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