Modified Special Incentive Package Scheme Current Affairs

Union Cabinet approves amendment in Modified Special Incentive Package Scheme

The Union Cabinet has given its approval for amendment in the Modified Special Incentive Package Scheme (M-SIPS) for electronics manufacturing.

These modifications will further incentivize investments in electronic sector and move towards Union Government’s goal of ‘Net Zero imports’ in electronics by 2020. 

Key Amendment
  • The applications will be received under M-SIPS scheme till December 2018 or till such time that an incentive commitment of Rs 10,000 crore is reached, whichever is earlier.
  • In case the incentive commitment of Rs 10,000 crore is reached, a review will be held to decide further financial commitments.
  • For new approvals, the incentive under the scheme will be available from the date of approval of a project and not from the date of receipt of application.
  • The incentives will be available for investments made within 5 years from the date of approval of the project. Unit receiving incentive will provide undertaking to remain in commercial production for at least 3 years.
  • The Appraisal Committee chaired by Secretary, Ministry of Electronics and IT will recommend approval of project.
Significance of amendment in M-SIPS
  • Expedite investments into the Electronics System Design and Manufacturing (ESDM) sector in India.
  • Create employment opportunities and reduce dependence on imports. 

About Modified Special Incentive Package Scheme (M-SIPS)

  • The Union Cabinet in 2012 approved the M-SIPS to provide a special incentive package to promote large scale manufacturing in the ESDM sector to boost domestic electronic product manufacturing in the country.
  • The scheme provides subsidy for capital expenditure 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs.
  • It also provides reimbursement of countervailing duty/excise for capital equipment for non-SEZ units and also reimbursement of duties and central taxes for some of the projects with high capital investments.

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