UPSC MAINS 2019: Cabinet approves new National Electronics Policy

Cabinet approves new National Electronics Policy

 

Topic: Cabinet approves new National Electronics Policy

Topic in Syllabus: General Studies Paper 2 : Indian Governance

 

Cabinet approves new National Electronics Policy

Why in in news?

The Union Cabinet recently approved the National Electronics Policy 2019 aimed at achieving a turnover of $400 billion (about ₹26 lakh crore) for the electronics system design and manufacturing (ESDM) sector by 2025, while generating employment opportunities for one crore people.

 

More about on news:

  • The new pension scheme, Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM), announced in the interim budget for unorganised workers has now been rolled out
  • The policy will enable flow of investment and technology, leading to higher value addition in the domestically manufactured electronic products and increased manufacturing of electronics hardware for local use as well as exports
  • The policy has introduced “easier to implement” incentive schemes, including an interest subvention scheme and credit default guarantee, to replace some of the existing ones under the National Electronics Policy 2012.
  • It proposes to provide interest subsidy of 4% on loans up to ₹1,000 crore on plant and machinery, adding that in case of larger loans, the subsidy would be limited to ₹1,000 crore.
  • The government proposes to create a fund to provide default guarantee of up to 75% to banks for plant and machine loans of up to ₹100 crore.

 

Background:

  • The implementation of the Schemes/ Programmes under the aegis of the National Policy on Electronics 2012 (NPE 2012) has successfully consolidated the foundations for a competitive Indian ESDM value chain.
  • NPE 2019 proposes to build on that foundation to propel the growth of ESDM industry in the country.
  • The National Policy of Electronics 2019 (NPE 2019) replaces the National Policy of Electronics 2012 (NPE 2012).

 

Objectives are:

  • To promote domestic manufacturing in the entire value-chain of ESDM for economic development to achieve a turnover of $400 Billion by 2025 including 600 Million mobile handsets valued at  $ 110 Billion (approx. Rs.7 lakh crore) for export.
  • Improve ease-of-doing-business for the ESDM Industry.
  • Encourage Industry-led R&D and Innovation in all sub-sectors of Electronics.
  • Support a comprehensive Start-up ecosystem in emerging technology areas such as 5G, IoT, Artificial Intelligence, Machine Learning, etc., and their applications in areas such as Defence, Agriculture, Health, Smart Cities and Automation, with special focus on solving real-life problems.
  • Provide support for significantly enhancing availability of skilled manpower in the ESDM sector.
  • Provide support for export led growth, including significantly enhancing economies of scale in electronics manufacturing.
  • Develop core competencies in all the sub-sectors of Electronics, including Electronic components and Semiconductors, Telecommunication equipment, Medical electronics, Defence Electronics, Automotive electronics, IndustrialElectronics, Strategic Electronics, etc., and Fabless Chip Design.
  • Become a global leader in the Electronics Manufacturing Services (EMS) segment by promoting progressively higher value addition in manufacturing of electronic products.
  • Provide policy support and special package of incentives for highly capital intensive projects.
  • Drive indigenization in the microchips used by strategic and critical infrastructure sectors viz., Defence, Space, Atomic Energy, Telecom, Aviation, Power, etc., through design and production of such microchips.
  • Create specialized governance structures within the Government to cater to specific needs of the ESDM sector, in view of fast changes in technology and business models.
  • Facilitate cost effective loans for setting up and expansion of electronics manufacturing units.
  • Promote research, innovation and support to the industry in the areas of packaging, interconnects and micro photonics, as a long term measure to counter the problems posed by the continued use of Silicon, like the limit of scaling and dark Silicon.
  • Promote research, innovation and support to industry for green processes and sustainable e-Waste management, including safe disposal of e-Waste in an environment friendly manner, development of e-Waste recycling industry and adoption of best practices in e-Waste management.

 

Salient Features of NPE 2019:

  • Create eco-system for globally competitive ESDM sector: Promoting domestic manufacturing and export in the entire value-chain of ESDM.
  • Provide incentives and support for manufacturing of core electronic components.
  • Provide special package of incentives for mega projects which are extremely high-tech and entail huge investments, such as semiconductor facilities display fabrication, etc.
  • Formulate suitable schemes and incentive mechanisms to encourage new units and expansion of existing units.
  • Promote Industry-led R&D and innovation in all sub-sectors of electronics, including grass root level innovations and early stage Start-ups in emerging technology areas such as 5G, loT/ Sensors, Artificial Intelligence (Al), Machine Learning, Virtual Reality (VR), Drones, Robotics,   Additive   Manufacturing,   Photonics,   Nano-based devices, etc.
  • Provide incentives   and   support   for   significantly   enhancing availability of skilled manpower, including re-skilling.
  • Special thrust on Fabless Chip Design Industry,  Medical Electronic Devices Industry, Automotive Electronics Industry and Power Electronics for Mobility and Strategic Electronics Industry.
  • Create Sovereign Patent Fund (SPF) to promote the development and acquisition of IPs in ESDM sector.
  • Promote trusted electronics value chain initiatives to improve national cyber security profile.

 

Targets:

  • Promote domestic manufacturing and export in the entire value-chain of ESDM for economic development to achieve a turnover of USD 400 billion (approximately INR 26, 00,000 crore) by 2025.
  • This will include targeted production of 1.0 billion (100 crore) mobile handsets by 2025, valued at USD 190 billion (approximately INR 13, 00,000 crore), including600 million (60 crore) mobile handsets valued at USD 110 billion (approximately INR 7, 00,000 crore) for export.

 

Implementation strategy: The Policy will lead to the formulation of several schemes, initiatives, projects and measures for the development of ESDM sector in the country as per the roadmap envisaged therein.

 

Major Impact:

  • The NPE 2019 when implemented will lead to formulation of several schemes, initiatives, projects, etc., in consultation with the concerned Ministries/ Departments, for the development of ESDM sector in the country.
  • It will enable flow of investment and technology, leading to higher value addition in the domestically manufactured electronic products, increased electronics hardware manufacturing in the country and their export, while generating substantial Employment opportunities.

 

Sample Question:

Critically evaluate the New National Electronics Policy.


New National Electronics Policy 2019 Info graphics