"To attract investments in the sector, the state will provide 10 percent or Rs.5 crore as capital subsidy to firms and reimburse 20 percent of the research and development expense they incur or account for two percent (Rs.1 crore) of their annual turnover, Patil added."
Bangalore, June 20 - Karnataka IT and Biotechnology Minister S.R. Patil Friday called on the hardware sector to boost its capacity of manufacturing electronics goods to replicate the country's success in the software sector.
If we do not build capacity to manufacture electronics goods on a mass scale, the country may have to pay a heavy price in future, as we continue to import more than indigenising their production, Patil said at a workshop here.
Noting that the surging import bill of components such as processors, motherboards and semiconductors (chips) would touch a whopping $400 billion in 2020 and if hardware manufacturing was not scaled up, Patil said foreign exchange outflow on electronics goods would surpass that of petroleum products over the next five years.
Around 65 percent of electronics goods, including products, components and chips, are imported to meet the growing demand from industrial and retail segments from across the country.
As technologies change rapidly due to research and innovations roll out new products, the domestic industry has to keep pace with them to sustain and grow, Patil said on the occasion.
The day-long workshop is organised by the state-run Karnataka State Electronics Development Corporation Ltd (Keonics) in association with Varnaaz Technologies Ltd, a franchise for imparting computer skills to job seekers in the hardware sector.
The state is setting up two more electronics manufacturing clusters in Bangalore and Mysore to boost production.
The Union government had cleared the state's proposal to set up the first brownfield EMC at the Electronic City in south Bangalore, with the central government contributing Rs.50 crore, the state government Rs.19 crore and industry Rs.16 crore.
To attract investments in the sector, the state will provide 10 percent or Rs.5 crore as capital subsidy to firms and reimburse 20 percent of the research and development expense they incur or account for two percent (Rs.1 crore) of their annual turnover, Patil added.
Indian Electronics and Semiconductors' Association (IESA) president M.N. Vidyashankar said a master plan would be prepared in collaboration with the central and states to expand the electronics manufacturing capacity across the country.