Why India must manufacture microchips :
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Why India must manufacture microchips :

It will help India move up from an assembler to a manufacturer, with considerable multiplier effect on the economy

Why India must manufacture microchips :
The government recently unveiled three schemes with an outlay of about ?48,000 crore to promote electronics manufacturing in India. These schemes, combined with the Prime Minister’s call for an ‘Atmanirbhar Bharat’, have rejuvenated hopes of a rise of an indigenous electronics industry. The Indian electronics sector is already witnessing tremendous growth, as the demand is poised to cross $400 billion by 2023-24. In fact, domestic production has grown from $29 billion in 2014-15 to nearly $70 billion in 2019-20 (CAGR of 25 per cent).

Most of this production takes place in the final assembly units located in India. The idea is that focussing on assembly units, that is, ‘last-mile industries’, would eventually help develop deep backward linkages, thus inducing industrialisation. This was an idea propounded by economist Albert O Hirschman in his theory of ‘Unbalanced Growth’. The Economic Survey 2019-20 also promotes this by suggesting “assembly in India for the world”, especially in “networked products”, in a bid to create four crore well-paid jobs by 2025 and eight crore jobs by 2030. This is the strategy that helped China become the economic superpower it is today. The recently launched PLI (production-linked incentive) scheme plans to achieve this goal by granting an incentive of 4-6 per cent for domestic production.

The data is compiled from : www.thehindubusinessline.com



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