In today’s world it is virtually next to impossible to put a full-stop in the usage of electronics goods like mobile phones, computers and so on. With the rapid boom in the industries like- Telecom; IT and Software; Health Care; Automobile or many others, the demand for electronics good and the whole of the sector just keeps increasing. Various factors like disposable income, technology friendly people, increasing demand towards advanced technology (like 3G, 4G)to speed up with the rest of the world have paved the way for ESDM (Electronic System Design and Manufacturing) sector to have a speedy growth. This ever increasing demand for Indian electronics market is expected to reach $ 400 billion by the year 2020.
In this regard, the central government plans to cater both domestic as well as the global market by turning India into a global hub for ESDM as envisioned in the National Electronics Policy 2012. The state government of Uttar Pradesh has articulated its vision of playing a significant role in GoI’s agenda towards making India the centre of ESDM. Therefore they have launched their Electronics and Manufacturing Policy in 2014.
- To establish Electronic Manufacturing Clusters in the state.
- To capitalize on the upcoming FAB unit in order to attract maximum investment in Electronics Manufacturing sector.
- Increase Gross Domestic Product (GDP) of the state.
Fiscal incentives for ESDM units under this policy:
- A capital subsidy of 15 % is provided on fixed capital to ESDM units with a maximum amount of ₹ 50 million.
- Subsidy is provided only to the companies operating in EMCs (Electromagnetic compatibility) and their capital is evaluated by the banks or financial institutions. However, this subsidy is provided to the first 10 companies on the basis of their date of commercial operation.
The units get an annual interest subsidy of 5% on the loans they have obtained from banks/financial institutions. Maximum amount is of ₹ 1 crore per unit with the amount has to be repaid within 7 years.
Stamp duty concession-
ESDM units are exempted from stamp duty by 100% on purchase/lease of new land.
Incentives on filing patents-
Reimbursement of up to 50% of actual filing costs with a maximum of ₹ 1 lakh for domestic and ₹ 5 lakh for international patents applicable for MSME units.
100% tax reimbursement on VAT (Value Added Tax) and SCT (Central Sales Tax) for up to 10 years.
Other incentives for EMC units:
Provisions of Land-
25% of concession on the purchase of land from state agencies is provided to either EC SPV or to the companies within the EMCs.
Industrial promotion subsidy-
This interest subsidy (which is equivalent to 50% of the incentives available to the new units) is provided to the existing units. However, this subsidy is only provided if capital investment for enhancing capacity of the existing units is made within 3 years of period.
There are other benefits also that are provided to the units like uninterrupted power supply, Single Window Clearance System, developing the infrastructure etc.
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