ISA welcomes govt's efforts to boost innovation

BANGALORE, INDIA: Welcoming the Union Budget for the financial year 2011-12, the India Semiconductor Association (ISA) praised the government’s commitment to stimulate manufacturing and innovation in India.

Responding to the Budget proposals, ISA said the Finance Minister's decision to fully exempt raw materials used in manufacturing-specified electronic components from basic customs duty is a good move and will result in higher value addition.

Commenting on the Union Budget, ISA President Poornima Shenoy said, “ISA welcomes the Budget 2011 proposals which will stimulate manufacturing and innovation in India.”

ISA also said the government's plan to come out with National Manufacturing Policy and increase the share of manufacturing in GDP from the present level of 16 per cent to 25 per cent over a period of 10 years is noteworthy.

“Reduction in basic customs for few more materials used in the manufacturing solar cells / modules to nil will correct the distortions in the duty structure and further strengthen solar PV manufacturing in India,” it added.

Observing that the reduction in excise duty on LEDs to 5 per cent and full exemption on special CVD will bring down the cost of manufacturing of LEDs, ISA said it will lead to faster adoption of LEDs in India.

At the R&D front, the Government’s decision to encourage innovation through National Innovation Council is a welcome step, said ISA. Constitution of State and sector specific innovation councils are expected to lead to more IPs coming out of India

When it comes to skill development, connectivity to all 1,500 institutions of Higher Learning and Research through optical fiber backbone by March, 2012 will enhance quality and delivery of education and research, it added.

“The Government’s plans to come out with a National Manufacturing Policy and promote domestic value addition by rationalization and reduction of duty structures is very commendable,” said Poornima Shenoy.

Responding to the proposals, Ashok Chandak, senior director, Global Sales and Marketing, NXP Semiconductors India, said the support for green and energy initiatives, especially in the areas of automotive and solar, is worth noting in this year’s budget.

“Reduction in duty on LEDs will help boost growth of this technology and energy efficiency, since cost is one of the chief inhibitors for adoption of new energy efficient products,” he said.

However, he said it is unfortunate that the budget does not offer anything major for the electronics and semiconductor industry in specific.

Ganesh Guruswamy, vice president and country manager of Freescale Semiconductor India, opined that the impending launch of National Mission for hybrid and electric vehicles in collaboration with all stakeholders will create long-term benefits for the semiconductor industry.

“The basic customs duty on solar lanterns has been reduced from 10 per cent to 5 per cent and that for products used in the manufacture of solar modules/ cells is completely removed. This is an important move by the Government of India in laying the foundation of a green initiative through solar which will again provide the much needed fillip to the semiconductor industry,” he added.