The government is likely to offer an incentive of Rs 26 per mobile handset to be made in India, as around 70 per cent of the allocated Rs 7.45 billion worth of incentives for electronics manufacturing is set to go to mobile handset manufactures based on the proportion of electronics being produced out of India.
Cyber Media Research said in a note that the government collects revenues of Rs 617 per handset by way of various duties and taxes at an average selling price of Rs 5,138, which is 24 times the incentive allocated per handset.
Finance Minister Arun Jaitley, in his Budget speech, had said the government increased allocations towards schemes such as Modified Special Incentives Package Scheme (M-SIPS) and Electronic Development Fund to Rs 7.45 billion in 2017-18 aimed at creating an ecosystem to make the country a hub for electronic & tech manufacturing.
The agency said that electronics manufacturing in general and mobile phones in particular have become important contributors to the economy in recent years. Mobile phones have in fact gone beyond and are now being seen “as the hub of the Digital Nation that India is in the making”.
