The Union cabinet has approved Rs 76000 crore for a programme for development of semiconductors in India to overcome the shortage of semiconductors and chips and reduce the country's dependence on the foreign countries.

According to a statement by the government, the project will have a multiplier effect across different sectors and will help in deeper integration to the global value chain.

It would contribute significantly towards achieving USD 5 trillion dollar economy and USD 5 trillion GDP (gross domestic product) by 2025.

Elaborating on the scheme, Union minister for Telecom and Information Technology (IT) Ashwini Vaishnaw said, "Prime Minister Narendra Modi has taken a historic decision in the field of Electronics in which the development of a complete ecosystem could take place within the country including design, fabrication, testing and packaging. It would take the investment of Rs 76,000 crore. Today we have reached USD75 billion in electronics manufacturing in 7 years. With the pace that we are moving at, in the next 6 years, we will reach USD300 billion in electronics manufacturing."

Telecom Minister Ashwini Vaishnaw said that the government will provide incentives of Rs 2,30,000 crore to position India as a global hub for electronics manufacturing with semiconductors as the foundational building block.

“The programme will usher in a new era in electronics manufacturing by providing a globally competitive incentive package to companies in semiconductors and display manufacturing as well as design. This shall pave the way for India’s technological leadership in these areas of strategic importance and economic self-reliance,” said the minister.

Vaishnaw said for any country to be a leader, it should handle semiconductors manufacturing. He said, “Semiconductors and displays are the foundation of modern electronics driving the next phase of digital transformation under Industry 4.0.”

“The approved programme will propel innovation and build domestic capacities to ensure the digital sovereignty of India. It will also create highly skilled employment opportunities to harness the demographic dividend of the country. Development of semiconductor and display ecosystem will have a multiplier effect across different sectors of the economy with deeper integration to the global value chain,” said a cabinet statement.

Under the approved scheme, the incentive support will be provided to companies which are engaged in silicon semiconductor fabs, display fabs, compound semiconductors and semiconductor design.

The minister said like the major economies of the world, India too will provide fiscal support of up to 50 per cent of project cost on pari-passu basis to applicants who are found eligible and have the technology as well as capacity to execute such highly capital intensive and resource incentive projects.

Under this programme, the government will establish high-tech clusters with requisite infrastructure in terms of land, semiconductor grade water, high quality power, logistics and research ecosystem to approve applications.

The other components of the scheme include setting up of semiconductor laboratory, promote semiconductor design companies and setting up of a semiconductor mission to develop sustainable semiconductors and display ecosystem.

Apart from this union I&B minister said that Cabinet has approved reimbursement of Rs 1,300 crore on digital transactions using UPI and Rupay debit cards.

"A scheme has been approved to provide incentives to encourage digital transactions through RuPay Debit Card and BHIM UPI of small amounts. It will incur an expense of around Rs 1,300 crore," Thakur said.

Image Credit: One India