Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme

The electronic manufacturing industry in India suffers from inadequate funding and development. This is contradictory to the massive demand for electronic goods in the country. Hence, the country has very less infrastructure to accommodate the electronic needs of the people. The lack of reliable and adequate infrastructure leads to poor investment in the industry. The Government of India approved the Modified Electronics Manufacturing Clusters Scheme to increase investment in the electronics manufacturing industry. 

The aim of the Modified Electronics Manufacturing Clusters scheme is to provide financial support to the development of Electronics Manufacturing Clusters (EMC). The financial aid for setting up EMCs will encourage the development of more and more manufacturing units. The development of proper infrastructure for manufacturing will attract investments in the sector of Electronics System Design and Manufacturing (ESDM).

What Is The Aim Of The Modified Electronics Manufacturing Clusters Scheme?

The scheme will fund the development of Electronics Manufacturing Clusters in the country. The funds will be given to two types of projects. The first one is Greenfield EMC, and the second one is Brownfield EMC. Greenfield EMC refers to the project plan for an undeveloped geographical region. The land will require the development of infrastructure and amenities. Brownfield EMC refers to a geographical area with a significant number of ESDM units. The fund will be given to such projects to upgrade the infrastructure.

Key Points of the EMC 2.0 Scheme

• The scheme will provide financial aid to Greenfield and Brownfield EMCs.

• Greenfield EMCs will receive funding of 50% of the total project cost. The project cost should have an upper limit of Rs. 50 crores for every 100 acres of the acquired land.

• Brownfield EMC will receive funding of 75% of the total project cost. The upper limit per project for Brownfield EMC is supposed to be Rs. 50 crore.

• The notification for the EMC scheme was made on October 22, 2012. The Central Government approved the scheme. The implementation of the scheme will begin in October 2022.

• Another key points of the EMC 2.0 scheme are that the Government has approved a total outlay of 3,743 acres for the scheme, and the land area approved for the scheme is 3,464.

• The Government has approved 19 Greenfield projects and 3 Common Facility Centre projects.

• The scheme has been alloted Rs. 1,527 crores to support the financial aid to the projects.

• The expected benefits of the EMC 2.0  scheme are to attract investment in the manufacturing industry.

Expected Benefits of the EMC 2.0 Scheme

• The scheme is a step toward encouraging the vision of a  self-dependent India of the Central Government. 

• The focus is to enhance the growth of electronics manufacturing through good infrastructure development. 

• This will help the country to manage the electronic needs and demands of the public through local production.

• The infrastructural growth will attract investments in the ESDM sector and promote the growth of local electronic industries.

• The expected benefits of the EMC 2.0 scheme also include encouraging the setting up of newer and better manufacturing units for electronics.

Development Activities Allowed Under EMC 2.0 Scheme

• The aim of the Modified Electronics Manufacturing Clusters scheme is to fund the development of basic amenities like boundary walls, water drains, street lights, and internal roads.

• The scheme will cover the expense of developing essential services like warehouses, backup power plants, water treatment plants, and waste disposal units.

• It will also cover welfare service expenses like hostel and mess for employees, shopping centre, recreational area, hospital, nursery, and restaurant.

• It will allow the development of manufacturing support like tool room, steel metal stamping, packaging units, testing units, certification units, and plastic moulding.

• The scheme will also fund support services like training centres, auditoriums, and IT infrastructure.

• Government services like tax support, designated officer, and pollution control are also eligible activities under the scheme.

Who Will Supervise And Implement The Scheme?

• The Electronics and Information Technology, Communications and Railways Ministry of the Central Government, will manage the scheme’s implementation.

• The Union Government will implement the scheme in collaboration with the State Ministry of Electronics & Information Technology, Communications and Skill Development and Entrepreneurship.

• The Special Purpose Vehicle (SPV) will manage the infrastructure’s development, building, and maintenance.

• A Steering Committee for Clusters (SCC) will analyse the proposals made in the projects.

• The SCC will be responsible for selecting projects and sending them for approval. 

Conclusion

The aim of the Modified Electronics Manufacturing Clusters scheme is to increase investment in the electronics manufacturing industry. However, this can be achieved only by significant development in the industry’s infrastructure. The industry lacks proper infrastructure for which the Government will provide financial aid to projects. The projects are classified as Greenfield and Brownfield based on their geographical area and level of development. The key points of the EMC 2.0 scheme are to support EMC projects financially and attract investments. The submission applications for the scheme have begun. The allocation of funding and implementation of the scheme will commence in October 2022.