Electronics manufacturing, semicon, research get Rs 15,500 Cr budget allocation

The government has allocated Rs 15,500 crore for various electronics manufacturing programmes, including semiconductor and mobile and IT hardware PLI schemes for FY25.

It has proposed Rs 4,203 crore incentives for assembly, test, and packaging plants that can benefit projects like the ones set up by Micron in Gujarat, the proposed plant by Foxconn and HCL joint venture, Tata Group etc.

The proposed outlay covers projects for setting up compound semiconductor and sensor plants.

The scheme for setting up a semiconductor fab or electronic chip plant in India has been allocated Rs 1,500 crore, Mohali-based semiconductor laboratory Rs 900 crore, design linked incentive scheme Rs 200 crore.

In total, various schemes under semiconductor projects will get Rs 6,903 crore allocation.

Besides this, the government has proposed enhancing allocation for mobile production linked incentive (PLI) scheme to Rs 6,125 crore in 2024-25 from Rs 4,489 crore in 2023-24.

Companies like Dixon, Foxconn, Optiemus Electronics, Lava etc are engaged in mobile PLI schemes.

According to the interim budget document, the government has proposed to allocate only Rs 75 crore for IT hardware PLI where total incentives of around Rs 17,000 crore have been promised over a period of 5 years.

For older electronics hardware manufacturing schemes like modified special incentive package, electronics cluster etc, the government has proposed to allocate Rs 750 crore.

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"The substantial allotment of Rs 15,000 crore for various manufacturing schemes will provide a significant thrust to the industry. The noteworthy increase in the allocation for the Modified Programme for Development of Semiconductors and display manufacturing ecosystem, now standing at Rs 6,903 crore, is poised to drive forward the semiconductor and telecom industry, offering a substantial boost," GX Group CEO Paritosh Prajapati said.

The government has enhanced capital outlay to Rs 1,148.25 crore for FY25 from Rs 1,000 crore in FY24.

On the other hand, it has reduced capital outlay for state-run telecom research and development firm C-DoT to Rs 500 crore from Rs 590 crore in 2023-24.

There has been no allocation for telecom hardware PLI scheme, as per the budget document.