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Government initiatives to push electronics sector

Posted: 13 Feb 2007     Print Version  Bookmark and Share

Keywords:IISc  FDI  government support  electronics industry  small technology enterprises 

Prithviraj Chavan
Chavan: "The government will come out in a much bigger way, than it has supported any industry ever."
Through its capital market reforms, the central government aims to create a market specially tailored for small technology enterprises, which will address their constraints of marketing expertise and financial capacity. The market will provide an exit route to such enterprises, through mechanisms such as IPO-sale to private equity companies.

This mechanism will enable technology entrepreneurs from India's premier leading science and technology institutes to become serial entrepreneurs, shared Prithviraj Chavan, minister of state, Prime Minister's Office, government of India at the 2007 Vision Summit held in Hyderabad.

The government of India will create a funding mechanism through stock market reforms, where banking risks will be shared by the capital market. The government is also working on creating a bond market, to fund activities in the semiconductor sector, said the minister.

"The government will come out in a much bigger way, than it has supported any industry ever," Chavan stated. However, the entire financial requirement of the sector will not be directly met by the government, the minister indicated, as government ownership would not be a desirable model for the sector's development.

Other government initiatives hold the potential to create demand for the electronics sector, the minister pointed out. For instance, the Rs.1,81,280 crore ($40 billion) rural development programme, Bharat Nirman, which has six deliverables for rural areas, will drive consumption of low-cost electronic devices that the industry will locally produce.

Digital technology will play a critical role in delivery mechanisms such as distance education, and e-learning, which will deployed in the higher education sector. The government's vision is to develop delivery systems for higher education, along the lines of MIT Open Courseware, to which the industry could contribute.

To address the issue of consistency in quality of engineers, the government is working on education sector reforms that will aim to increase the output of high quality engineers from the academic system.

Three more Indian Institutes of Science (IISc) will be opened, at Pune, Mohali and Kolkata, along the lines of the IISc, Bangalore. The number of seats for higher learning will be increased by 54 per cent, over the next three years. This will involve the establishment of four or five new Indian Institutes of Technology (IITs), and new business schools of the calibre of Indian Institute of Management (IIM), at Ahmedabad and Bangalore. The new national design policy will envisage the creation of institutes of industrial design, such as the National Institute of Design (NID), shared the minister.

The government is also actively considering foreign direct investment (FDI) in higher education, with a possible cap of 70 per cent on direct investment by foreign universities. This measure is aimed at addressing the faculty crunch in Indian universities.

- Krishnan Sivaramakrishnan
  EE Times-India

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