The Hindu Business Line : Capital subsidy sought for units making solar PV products

Hyderabad, June 19 The Indian Semiconductor Association (ISA) has recommended that incentives in the form of capital subsidy on the lines specified under the Semiconductor Policy be made available to larger number of units engaged in solar Photovoltaic (PV) manufacturing.

Domestic companies are finding it difficult to compete in the export market in the backdrop of global economic slowdown and fall in the prices of the products of their competitors.

Higher duty structures are compounding the concerns of the local companies.

The Government can also float tax saving ‘Renewable Energy Bonds’, like infrastructure bonds, to collect low-cost funds from the general public. Entrepreneurs can avail themselves of the funds to reduce their cost of capital for manufacturing solar PV products, the ISA said in its wishlist for the Union Budget.

Extension of Software Technology Park (STP) scheme, simplification of transfer pricing regime, abolition of fringe benefits tax (FBT) on employee stock options (ESOPs) are some of the key recommendations.

The ISA suggested that the India Semiconductor Policy 2007 be extended till March 2015 from March 2010. The extension will provide time to market the policy and improve the prospects of India to attract investments.

The domestic semiconductor market, according to the ISA-Frost & Sullivan India semiconductor market update report (2008-2010), is projected at $7.6 billion in 2010.

The ISA suggested that the threshold limit for certain categories such as ATMPs, optical LEDs, storage devices, LCD, FPD, PV, fuel cells, micro and nano technology products needs to be re-visited, as these units may not require large investment of the order of Rs 1,000 crore.

Manufacturing clusters

The ISA said manufacturing clusters should be promoted through strong and efficient Government – industry collaboration, with provision for adequate support to address logistics and other infrastructure inefficiencies.

Special incentives such as reduction of excise duty on local electronic manufacturing to 4 per cent from 8 percent, progressive increase of tax credits for higher value addition, relaxation of duties on sample product imports, sample support to spur R&D and product development etc must be provided, the ISA said.