Parliamentary Panel Criticises IT Ministry for Surrendering Over Half of Semiconductor Fund Allocation

A parliamentary committee has criticised the Ministry of Electronics and IT for returning over half of the funds designated for semiconductor and display manufacturing projects in 2023-24. This information was revealed in a report presented to the Lok Sabha. The Standing Committee on Communications and IT noted a consistent reduction in fund allocation from the Budget Estimate (BE) 2021-22 to BE 2024-25 for the Digital India Programme, alongside the ministry's underutilisation of funds over time.

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The report highlighted that under the Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India, only Rs 681.11 crore out of the Rs 1,503.36 crore allocated for FY24 was spent by March 31, 2024. This resulted in a significant surrender of 55% of the funds. The committee expressed concern over this surrender, indicating poor planning by the ministry. It urged the ministry to provide reasons for not using these crucial funds, which could have been redirected to other ministries for better use.

The panel has asked MeitY to make more accurate future projections and ensure efficient fund utilisation through improved planning and monitoring. The ministry explained that it can release funds under the India Semiconductor Mission only after claims are submitted. The surrenders mainly occur in schemes like PLI and semiconductor programmes due to adequate budget allocations. However, when private firms fail to spend or file claims, funds are surrendered.

Investment Proposals Under Semiconductor Mission

Under the semiconductor mission, several companies have proposed significant investments in India. Micron Technology plans to establish an ATMP facility with an investment of Rs 22,516 crore. Tata Electronics aims to set up a semiconductor fab facility with an investment of Rs 91,526 crore, along with an OSAT facility costing Rs 27,120 crore.

CG Power has proposed an outsourced semiconductor assembly and test (OSAT) facility with an investment of Rs 7,584 crore. Kaynes Technology is also planning an OSAT facility with an investment of Rs 3,307 crore. These proposals reflect substantial interest from private companies in India's semiconductor sector.

The ministry's inability to utilise over half of its allocated budget highlights a need for better financial management. Ensuring that funds are effectively used could support other ministries' projects and contribute to national development goals. The committee's recommendations aim to address these issues by promoting realistic budgeting and efficient resource allocation in future initiatives.