Parliamentary Panel Slams IT Ministry For Surrendering Half Of Allocated Semiconductor Funds

A parliamentary panel has pulled up the Ministry of Electronics and IT for surrendering over half of the funds allocated for semiconductor and display manufacturing projects in 2023-24.

As per PTI, citing a report tabled in the Lok Sabha, under the modified programme for development of semiconductors and display manufacturing ecosystem in India, during FY24, the ministry spent only INR 681.11 Cr out of the total allocation of INR 1,503.36 Cr as of March 31, 2024, surrendering 55% of the funds.

The Standing Committee on Communications and IT has highlighted a gradual decline in fund allocation for the Digital India Programme from the Budget Estimate (BE) 2021-22 to BE 2024-25, coupled with consistent underutilisation of funds by the ministry over the years.

“Surrendering of funds beyond 50 allocated reflects improper planning by the ministry. The committee may be apprised of the reasons for non-utilisation of precious allocated funds which could have been allotted to other ministries for its effective utilisation,” the report said.

The panel has asked MeitY to make realistic projections in the future and ensure optimal fund utilisation through better planning and monitoring mechanisms. The ministry, in its submission to the panel, stated that funds under the India Semiconductor Mission can only be disbursed after a claim is made.

“Surrenders mainly come in the PLI, the electronics manufacturing and production-linked incentive scheme and in the semi-conductor programme because enough money is allocated under the Budget. Later on, when private companies are not able to spend and they are not able to file claims, then there is a surrender,” the ministry had said.

The development comes at a time when both domestic and global semiconductor players are making a beeline for India to capitalise on the subsidies offered by the government. India has received 18 proposals for semiconductor projects, including four for semiconductor fabs and thirteen for compound semiconductor fabs and ATMP (assembly, testing, marking, and packaging) facilities.

The applicants include the likes of Tata Electronics, Micron Technology, CG Power, among others. While  

While Tata Semiconductor Assembly and Test (TSAT) has earmarked INR 27,000 Cr to set up a unit in Assam’s Morigaon for advanced semiconductor packaging technologies, US-based Micron is also building an ATMP facility in Sanand, Gujarat at estimated cost of INR 22,516 Cr.

CG Power and Renesas are establishing a semiconductor unit in Sanand to manufacture specialised chips with a planned investment of INR 7,600 Cr.