2019 Interim Budget wish: Electronics makers seek Rs 1,000-crore seed fund

Interim Budget 2019:

With the 2019 interim budget round the corner, stakeholders in the electronics sector are expecting the government to create a seed fund of Rs 1,000 crore and abolish the angel tax that has hit start-ups hard.

“The Government should create a seed fund of Rs 1,000 crore, which can be matched by industry and VCs (venture capitalists), to provide seed funding to build 1,000 start-ups in the ESDM (electronic system design & manufacturing) space. We have requested the government to create such a fund in the budget in our wish list submitted to the ministry,” said Rajesh Ram Mishra, president, India Electronics and Semiconductor Association (IESA), the trade body representing the ESDM industry.
“We have also recommended to the government to abolish angel tax for ESDM start-ups," Mishra added. "Angel tax and the current policy of getting the start-up valuation done by a merchant banker are hitting ESDM start-ups very hard."

According to IESA, start-ups in electronics and semiconductor space primarily depend on angel and self-funding, as very few VCs in India are investing in ESDM companies.
Additionally, the association has also urged the government to enable research and development (R&D) through provisioning separate budget to fund projects of national interest in the electronics and semiconductor domain and enable collaborative R&D among public sector undertakings, SMEs and start-ups.


 With electronics becoming a key enabler in creating an ‘intelligent’ economy like smart homes, smart transportation, smart cities, the association has urged the government to provide support to create 50 intelligent electronics incubators collaborating with industry in various technology and industry verticals in mission mode similar to Atal Innovation Mission.