STATE POLICY - ODISHA
Odisha ’ s ESDM industry – Analysis of Advantages & Challenges
Low cost of doing business
Conversion costs in ESDM industry can be high as 35 % of the overall selling price for electronic component manufacturing while for electronic products , it varies from 10 % -20%.
Cost of manpower , power , water , land constitutes a major proportion of the manufacturing costs with an estimated 60 % - 70 % of the manufacturing costs . Thus availability of factor inputs like power , water , labour , land etc . at competitive prices is crucial to carry out electronics manufacturing at globally competitive prices . This assumes greater importance in today ’ s scenario where India is trying to compete with other countries like China which have been well knows as ‘ low-cost ’ manufacturing locations in the world .
The state of Odisha has the advantage of some of these inputs being available at highly competitive costs as illustrated in the table below . When leveraged rightly , this could act as a major driver for electronic manufacturing in Odisha .
Key challenges for ESDM industry growth in the State
1 ) Poor presence of ESDM ecosystem in the state : In order to promote ESDM sector and attract more companies in the sector , it is essential to achieve a critical mass in terms of the number of companies working in the ESDM sector . The value chain of electronics manufacturing is highly integrated and interdependent and thus the attractiveness of a region as the investment destination for electronics manufacturing depends on the maturity of the value chain and the presence of players huge challenge . across the value chain in that region . availability of employable talent specific to electronics is a
In addition , the presence of private ESDM training / finishing However , currently Odisha houses very few companies like schools is very low in comparison with other states like
Semtech , Perfectus , Sankalp Semiconductor etc . in the ESDM Karnataka or Andhra Pradesh . space . This presence is also confined to only two subsectors /
As ESDM is currently not included in Odisha state employment parts of the value chain ( namely Semiconductor design & mission ( 2012 )’ s targets for skill development in various sectors component manufacturing ). There are little or no ESDM during the 12th 5-year plan , it may be included as suggested exports from the state in the recent years . Thus there is an in the ‘ Skill development ’ section of Govt . initiatives . urgent need to strengthen the ESDM ecosystem in the state .
3 ) Absence of electronics specific clusters : As per the The below diagram illustrates the complexity of electronics
National Electronics Policy , the Govt . of India has set a target value chain ( with active component manufacturing expanded ). to create 200 electronics clusters by 2020 in order to promote electronics manufacturing .
Electronic system design
Passive components
Active components
Other components
Electronic system manufacturing
Software , Build & Packaging
Semiconductor IP
Electronic product
IC design
IC Fabrication
AIMP
EDA tools
Marketing , distribution & selling
The Government of Odisha has planned to set up Greenfield Electronics Manufacturing Cluster ( EMC ) at Infovalley , Bhubaneswar , and , in this regard , would be submitting the application to Department of Electronics & IT ( DeitY ), Government of India under the latter ’ s EMC Scheme .
In addition , ESDM is recognized by the Govt . as a priority sector and not a thrust sector . Thrust sector has additional advantages like higher stamp duty exemption , VAT reimbursement for 10 years , Entry tax exemption , CST reimbursement , Interest subsidy etc , which do not apply for or have lower incentives in case of priority sector . Thus , as suggested in the ‘ Govt . initiatives ’ section , the incentives applicable for ‘ Thrust sector ’ should be provided for ESDM as
2 ) Poor availability of talent : Availability of relevant |
well . |
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manpower is crucial to the development of any industry . As
ESDM industry has higher dependence on skilled manpower , especially for highly specialized activities like electronics system design , IC design and manufacturing etc ., the availability of talent with relevant skill sets assumes greater importance .
However currently , there is little availability of experienced skilled or highly skilled manpower for ESDM sector . This is due to the poor presence of ESDM companies in Odisha currently .
Other states like Karnataka , Tamil Nadu , Andhra Pradesh where the ESDM industry is already present are much ahead on this aspect .
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4 ) Raw material availability : Though Aluminium is produced in large quantities in Odisha , the purity does not meet the requirement for Aluminium foils for manufacture of electrolytic capacitors etc .
5 ) Poor social indicators : Quality of life in a particular location is one of the aspects considered while attracting existing talent from other locations . However , data below shows that there is scope of improvement for Odisha on some such parameters . a .
One of the least urbanized states ( less than national average of 27.8 %) – Next only to Bihar among the 16 major states in India .
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Apart from poor availability of total fresh talent , poor |
b . |
Low per capital income – 5th lowest among 16 major |
State
Odisha Andhra Pradesh Tamil Nadu
Electronics related Engg . graduates ( Current Capacity )
17800 140000 77000
Total Engg . graduates ( Current Capacity )
41000 320000 234000
No of colleges offering Engineering courses
150 700 570
Spotlight on Indian Electronics 2016 | 92