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    Ahead of polls, Gujarat announces new electronics policy aiming to create 10 lakh jobs

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    Previous policy of 2016-2021 was aimed at providing 5 lakhs jobs.

    The Gujarat government Saturday announced “Gujarat Electronics Policy 2022-’28” with the aim to create 10 lakh jobs — double of what was promised in the earlier policy for 2016-’21. The policy comes at a time when Assembly polls are around the corner.

    The new policy announced by Minister for Science & Technology Jitu Vaghani targets to create USD 30 billion from electronic manufacturing in Gujarat and provide job opportunities for 10 lakh people by the end of 2028.

    In the 2016-’21 policy, the state government aimed to establish Gujarat as a globally-recognised hub for Electronics System Design and Manufacturing (ESDM) industry, with a turnover of USD 16 billion by 2021 and new job opportunities for 5 lakh people.

    On the previous policy, Vijay Nehra, secretary, science and technology department said, “We attracted an investment of approximately Rs 19,000 crore and created 16,000 jobs.” In June 2022, the Gujarat government had announced its maiden Semiconductor Policy, which promised to create two lakh jobs in the next five years.

    Compared to the previous policy, the ceiling for capital support provided to ESDM units has been doubled to Rs 200 for investments upto Rs 1,000 crore, while certain provisions — such as 100 per cent reimbursement of stamp duty and registration fee, interest assistance on term loans, electricity subsidy of Re 1 per unit, 100 per cent reimbursement of electricity duty, and EPF reimbursements — remain the same.

    “Capital assistance has been significantly enhanced. The important aspect of infrastructure creation has been introduced, along with serious thrust on skilling initiatives and creating a skilled workforce for the mega investments that are expected to flow. The dedicated implementation mechanism in the form of Gujarat State Electronics Mission — which was earlier part of the policy, but was not created — is now in place and it will implement this policy,” said Nehra about the new policy.

    The new policy provides logistics subsidy for ESDM units. The government has offered to reduce operational costs of such units by providing support for transportation of goods, raw materials, machinery required for core manufacturing activities. This includes a support of up to 25 per cent of the freight charges, up to Rs 5 crore per year for five years and a one-time support for relocating their manufacturing operations from outside India to Gujarat.

    The government will also reimburse 50 per cent of the cost incurred on import of manufacturing equipment up to Rs 5 crore.

    “Most of electronics industry is located on the eastern coast of India, which is closer to South-East Asia where the raw materials come from. So we are trying to cover some of the costs of additional transportation to Gujarat through this subsidy,” Nehra added.

    The “market development support” offered to MSMEs and patent assistance seems to be missing in 2022-’28 policy.

    The IAS officer said, “Since the capex subsidy is huge, we have taken a careful decision to make it easy to claim incentives, rather than giving different incentives and creating more complications.”

    The new policy also talks about creation of new Electronics Manufacturing Cluster and common R&D facilities.

    “To strengthen the Gujarat Electronics ecosystem and to develop a robust electronics manufacturing infrastructure in the State, the Government, through its established agencies such as Gujarat Industrial Development Corporation, Dholera Special Investment Region Development Authority etc. may establish Electronics Manufacturing Clusters at strategic locations within the State in the next five years,” states the policy.