Context

The Union Cabinet has approved financial assistance to the Modified Electronics Manufacturing Clusters (EMC2.0) Scheme which would support setting up of both Electronics Manufacturing Clusters (EMCs) and Common Facility Centres (CFCs).

About

• The Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme would support setting up of both Electronics Manufacturing Clusters (EMCs) and Common Facility Centers (CFCs).
• For the purpose of this Scheme, an Electronics Manufacturing Cluster (EMC) would set up in geographical areas of certain minimum extent, preferably contiguous, where the focus is on development of basic infrastructure, amenities and other common facilities for the ESDM units.
• For Common Facility Centre (CFC), there should be a significant number of existing ESDM units located in the area and the focus is on upgrading common technical infrastructure and providing common facilities for the ESDM units in such EMCs, Industrial Areas/Parks/industrial corridors.
• The total outlay of the EMC 2.0 Scheme is Rs 3,762.25 crore, which includes the financial assistance of Rs 3,725 crore and administrative and management expense to the tune of Rs 37.25 crore over a period of eight years.

Background:

• Ministry of Electronics and Information Technology (MeitY) notified Electronics Manufacturing Clusters (EMC) Scheme to build and create requisite infrastructure ecosystem for electronics manufacturing; which was open for receipt of applications upto October, 2017.
• A period of 5 years (i.e. upto October, 2022) is available for disbursement of funds for the approved projects.
• Under EMC scheme, 20 Greenfield EMCs and 3 Common Facility Centres (CFCs) measuring an area of 3565 acres with project cost of Rs. 3898 crore including Government Grant-in-aid of Rs. 1577 crore have been approved in 15 states across the country.

India’s electronic production:

• India's electronics production has increased from Rs 1,90,366 crore (US$29 billion) in 2014-15 to Rs 4,58,006 (US$ 70 billion) in 2018-19, at a compound annual growth rate (CAGR) of about 25 per cent.
• India's share in global electronics manufacturing grew from 1.3 per cent (2012) to 3 per cent (2018). It accounts for 2.3 per cent of India's GDP at present.
• There is a need for continuation of such scheme in modified form to further strengthen infrastructure base for the electronics industry in the country and deepen electronics value chain.

Significance of the move:

• The EMCs will:
  • aid the growth of the ESDM sector
  • help the development of the entrepreneurial ecosystem
  • drive innovation
  • catalyse the economic growth of the region by attracting investments in the sector
• The scheme will create a robust infrastructure base for the electronic industry to attract the flow of investment in the ESDM sector and lead to greater employment opportunities.
• The scheme is expected to ensure the availability of ready infrastructure and plug and play facility for attracting investment in the electronics sector.
• This new policy also advances the National Policy for Electronics (NPE), 2019 to make India a global hub for mobile and component manufacturing.