With a view to boost electronics manufacturing, the government extended the MSIPS (Modified Special Incentive Package Scheme) by 5 years. The government also expanded its scope, in order to cover 15 new product categories.
This decision basically aims at promoting ‘Digital India’ and ‘Make in India’ initiatives. By 2020, the demand for electronics is expected to reach upto USD 400 billion in India. The electronics sector further has the potential to attract an investment of USD 100 billion as well as provide jobs to almost 28 million people.
The 15 new product categories that are included in the scheme are: consumer appliances (such as refrigerators, air conditioners, washing machines and the like), smart cards, optical fibers, Internet of Things (IoT), electronic product design and various other products.
Under the MSIPS scheme, the Indian government has also made it easier for various companies to get incentives.
According to sources, the extension of scheme is for a period of 5 years, i.e. beyond July 26, 2015.
Originally, the scheme was approved by in July 2012. It provides capital subsidy of 25% in non-SEZ units and 20% in SEZ that are engaged in manufacturing the electronics items. Basically, the original scheme was for a period of 3 years that is now extended to 5 years.
Initially, only 10 units were approved, by May 2014. According to sources, 32 proposals have been approved which would generate indirect employment for 40,000 people and direct employment for over 12,000 deserving candidates.