NITI Aayog wants 10-year tax holiday for investments of $1 billion or more
NITI Aayog may seek Cabinet’s approval in a fortnight for a long-term policy to boost manufacturing of electronic products by providing a host of incentives to attract investment.
“NITI Aayog has almost finalised a policy for encouraging manufacturing of electronics in the country, which is likely to be placed before the Union Cabinet for its approval,” a source said.
In view of great potential of electronics manufacturing sector, NITI Aayog has prepared a draft strategy paper titled ’Make in India—Strategy for Electronic Products.’
Draft for comments
NITI put the draft in public domain for comments in May this year. The stakeholders and the general public were asked to submit the views and comments by June 30, 2016.
Aayog had suggested a 10-year tax holiday for companies investing over $1 billion in electronics manufacturing activities.
“We would also want to provide for the 10-year tax holiday on investments of $1 billion or more that can also create 20,000 jobs. This would help bring some large foreign firms to India,” Aayog had said in the paper.
The NITI Aayog has also been asked to devise an export-oriented strategy for the industry, saying the domestic market at $65 billion remains small in relation to the world market, which is in excess of $2 trillion. The Aayog’s line is big success requires operating in a large world market. Therefore, India must reorient its policy to ensure the industry becomes competitive in export markets. India’s domestic consumption of electronics hardware in 2014-15 was $63.6 billion while imports accounted for 58 per cent of this figure.
NITI suggested that the country needs to forge free trade agreements (FTAs) to create duty-free market for electronic goods. It had also suggested setting up coastal economic zones (CEZ) which may be up to 200-250 kilometres wide from the coastline.
Source: The Hindu dated 21 August, 2016.