DoE drafts policy paper on electronic cities
OUR BUREAU
BANGALORE, January 22: The Department of Electronics (DoE) has drafted a policy paper for the setting up of ``clusters'' or electronic cities across the country. These clusters will be specifically for the electronics industry and will have inbuilt infrastructural facilities and vertically and horizontally integrated electronic companies functioning within a defined area. This concept is similar to the Silicon Valley in California and similar colonies in Taiwan, China and France.A fiscal package has been submitted to the Export Promotion Board and a feasibility study will be commissioned shortly, to identify the states that are suitable for this arrangement according to Shyamal Ghosh, secretary, DoE.Ghosh was delivering the inaugural address at Componex '98, a three-day conference on ``Investment and Business Opportunities in Electronic Components in India'' here on Thursday. The conference has been organised by the Eletronics Today magazine and sponsored by DoE. He further said that there is an urgent
need to amend direct tax laws and land acquisition procedures in order to facilitate these clusters. He also called for a review of the fiscal policy measures pertaining to the electronic component industry. Action can only be taken on this draft after a new government comes into power at the Centre he added. In his presidential address, K P P Nambiar, former secretary, DoE and chairman Namtech Group, suggested several revisions in the electronics component policy in order to increase indigenisation and improve the cost structure. He recommended a viable duty structure which is graded correctly. A reduction in the excise duty on consumer electronics products, production of electronic components, computers, telecommunication equipment, CTVs and other audio visual products in the country should continue for a period of five years. The revenue loss incurred by the Centre in reducing excise on components and equipment in the country would be more than made up by an increase in import duty on electronic
equipment, he added. In his address, Inderdeep Singh, president, Electronics Materials Industries Association (Elmina), said that the electronics component industry has received step-motherly treatment compared to the auto component industry that has blossomed in the post-liberalisation era. He said that the auto policy has in-built features that forced both Indian and foreign automobile manufacturers to source components from within the country. A similar situation has not been created for electronics, since import duties for electronic components were 25 per cent compared to 45 per cent for auto components while there was no difference in the import duty on the end products. Moreover, automobile manufacturers have only a five year indigenisation period with no such norm being applicable to the electronic component industry. Electronics manufacturers have no incentive to purchase locally he added. Component manufacturers have made several representations to the DoE for simplification of policy
procedures and reduce the excise duty on components in the order to nip the grey market that is flourishing in the industry.Componex '98 also includes an exhibition of electronics components which has over 150 participants from India and abroad.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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