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2 Feb 2026·Source: The Indian Express
3 min
EconomyScience & TechnologyNEWS

Budget Boost: ₹40,000 Crore for Electronics Manufacturing, Doubled Outlay

Electronics manufacturing gets a boost with doubled outlay to ₹40,000 crore.

Budget Boost: ₹40,000 Crore for Electronics Manufacturing, Doubled Outlay

Photo by Louis Reed

The government has doubled the outlay to Rs 40,000 crore for electronic components. This move aims to boost domestic manufacturing capacity, enhance energy security, and reduce import dependencies. The increased investment is expected to drive growth in the electronics sector, particularly in the manufacturing of display modules and capacitors. This initiative aligns with the government's broader strategy to promote self-reliance and strengthen the manufacturing base in the country.

Key Facts

1.

Outlay for electronic components: Doubled to ₹40,000 crore

UPSC Exam Angles

1.

GS Paper 3: Economy - Industrial Policy

2.

Connects to government schemes for manufacturing sector

3.

Potential for statement-based MCQs on industrial policy and PLI schemes

Visual Insights

Electronics Manufacturing Boost: Key Statistics

Key statistics related to the government's increased investment in electronics manufacturing.

Increased Outlay for Electronics Manufacturing
₹40,000 crore

Doubled outlay to boost domestic manufacturing capacity, enhance energy security, and reduce import dependencies.

More Information

Background

The electronics manufacturing sector is crucial for economic growth and technological advancement. India's journey in this sector began in the 1960s with the establishment of Bharat Electronics Limited (BEL). Early policies focused on import substitution, aiming to build domestic capabilities. This phase saw limited success due to technological gaps and protectionist measures. The Liberalization, Privatization, and Globalization (LPG) reforms of 1991 marked a shift towards a more open and competitive environment. Following the LPG reforms, the electronics sector experienced gradual growth, driven by increased foreign investment and domestic demand. However, India remained heavily reliant on imports for electronic components and finished goods. The National Policy on Electronics (NPE) 2012 aimed to address this by promoting domestic manufacturing and reducing import dependence. This policy introduced incentives and infrastructure development initiatives to attract investment and create a conducive ecosystem. The current push for electronics manufacturing is also linked to broader government initiatives like Make in India and Atmanirbhar Bharat. These initiatives emphasize self-reliance and aim to transform India into a global manufacturing hub. The increased outlay for electronic components aligns with the objectives of these programs by providing financial support and encouraging domestic production. The government also uses measures like customs duties to incentivize domestic production.

Latest Developments

In recent years, the government has launched several schemes to boost electronics manufacturing. The Production Linked Incentive (PLI) scheme offers financial incentives to companies that increase domestic production. This scheme has attracted significant investment in sectors like mobile phones and electronics components. The government is also focusing on developing a skilled workforce through various training programs and initiatives. These efforts aim to address the skills gap and create a pool of qualified professionals for the electronics industry. The electronics sector is also witnessing rapid technological advancements, particularly in areas like artificial intelligence, Internet of Things (IoT), and 5G. These technologies are driving demand for advanced electronic components and creating new opportunities for manufacturers. The government is encouraging research and development in these areas to foster innovation and enhance competitiveness. The focus is on creating an ecosystem that supports the development and adoption of cutting-edge technologies. Looking ahead, the electronics sector is expected to play a key role in India's economic growth. The government has set ambitious targets for increasing domestic production and exports. The aim is to reduce import dependence and transform India into a global electronics manufacturing hub. This will require continued investment in infrastructure, technology, and skills development. The government is also working to create a favorable regulatory environment that attracts investment and promotes innovation. The recent increase in outlay for electronic components is a step in this direction.

Frequently Asked Questions

1. What is the key takeaway regarding the electronics manufacturing sector?

The government has doubled the outlay to ₹40,000 crore to boost domestic electronics manufacturing, enhance energy security, and reduce import dependencies.

2. What are the key facts about the electronics manufacturing boost for the UPSC Prelims exam?

The outlay for electronic components has been doubled to ₹40,000 crore. This aims to boost domestic manufacturing capacity, enhance energy security, and reduce import dependencies.

