Maharashtra to unveil New Electronics Hardware Manufacturing Policy

The Maharashtra government is all set to release the new state Electronics Policy. The policy announcement is expected to be made after the chief minister, Devendra Fadnavis returns from the China visit along with prime minister Modi.  This was revealed during a meeting with the Electronics Hardware and Software Industry leaders at a high-level meeting chaired by chief minister at the State Guest House in Mumbai recently.

Apurva Chandra, the principal secretary, Department of Industries, presented the draft policy during the meeting which was attended apart from the chief minister, by the Minister for Industries, chief secretary, additional chief secretary, IT, Additional Chief Secretary, Environment, Principal Secretaries from major administrative Departments like Urban Development I and Urban Development II, Revenue, Finance, Labour etc.

Chandra mentioned that the new policy is aimed at creating a favorable regulatory dispensation in Maharashtra State to make it competitive vis-à-vis other states like Karnataka and Punjab in terms of fiscal and non-fiscal incentives being offered.

Incentives like availability of reimbursement of VAT for goods produced and sold within the state, Interest subsidy, reducing threshold of mega projects, separate investment subsidy package for manufacturing of Lithium Ion Battery etc., lowest VAT rate to be levied on electronics products used for data communication by declaring such products as goods of special importance etc. are expected to rejuvenate the efforts of the state administration and Industry bodies like ICA to help establish robust manufacturing eco-system in Maharashtra in the Electronics sector specially in the Mobile handset segment.

Even manufacturing in forward areas like Mumbai and Pune will be incentivized. These incentives are offered over and above those offered by the Central Government under the National Policy of Electronics and stalwart policies like M-SIPS which offers 20 – 25% of subsidy on capital investments in the Electronics Sector.

The Indian Cellular Association (ICA), an organization representing major global and national players in the mobile handset sector, which has also been playing a pioneering role for establishment of ESDM sector specially in the mobile handset segment,  was specially invited to provide inputs on the proposed manufacturing policy on the electronics hardware sector. An ICA delegation led by Rajesh Aggarwal, Co-founder of Micromax had attended the meeting and welcomed the policy parameters and the Chief Minister’s categorical assurance that the package will be released within three weeks time after his return.

Aggarwal mentioned that “Maharashtra’s assets of access to the sea can be leveraged and the proposed incentives are competitive and at par with the ones being offered by other states. And the state would be  The delegation told the Chief Minister and officials that VAT reform in the new policy is a must. The applicable VAT rate on mobile handsets in Maharashtra which stands at 12.5% is higher compared to other states in India; and the same needs to be brought down. It was further mentioned that the 12.5% VAT when combined with high octroi of 6%, manufacturing prospects is at a severe disadvantage currently in Maharashtra.

Pankaj Mohindroo, national president, Indian Cellular Association (ICA) mentioned that "ICA has been closely collaborating and supporting the efforts of the Maharashtra Government for establishing robust manufacturing eco-system in the Electronics sector specially in the mobile phone manufacturing eco-system during the last one year. And the Industry is extremely enthused to learn the inclusion of many of our key recommendations under the revised Draft policy which is expected to be unveiled soon."

"ICA envisages that with the kind of regulatory support that the Maharashtra Governemnt has been contemplating for boosting the growth of the sector under the leadership of the Hon'ble Chief Minister, the state may not be far away from being favourably considered by the investor's community, who are fully conscious about the large domestic market share of the state in the ESDM sector specially in mobile phones, well developed physical infrastructural facilities and availability of skilled labour", Mohindroo further added.

Chief Minister  Fadnavis, the Industries Minister and the senior officials from the state administration who had attended the meeting assured the industry about the state’s utmost priority to take forward the manufacturing vision in the electronics sector and the thoughtful inputs of the Industry and recommendations and concerns will be thoroughly examined and addressed before the final electronics policy is finalized and unveiled.