Maharashtra Government is planning to release the new state Electronics Policy – after the return of chief minister Devendra Fadnavis from China.
Apurva Chandra, principal secretary, Department of Industries, recently said that the new policy is aimed at creating a favorable regulatory mechanism in Maharashtra. The state will aim to compete with other states like Karnataka and Punjab in offering fiscal and non-fiscal incentives.
Incentives like reimbursement of VAT for goods produced and sold within the state, interest subsidy, reducing threshold of mega projects, separate investment subsidy package for manufacturing of Lithium Ion Battery etc., lowest VAT rate to be levied on electronics products used for data communication by declaring such products as goods of special importance etc. are expected to help establish electronics manufacturing — specially in the mobile handset segment — eco-system in Maharashtra.
Manufacturing in areas like Mumbai and Pune will be incentivized. These incentives are offered over and above those offered by the Central Government under the national policy of electronics and policies like M-SIPS which offers 20 – 25 percent of subsidy on capital investments in the electronics sector.
Rajesh Aggarwal, co-founder of Micromax, who had attended a delegation in China, welcomed the policy parameters and the chief minister’s assurance that the package will be released within three weeks time after his return from China.
The delegation demanded VAT reform in the new policy. The mobile industry is looking for reduction in 12.5 percent VAT rate on mobile handsets in Maharashtra. 12.5 percent VAT and octroi of 6 percent is posing challenges to mobile manufacturing industry in Maharashtra.