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Govt plans to fund start-ups in electronics sector

Posted: 25 Jul 2013     Print Version  Bookmark and Share

Keywords:start-ups  electronics  R&D 

The Government is expected to announce guidelines for supporting start-ups in the electronics sector soon. According to a news report by The Hindu Business Line, the government may even fund 15-25 per cent of the total investments through fund managers, including large IT companies and banks.

"This will be the first time in the country when we will have a system by which the Government can effectively stimulate the private sector in R&D work, because we have one of the lowest intensities of R&D relative to the GDP (less than 1 per cent)," a senior official at the Department of Electronics and Information Technology (DeitY) told Business Line.

The guidelines are being prepared by a high level committee, under the chairmanship of the Principal Scientific Adviser to the Government, R Chidambaram. The Government will also fix its return on investment at around 5 per cent, once the guidelines are finalised.

This will be part of the National Electronics Mission under the National Policy on Electronics 2012. The investments will be routed through the Government's 'Electronic Development Fund' scheme, which aims to invest around Rs.12,000 crore by 2020, the official added. The Government expects additional mobilisation of around Rs.30,000 crore—to be raised from the industry by 2020.

Under the NPE, the Government is hoping the electronics sector will achieve a turnover of around

Rs.21.74 lakh crore ($400 billion) by 2020. This involves investment of around Rs.5.43 lakh crore ($100 billion). It will also help employ around 2.80 crore people by 2020.

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