Shortage of semiconductors led to the closure or lowering of production by several firms from diverse industries, the Economic Survey for 2021-22 said on Monday.
According to the survey report, the government's move to earmark Rs 76,000 crore outlay for semiconductors and display manufacturing segment will aid their production in the country.
The survey said that government intervention to boost semiconductors and display manufacturing ecosystem in the country has come at a time when the global economy is facing an acute shortage of semiconductors due to severe disruptions in supply chains.
"Several companies from diverse industries have been forced to either shut or curtail production in response to the breakdown of supply chains. The PLI and other schemes to boost semiconductors will not only help domestic companies to overcome the challenges posed by Covid-19 but also assist them to become globally competitive especially in chip making," the survey said.
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IT and telecom minister Ashwini Vaishnaw in December had said that the government expects investments of around Rs 1.7 lakh crore and 1.35 lakh jobs to be created in the next four years under the incentive scheme for semiconductors approved by the cabinet.
"Semiconductors are an integral part of modern technology used in automobiles and its components, electronic and medical devices. The comprehensive interventions being introduced by the government will aid in the establishment of an ecosystem that boosts semiconductor production in India," the survey report said.
The government recently released a vision document for the electronics sector which envisages that domestic electronic production has the potential to reach around Rs 22 lakh crore by 2026.
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The survey said that electronics is recognised as a 'meta-resource' across the world.
"Electronics industry is the world's largest and fastest-growing industry and is increasingly finding applications in all sectors of the economy. With its impact in developing infrastructure, raising productivity, increasing efficiency in the delivery of services, and enabling social transformation, it is accepted as a key enabler in the country's economic development," the survey said.
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