National River Conservation Directorate

India is doing quite well when it comes to software, but in the hardware sector the picture is not that good. Why is it that the country is not doing well in the area of electronics hardware?What steps can be taken to promote hardware sector in the country? IT industry has been one of the main pillars of India’s growth story. The contribution of this sector to the national GDP and exports has increased significantly. However, the hardware sector has not been able to keep pace accordingly. So for much of our domestic hardware needs, we are dependent on imports. But we are hopeful that the New Electronic Policy approved in 2012 will definitely help in promoting indigenous manufacturing of electronic products. The policy has been framed with the objective of creating an eco-system for globally competitive Electronic System Design and Manufacturing (ESDM) sector in the country. We aim to achieve a turnover of about USD 400 billion by 2020. This will involve investment of about USD 100 billion and it can generate employment for around 28 million people at various levels. It aims to build a strong supply chain of raw materials, parts and electronic components to raise the indigenous availability of these inputs from the present 20-25 per cent to over 60 per cent by 2020.

Please provide us with an overview of the schemes that have been created to promote ESDM sector in the country.
Various Schemes have been put in place and a fast track mechanism has been established to give impetus to the electronics manufacturing sector. Modified Special Incentive Package Scheme (M-SIPS) is one of the important policy initiatives under the National Policy on Electronics 2012 to attract domestic and global investments into the Electronic Systems Design and Manufacturing sector within Electronic Manufacturing Clusters. M-SIPS is basically an investment based scheme under which substantial financial incentives are being provided. It provides for subsidizing of upto 25 percent of capital expenditure if the ESDM unit is in non-SEZ zone and 20 percent of capital expenditure if the ESDM unit is within SEZ. We have set up an Appraisal Committee to ensure that decisions are taken in a proactive and time bound manner. Several projects have already been approved. We have also launched schemes to build infrastructure in Brownfield and Greenfield clusters. The response is very positive and a high level of confidence has been generated in the investors.

China seems to be doing very well in the hardware manufacturing sector? What are the reasons due to which India is not performing that well in this sector?
I won’t regard it as India lagging behind. It is just that India is doing well in certain other areas, like software, for instance. Every country has its competitive advantages and disadvantages, and these can be dependent on a number of factors. China has done very well in the manufacturing sector generally. Likewise we have done exceedingly well in IT software sector. We are taking measures so that we don’t lose our pre-eminent position. At the same time, we need to focus on the hardware sector and I am hopeful that in the near future we will be able to improve and enhance indigenous production of hardware products.

Tell us about the Electronics Manufacturing Cluster (EMC) scheme that has been started by the government. What kind of response is this scheme having? The Electronics Manufacturing Cluster (EMC) Scheme to support creation of world-class infrastructure for attracting investments in the Electronics Systems Design and Manufacturing (ESDM) Sector was notified in October 2012 and the guidelines for operationlization of EMC Scheme were issued in April 2013. EMC scheme aims to encourage manufacturing of specific high priority electronic product lines in India by providing capital grant for creation of electronic manufacturing clusters. The scheme is open for receiving applications for a period of five years from the date of notification. The assistance for the projects in Greenfield Electronics Manufacturing Clusters is up to 50 percent of the project cost subject to a ceiling of `50 crores for every 100 acres of land. For larger areas, pro-rata ceiling applies. Till now DeitY has received 11 applications for setting up of Green field Electronics Manufacturing Clusters (EMCs) involving an overall area of around 2800 acres with a proposed investment of over `3700 crores.

We need to promote the use of mobile platform to expand the reach of government services to the citizens in a seamless and convenient manner

Today most of the Semiconductor Wafer Fabrication units are located in China. Do you think India can develop its own Semiconductor Wafer Fabrication network in the near future, given the fact that such units require lot of investment and knowledge of latest technology? Recently Government has approved setting up of two Semiconductor Wafer Fabrication (FAB) Manufacturing Facilities in the country. These FAB facilities are expected to provide a big boost to the Electronics System Design and Manufacturing eco-system in the country. The two facilities at Greater Noida and Prantij, near Gandhinagar in Gujarat have projected investment of around Rs. 25,000 crores each. The Government has also approved a package of incentives for the two consortia which will put up these facilities. The Semiconductor Wafer Fabrication Units will stimulate the flow of capital and technology, create employment opportunities, help higher value addition in the electronic products manufactured in the country, reduce dependence on imports and lead to innovation. There will be direct employment of about 22,000 and indirect employment of about one lakh persons.

Tell us about the initiatives that have been taken by DeitY to enhance mobile governance in the country.
DeitY has sensitised the Central Ministries, State Government and other agencies to the fact that the reach of e-Governance will remain limited unless one uses the ubiquitous availability of mobile phones. We need to use mobile platform to provide government services to the citizens in a seamless and convenient manner. It can play a vital role as mobile penetration is very high in our country as compared to traditional computing devices like tablets and laptops. We have set up the Mobile Services Delivery Gateway through C-DAC. We act as an enabler for various Central Ministries and Departments in Centre and State Governments that are planning to provide citizen services through mobiles. We are also providing assistance to various Mission Mode Projects. The development of m-Governance in the country requires a number of complementary steps – first of all we need to create awareness among the stakeholders, then we need to provide them the required gateway and finally we have to give them assistance in making their application mobile compliant. Rather than creating a parallel system, the objective is to create a holistic system which is citizen centric so that all services can be accessed through a common number.

Government has also launched various mobile apps to deliver e-Governance services to the citizens. What kind of responses are you getting from such initiatives?
Recently the Government of India has launched the initiative of establishing the eGov App Store. It is a national level common repository of customizable and configurable applications that can be re-used by various government agencies at Centre and States without investing effort in development of such applications. The whole idea of app store is that different agencies in government do not duplicate their efforts. It will help in optimizing government resources and public money. The objective is to bring applications which are tested and proven on a single platform so that these can be used across the country. This eGov App store will now be augmented to include applications and components developed by various departments and agencies at Centre and States and also by private players; and a complete eco-system will be established (including mechanism for funding, charge back, contract management, SLAs) and will become a part of the GI Cloud initiative under Government of India.

What steps are taken by DeitY to ensure that all the available infrastructure and resources are being effectively utilised by various Government Department?
State Data Centres and State Wide Area Networks (SWAN) are important elements of the core infrastructure, created under NeGP. However, several e-Governance initiatives had commenced even before. Consequently, separate infrastructures have also been created. Moving towards an integrated national core infrastructure is important to enhance effective service delivery particularly in the context of the ambition to exponentially expand Electronic Service delivery at State, Municipal and Panchayat level. We are commencing implementation of the recommendations of the Task Force on Cloud Computing. DeitY is also working to examine various aspects of the next generation National Information Infrastructure (NII 2.0).

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