The Union Cabinet on Wednesday approved a pared-down modified special incentive package meant to boost electronics manufacturing by cutting down the application window by about one and a half year to December 31, 2018, and capping the outflow at Rs 10,000 crore.
“We have on Wednesday amended MSIPS scheme. Now, proposals under MSIPS will be accepted till December 2018. Incentives of Rs 10,000 crore have been allowed. If investment is more than of USD 1 billion, then a high-powered committee presided by the Cabinet secretary will approve it,” Law and IT Minister Ravi Shankar Prasad told reporters on Wednesday.
Under the scheme, the applications will be received up to December 31, 2018, or till such time that an incentive commitment of Rs 10,000 crore is reached, whichever is earlier, an official statement said.
The previous amendment in MSIPS in August 2015 had extended the scheme till July 27, 2020.
The Cabinet, however, has decided to review the decision on further financial commitments in case the incentive commitment of Rs 10,000 crore is reached. For new approvals, the incentive will be available from the date of approval of a project and not from the date of receipt of application.
The Cabinet has also halved the period of investment from 10 years to five years to avail incentives.
“The incentives will be available for investments made within 5 years from the date of approval of the project,” the statement said. A unit receiving such benefits under the scheme will provide an undertaking to remain in commercial production for at least 3 years.
A government official said the idea behind the new changes is to get serious players in and expedite the projects.
However, the government has decided to give approval in time-bound manner to applicants which will be “within 120 days of submission of the complete application”.
Investments above Rs 6,850 crore will be cleared by a high powered committee.
“A separate Committee headed by the Cabinet secretary and comprising CEO, NITI Aayog, expenditure secretary and MeitY secretary will be set up in respect of mega projects, envisaging more than Rs 6,850 crore (around USD 1 billion) investments,” the statement said.
An official source said the Cabinet secretary-headed panel will decide whether the incentives for the projects being screened by it should be provided within the Rs 10,000 crore limit or considered separately.