Chip Making To Black Listing Its All There

Fostering Electronic Growth

The government took a quantum leap towards boosting the fortunes of the electronic hardware industry in India. In its last meeting, the cabinet has approved the setting up of two Semiconductor Wafer Fabrication (FAB) Manufacturing Facilities in the country. This step will have a big impact on the development of Electronics System Design and overall manufacturing eco-system across the country. 

These FAB facilities would be set up by Jaiprakash Associates and HSMC Technologies at Yamuna Expressway, Uttar Pradesh and Prantij, Gujarat respectively. Overall project cost for these facilities would be Rs 63412 crore, wherein Rs 34399 crore would be invested in UP, while Rs 29013 crore would go to the Gujarat project.

IBM, USA and Israel’s Tower Semiconductor would partner in Jaypee’s unit, while ST Microelectronics and Silterra Malaysia are with HSMC in setting up the FAB unit in Gujarat. Both these units will have a capacity of 40000 WSPM and are slated to create around 22000 direct jobs. In addition to this, it would also foster indirect employment for around one lakh. 

These FAB units will bring many incentives to the companies setting them up including a 25 per cent subsidy on capital expenditure and tax reimbursement, exemption of Basic Customs duty for non-covered capital items, 200 per cent deduction on expenditure incurred on R&D, investment linked deduction under the Income Tax Act and interest free loans. The Letter of Intent with regard to this will be issued by March 31. 

A Parting Gift?

Two constituencies represented by two stalwarts have received what can best be described as a parting gift by their representatives in the government. The high profile Cabinet Committee on Economic Affairs (CCEA) has approved the revival plan of the sick ITI Limited based on the recommendations of the Board for Reconstruction of Public Sector Enterprise (BRPSE). Rs 4156.79 crore would be infused into the company and the revival plan would be regularly monitored by suitable committees at corporate and unit levels as also by the apex committee which would be chaired by Secretary (T), DOT.  As per the package Rs 2264 crore will be given in the form of equity for project implementation as capex and the balance Rs 1892.79 crore will be given for meeting statutory liabilities and other commitments. The stock of the company witnessed a good up move in volumes on the bourses after this announcement. 

In a second move, the cabinet also approved the setting up of Jagdishpur Paper Mills at Jagdishpur in Amethi.  This would be a green field pulp and paper project to be set up at a cost of Rs 3650 crore. The project will be implemented in two phases. The paper mill will venture into production of coated/uncoated printing and writing paper. It will reduce the gap between production and import of writing and printing paper and also give direct employment to 900 persons.

Preparing to Fly High

Minister of state for civil aviation, K C Venugopal has informed the parliament that the government is keen on privatization of 14 more airports of the country in addition to the six in which it has already begun the privatization process. The six airports that will be handed over to private parties as per the public-private partnership (PPP) model include, Chennai, Lucknow, Kolkata, Guwahati, Jaipur and Ahmedabad. 

Even as the process for the above six is underway, the government also wants to privatise some more airports situated in Bhubaneshwar, Coimbatore, Trichy, Varanasi, Indore, Amritsar, Udaipur, Gaya, Raipur, Bhopal, Agartala, Imphal, Mangalore and Vadodara as per PPP model. The Government is doing so in order to maintain these airports as per international standards and to boost non-aeronautical revenues. 

Black Days For Coal

In a bold move the government has cancelled 14 coal block licences allocated to various companies. These include big names like Tata Power, Reliance Energy, ArcelorMittal, Hindalco, GMR, JSPL, Lanco and Sterlite. The cancellation of around 50 per cent of these blocks has been put on hold as courts have issued interim orders against them. Companies are not eying legal options against the government’s move as they have already invested heavily in these blocks. The government is moving fast on the fate of 10 more blocks and a meeting of inter-ministerial group will take place on February 25 to decide on these as well. These blocks are the ones that didn’t receive forest clearances and were allocated to companies like DB Power, JSPL, JSW Steel, Tata Steel, Essar Power among others. The government had earlier cancelled 10 blocks and all these de-allocations are happening after the Attorney General told the Supreme Court that the government will review the allocation of all 61 blocks where production hasn’t started.