by M-SIPS
In order to promote large scale manufacturing in the country, M-SIPS was announced by the Government in July, 2012 to offset disability and attract investments in Electronics System Design and Manufacturing (ESDM) Industries. The scheme provides incentive for investments on capital expenditure- 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs.
The Scheme was revised vide notification dated 03-08-2015 which was further amended vide notification dated 30-01-2017. The Scheme was closed to receive new application on 31 December, 2018.
The Scheme provides:
- Capital Subsidy: 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs.
- Incentives for both new units and expansion units.
- Incentives for a period of 5 years from the date of approval of application.
- Incentives for 44 categories/verticals across the value chain (raw materials including assembly, testing, packaging and accessories, chips, components).
- Minimum investment threshold for each product category/ vertical (from Rs 1 crore for manufacturing of accessories to Rs 5000 crores for memory semiconductor wafer fabrication unit.
- Unit to be in Industrial Area notified by Central/State Govt.
Incentives:
- The incentive under the scheme is in the form of subsidy for capital expenditure. The subsidy is 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs.
- It also provides for reimbursements of CVD/ excise for capital equipment for the non-SEZ units.
- For some of the high capital investment projects like fabs, it provides for reimbursement of Central Taxes and Duties.
- The incentives are provided on reimbursement basis (means first investment has to be made by the unit to claim the subsidy).
- Units all across the manufacturing value chain are covered under the scheme. For each of the product category, an investment threshold is prescribed which an applicant has to incur for getting eligible for incentives. The investment threshold varies from Rs 1 Crore to Rs 5000 Crores depending upon the type of project.
- The incentives are available for a period of 5 years from the date of approval.
- The term of the scheme has been extended upto 27-07-2020.
Modification notified on January 31st, 2017
As per the amendment made after the Cabinet meeting chaired by Prime Minister Narendra Modi on January 17, 2017, certain changes have been made. Firstly, a revised time-period and incentive coverage is laid. As per the amendment, incentives will be given to applications received till 31st December 2018 or till total incentive commitment reaches Rs 10000 crore; whichever is earlier. This means that the total incentives or subsidy for capital investment is limited to Rs 10000 crore and it has to be provided by end March 2018. If the incentives provided crosses Rs 10000 crore before 2018 March 31st, a review of the scheme is to be taken by the CEO of NITI Ayog to decide on further continuation of the scheme. The incentives are limited to five years from date of approval. After receiving the incentives, the unit should undertake production for a period of at least 3 years. An appraisal Committee chaired by Secretary of Ministry of Electronics and Information Technology will approve projects under M-SIPS. A separate Committee headed by Cabinet Secretary and comprising of CEO, NITI Aayog, Secretary Expenditure and Secretary, MeitY (Ministry of Electronics and Information Technology) will be set up in respect of mega projects, envisaging more than Rs. 6850 crore (or USD 1 Billion) investments.
Self-Employment & Talent Utilization (SETU)
SETU will be a Techno-Financial, Incubation and Facilitation Programme to support all aspects of start up businesses, and other self-employment activities, particularly in technology-driven areas. It aims to create around 100,000 jobs through start-ups.
Scheme Benefits & Highlights
An amount of INR 1,000 crore is being set up initially in NITI Aayog for SETU for setting up of incubation centres and enhance skill development to facilitate the startup ecosystem in the country while improving the ease of doing business.
This scheme aims at increasing the number of startups by incubation and extending other services for reducing the rate of unemployment in the country.
Advantages of Self Employment and Talent Utilization; SETU Scheme
- Working from Home
Self Employment is one of the means by which work from home is increasing. Also, if you are self-employed you will have the benefit of balance work and personal life in a very flexible way. You can take care of children and work on your project at the same time.
- Own Boss
Most of the people don’t like to work under someone’s supervision. This also leads to unemployment. This becomes one of the reasons for a person to opt for self-employment.
- Less Expenditure
Salary comprises a major part of any organization’s expenditure. In case of Self Employment, there is no need to pay a salary to anyone. Hence, working for yourself means you can manage your own salary. Moreover, it helps to reduce expenses like travel to work, life insurance, etc.
- Reduction in Unemployment
There are various reasons because of which many individuals sit idle and become part of the unemployed workforce. One of the major reasons was the lack of finance to start a new business.
Through SETU, finance is easily available for young entrepreneurs. It also helps to eradicate unemployment and poverty on a large scale.
- Work-life Balance
Self-employment provides a better work-life balance, as one can manage one’s own schedule and workload more flexible.
- Work at any place and time
Being self-employed gives you the power of choosing your own workspace. You don’t always have to stay at home. When you want some fresh air, you can work from a favourite cafe or any other favourable location.
- No need to wear Uniforms
Though uniforms provide a sense of discipline in any organization, it seems to be a burden for many people. Through this program, people have started working from home. so, there is no need to wear uniforms. Hence, there is no burden of it.
Disadvantages of Self Employment and Talent Utilization – SETU Scheme
- Increase in Risk
It is your responsibility to make sure you always have work to do. This means you may sometimes be without work and income. Though under this scheme, the individuals get a loan at a cheaper rate. But during the recession period, that little interest can be a big burden.
- Lack of Employee Benefits
Most of the individuals in this current era want to enjoy monetary as well as non-monetary benefits. But under this scheme, there is least or no benefits as received under employment contracts.
- Start from the Scratch
Establishing business and building a client base can be a tiring and frustrating process. You need determination to succeed and perseverance.
- Lack of finance in the rural area
Nobody can deny that most of the unemployed youth belong to rural India. This program aims at providing funds, but the sad part is that its reach is still limited to the urban areas. Most of the rural areas are deprived of funds to start a new business.
- Continuous Running Costs
One can go for several months without earning a profit, and one always has to pay running costs such as rent, insurance, and internet access. Hence, it program may lead to an increase in burden on the individuals in the initial phase of the business. In extreme cases, it also leads to an increase in the NPA of the government.
