State government is looking at increasing West Bengal’s share of India’s electronics manufacturing output to 15 per cent, in value terms, by 2020. In the ESDM sector, it targets building at least 15 clusters in the state within the next five years.
By Nitasha Chawla
Despite the adverse publicity in the aftermath of the developments at Nandigram and Singur, and with a predominantly agriculture driven economy, West Bengal is actively investing in industrial sectors, including the ICT sector. The state has recently rolled out its much awaited ICT policy, which aims at providing an impetus to its IT and electronics sectors.
Govt initiatives
The ICT policy, which came up after nine years, will provide a Rs 100 million venture capital fund for the IT department. The state has also introduced an ICT investment scheme under which the districts have been divided into four categories—A, B, C and D—D indicates the most remote places. Any company willing to set up a unit in these places will get maximum incentives. Some other incentives that have been offered under this policy include a capital investment subsidy, an interest subsidy, employment generation subsidies, quality improvement and patent creation subsidies in the MSME sector, incentives for approved expansion projects of an existing unit, mega projects and a CST refund scheme. The state has identified Kolkata and tier II towns like Asansol, Falta, Kharagpur, Kalyani and Siliguri, as prospective areas for developing electronic systems design and manufacturing (ESDM) as well as hardware units.
West Bengal has set a target to become one of the top three states with respect to turnover and employment generation in the IT, ITeS and ESDM sectors, by 2020. The government is also looking at increasing West Bengal’s share in India’s electronics manufacturing output to 15 per cent, in terms of value, by 2020. In the ESDM sector, it targets building at least 15 clusters in the state in the next five years, a dedicated ‘hardware cell’ of the IT department and a ‘design centre’.
Last year, the West Bengal government announced its plans to set up two chip manufacturing units with an investment of Rs 250 billion. The project, which has received the Union Cabinet’s approval, will be set up either exclusively by the Defence Research and Development Organisation (DRDO) and a defence public sector unit or through a public-private partnership. The project will have a semiconductor unit with the technology to support the fabrication of chips, to meet the requirements of high volume products as well as the requirements of the fabless design companies on a pay-per-use basis.
Associations’ initiatives
There are several local trade bodies and associations that work for the development of the electronics industry in the state. This includes the All Bengal Electronics & Accessories Manufacturers’ Association (ELMA) and the West Bengal Electronics Development Corporation Limited (WEBEL). ELMA has been formed by the local manufacturers with an aim to encourage the growth of electronics industries in the state, to assist and promote new entrepreneurs, and to safeguard the interests of the local manufacturing units. WEBEL, on the other hand, is a nodal agency of the government that helps in developing electronics and ITES industries in the state and creating value for its citizens. The body acts as a single window support centre for all services required by the IT and ITES investors. It facilitates the growth of the industry by a host of measures, such as developing infrastructure in the form of land or buildings and facilitating the clearance processes that are required to set up business. WEBEL also ensures last mile connectivity, assists the government in all its e-governance projects, and brings tangible benefits to citizens in the fields of healthcare and IT education.
Advantages the state offers
The industrial environment in West Bengal, if not the best, is now becoming better and more conducive to fresh investments. Its infrastructure, like the power and water supply, has also improved over the years. One of the factors that has helped Kolkata score over other business centres is its large population of unskilled and semi-skilled labour, along with other blue collar and knowledge workers. A stable and cost efficient workforce, and the availability of resources and talent, has made the city a favoured destination for manufacturers.
A number of growth centres have been planned in such a manner that availability of skilled as well as unskilled labour is assured from the neighbouring towns. Besides these growth centres, three mega growth centres—one each in the districts of Birbhum, Jalpaiguri and Malda—will be set up. An export processing zone (EPZ) is already operational at Falta in the district of 24-Parganas (South). This EPZ provides good infrastructure for export-oriented units. With a view to identifying infrastructural and other related requirements to facilitate further industrial development, the state government has constituted a high powered committee on infrastructure development under the chairmanship of the minister of state in charge of commerce and industries.
The state government attaches special importance to the growth and development of electronic industries. An electronic complex has been set up in a very convenient location, close to the city of Kolkata and also to the airport. The complex provides developed land and facilities like power, water, a road network and communication facilities. The electronics complex also includes a standard design factory (SDF) building.
The state government is also offering attractive incentives to encourage the growth of industrial activities in West Bengal. Apart from this, incentives like a state capital investment subsidy, a waiver of electricity duty, sales tax deferment/remission, etc, are also being offered.
The government, however, still needs to work on certain areas like the unfriendly taxation policy and the booming grey market, which are hampering the growth of the electronics industry in the state.
Also, lack of connectivity and an ineffective supply chain are other issues faced by the manufacturers.
