Addressing key disabilities: The way forward to realize a globally competitive IT-ESDM manufacturing ecosystem in India

Industry needs support through key policy measures in the spheres of ease of doing business, integrated approach to manufacturing, industry friendly tax regime, skills development and demand generation

iii) Skills Gap and Technical Education: When we talk about creating a world class hardware manufacturing ecosystem in the country, it requires the availability and contribution of many types of skilled engineers and technicians – civil engineers, mechanical engineers, electrical engineers, plastics engineers, electronics engineers to IT engineers, technicians, semi-skilled helpers and so on. So, skill building is a very important pre-requisite for the success of this initiative. We believe the HR development roadmap of Ministry of Communications and IT should be taken forward in right earnest, along with the inputs and contributions of industry players and sectoral skills councils like the Electronics Sector Skills Development Council of India (ESSCI) and other stakeholders.

Unfortunately, technical education is an important area that is in poor shape in the country, with no single unified approach. While at the national level UGC, AICTE, IITs, NITs and ITIs design and run various degree and diploma courses there is a need for integration of technical and non-technical/soft skills education as well. In fact, I would like to suggest that standard course curricula should be designed at the national level by a statutory body, say, the ‘Electronics Industry Education Council of India’, and each state should set up a university for technical education. Thus, a standards based, industry focused, unified approach will help to remove many of the anomalies that exist today and produce directly ‘employable’ human resources.

iv) Taxation Disabilities: Budget 2016 has not touched on all the legacy issues; rather it has created some confusion. Government needs to restrict Populated PCBs from being imported at concessional rates and incentivize the manufacture of components within the country. Making Populated PCBs within the country will automatically create a huge demand for components, thus giving rise to ‘upstream’ component manufacturers.

Again, in terms of Customer Premise Equipment (CPE), the current rate of duty differential between imported and ‘Made in India’ Modems is only 6%; this differential should be increased to at least 12% to encourage local manufacturing.

Similar differences in tariff should be stipulated for imports versus locally made Network Switches, Routers, Access Points, USB Adapters, Set-Top Boxes (STBs), CCTV Cameras/Surveillance Cameras, Digital Video Recorders (DVRs), and Voice over Internet Protocol (VoIP) products.

v) Finance Disabilities: The finance cost in this country is very high. If at every step of the ESDM value chain the cost of finance is 15%, then obviously, the higher the value addition, the higher would be the disability on account of finance cost. So, government should consider coming up with a special fund where the lowest possible rate of interest is specially made available for IT and electronics hardware manufacturing entities, as part of the mission to encourage ‘Make in India’.

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