Exam Tip

Remember the doubled outlay amount: ₹40,000 crore. This is a likely MCQ.

3. Why is the electronics manufacturing sector important for India?

The electronics manufacturing sector is crucial for economic growth and technological advancement. It helps in reducing import dependencies and strengthens the manufacturing base in the country, aligning with the government's strategy to promote self-reliance.

4. What are the recent developments in the electronics manufacturing sector?

The government has launched several schemes like the Production Linked Incentive (PLI) scheme to boost electronics manufacturing. This scheme offers financial incentives to companies that increase domestic production, attracting significant investment in sectors like mobile phones and electronics components.

5. What is the historical background of electronics manufacturing in India?

India's journey in electronics manufacturing began in the 1960s with the establishment of Bharat Electronics Limited (BEL). Early policies focused on import substitution, aiming to build domestic capabilities. However, this phase saw limited success due to technological gaps and protectionist measures.

6. What are the potential benefits of the increased outlay for electronics manufacturing?

The increased investment is expected to drive growth in the electronics sector, particularly in the manufacturing of display modules and capacitors. It can also enhance energy security and reduce import dependencies.

7. What are the pros and cons of the government's focus on boosting domestic electronics manufacturing?

Pros include increased self-reliance, job creation, and economic growth. Cons might involve initial higher costs compared to imports and the need for continuous technological upgrades to remain competitive.

8. What are the important numbers to remember regarding the electronics manufacturing boost?

The key number to remember is ₹40,000 crore, which is the doubled outlay for electronic components.

Exam Tip

₹40,000 crore is the figure to remember for Prelims.

9. What are the government initiatives related to electronics manufacturing?

The government has launched several schemes to boost electronics manufacturing, including the Production Linked Incentive (PLI) scheme.

10. How does this increased outlay impact common citizens?

Increased domestic electronics manufacturing can lead to more affordable electronic products, job creation, and overall economic growth, positively impacting common citizens.

Practice Questions (MCQs)

1. Consider the following statements regarding the Production Linked Incentive (PLI) scheme: 1. The PLI scheme aims to boost domestic manufacturing and attract large investments in specific sectors. 2. The scheme provides financial incentives based on incremental sales linked to increased production. 3. The PLI scheme is applicable only to MSMEs in the manufacturing sector. Which of the statements given above is/are correct?

  • A.1 and 2 only
  • B.2 and 3 only
  • C.1 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: A

Statement 1 is CORRECT: The PLI scheme is indeed designed to boost domestic manufacturing and attract significant investments in targeted sectors. Statement 2 is CORRECT: The scheme offers financial incentives that are directly linked to incremental sales resulting from increased production. Statement 3 is INCORRECT: The PLI scheme is NOT exclusively for MSMEs. It is open to large companies as well, depending on the specific sector and scheme guidelines. The scheme aims to attract both domestic and international players to enhance manufacturing capabilities.

2. Which of the following statements best describes the primary objective of the 'Make in India' initiative?

  • A.To promote foreign direct investment in the service sector.
  • B.To transform India into a global manufacturing hub.
  • C.To focus solely on agricultural exports.
  • D.To improve the tourism infrastructure in India.
Show Answer

Answer: B

The 'Make in India' initiative's primary objective is to transform India into a global manufacturing hub by encouraging domestic production and attracting foreign investment in the manufacturing sector. Options A, C, and D are incorrect as they focus on other sectors or aspects not central to the initiative's main goal.

3. The recent increase in outlay to ₹40,000 crore for electronics manufacturing primarily aims to:

  • A.Increase software exports
  • B.Boost domestic manufacturing capacity and reduce import dependencies
  • C.Subsidize electronics imports
  • D.Promote tourism in electronics manufacturing hubs
Show Answer

Answer: B

According to the provided summary, the increased outlay to ₹40,000 crore for electronic components aims to boost domestic manufacturing capacity, enhance energy security, and reduce import dependencies. Options A, C, and D are not mentioned in the summary and are therefore incorrect.

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