MeitY seeks higher budgetary allocation for its ECMS scheme

The Ministry of Electronics and Information Technology (Meity) is pushing for enhanced allocation for its flagship electronic component manufacturing scheme (ECMS) in the coming budget from the finance ministry, officials said. This could make the scheme the largest component of Meity's budgetary demands for grants.

Buoyant industry response to the scheme had expanded the total incentive outgo for ECMS to a projected Rs 41,468 crore, 1.8 times the government's original assessment of Rs 22,805 crore, according to official estimates. The scheme has a six-year tenure starting this fiscal year, including a potential one-year gestation period. The finance ministry will hence release the funds on a staggered basis.

"There is a lot of interest in the scheme,” said an official. “It will be foundational in building the manufacturing base for the entire electronics ecosystem, not only components. As such, a higher allocation for the scheme has been sought.”


The last budget saw a sharp increase in Meity’s allocation, rising 48.1% to Rs. 26,026 crore in FY26. This compares with the revised estimates of Rs 17,566.3 crore in FY25, primarily due to a boost in electronics and semiconductor manufacturing.

Total investment commitments under the scheme are at Rs.1,15,351 crore so far, nearly double the original target of Rs. 59,350 crore. Production worth Rs.10,34,751 crore is expected to be generated over the next six years, 2.2 times higher than the initial projection. The scheme is also expected to create 1,41,801 direct jobs, surpassing the target of 91,600, along with a large number of indirect employment opportunities.

Ongoing rollout

In three tranches so far, the government has approved 46 projects under ECMS, totalling investments worth Rs 54,567 crore, and targeted production of Rs 3.67 lakh crore. Nearly 51,000 direct jobs are projected to be created. Currently, the electronics sector employs 2.5 million people in India, of which 1.4-1.5 million work in mobile phone manufacturing.

The Centre is expected to announce further beneficiaries of ECMS going forward, officials said.

The ECMS offers multiple types of financial incentives. Under the turnover-linked model, incentives will be calculated as a percentage of the increase in sales over a company’s base year. It applies only to sales of eligible products made in India and covered under the scheme.

The capex-linked incentive supports spending on eligible capital equipment and infrastructure used to manufacture the specified products in India. Companies may face incentive cuts of 1% and 5% if they are unable to meet employment requirements under the turnover-linked and capex-linked incentive models, respectively.

A hybrid incentive model, combining elements of the other two models has also been made available for specific high-priority products under the scheme.