A House Subcommittee Criticises the IT Ministry for not Using Funds for Semiconductors

Nitin Konde, Varun Bhardwaj

Dec 19, 2024 — 2 min read

IT Ministry Faces Criticism for Not Utilizing Semiconductor Budget

The Ministry of Electronics and IT has come under fire from a legislative body for giving up more than half of the money allotted for projects involving the production of semiconductors and displays in 2023–2024. According to a news agency, which cited a report presented in the Lok Sabha, the ministry only spent INR 681.11 Cr of the INR 1,503.36 Cr total allotted as of March 31, 2024, under the modified program for the development of semiconductors and display manufacturing ecosystem in India, giving up 55% of the funds. In addition to the ministry's persistent underutilisation of money throughout the years, the Standing Committee on Communications and IT has pointed out a progressive decrease in funding allocation for the Digital India Programme from the Budget Estimate (BE) 2021–2022 to BE 2024–2025. According to the report, the committee may be informed of the reasons why valuable funds that could have been allocated to other ministries for their efficient use have not been used.

Panel asked MeitY to Make Realistic Projections in Future

In order to guarantee optimal budget utilisation through improved planning and monitoring systems, the panel has requested that MeitY should develop realistic estimates for the future. According to the ministry's statement to the panel, money from the India Semiconductor Mission can only be released following a claim. Due to adequate funding provided by the budget, surrenders primarily occur in the semiconductor program, the PLI, and the electronics manufacturing and production-linked incentive scheme.

There is surrender later on when private enterprises are unable to spend and submit claims, the ministry had stated. The development occurs as domestic and international semiconductor companies are rushing to India to take advantage of the government's subsidies. 18 proposals for semiconductor projects have been sent to India, comprising 13 for compound semiconductor fabs and ATMP (assembly, testing, marking, and packaging) facilities and 4 for semiconductor fabs.

India’s Current Semiconductor Manufacturing Landscape

Among the companies that have applied are Tata Electronics, Micron Technology, and CG Power. US-based Micron is also constructing an ATMP facility in Sanand, Gujarat, at an estimated cost of INR 22,516 Cr, while Tata Semiconductor Assembly and Test (TSAT) has set aside INR 27,000 Cr to establish a plant in Morigaon, Assam, for advanced semiconductor packaging technology. With a planned investment of INR 7,600 Cr, CG Power and Renesas are setting up a semiconductor facility in Sanand to produce specialist chips.

By 2030, the government wants India to rank among the top five countries in the world for semiconductor manufacture. The conditions are in place, and India can meet this goal with the correct combination of proactive measures, technological know-how, infrastructure development, and financial investments.