Following the China model for electronics factory clusters

Last Updated: Wed, Dec 12, 2012 21:41 hrs

To rev up domestic manufacturing of electronics items, the government will start creating manufacturing clusters in the country, on the lines of those present in China and Taiwan.

The clusters would be set up through public-private partnership. The Centre would grant financial assistance of up to Rs 50 crore to companies or state governments for setting up each cluster.

The financial grant would depend on the structure of the project. For new and expanded clusters, assistance would be restricted to 50 per cent and 75 per cent of the total project cost respectively subject to a ceiling of Rs 50 crore per 100 acres, a senior government official said. The government is expected to create at least 50 electronics manufacturing clusters across the country under the scheme in the next five years.

Though, the exact investment by the Centre is yet to be finanlised, it is expected that the government will spend around Rs 2,500 crore to establish the clusters. The scheme called Electronics Manufacturing Clusters (EMCs) is a part of the National Electronics Manufacturing policy approved by the Cabinet in October.

“The government is in the process of finalising the guidelines for the EMC scheme. By January 2013, we will finalise the details and start inviting applications from individual companies as well as state governments,” he added.

Already states such as Andhra Pradesh, Punjab, Rajasthan, Karnataka, West Bengal and Kerala have expressed interests in setting up manufacturing clusters.

Under this scheme, there is a proposal to form special purpose vehicles (SPVs), which would take care of the common infrastructure such as road connectivity, water and power supplies. The SPVs will get financial assistance in the form of grant-in-aid.

Private companies, industry associations, financial institutions, research and development institutions, state or local governments or their agencies and units within the EMC, may promote the SPVs, according to the scheme.

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