Funding Shortfalls: Semiconductor Projects Hit by Budget Allocations

A parliamentary panel has criticized the Ministry of Electronics and IT for underutilizing funds allocated for semiconductor projects in 2023-24. The ministry spent only 45% of the allocated Rs 1,503.36 crore. Suggestions were made for improved planning and fund utilization in future projects.

A parliamentary panel has openly criticized the Ministry of Electronics and IT for failing to fully utilize more than half of the funds allocated for semiconductor and display manufacturing projects for the fiscal year 2023-24. Detailed in a report presented to the Lok Sabha on Wednesday, the committee highlighted the ministry's inefficiencies in budget planning and execution.

In its fourth report on demand for grants, the Standing Committee on Communications and IT noted a gradual decline in allocated funds from the Budget Estimates of 2021-22 through to 2024-25 for the Digital India Programme, specifically pointing out the ministry's history of underutilizing its budgetary allotments. Out of an allocated Rs 1,503.36 crore for the Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India for FY24, only Rs 681.11 crore had been spent by March 31, indicating a 55% surrender of budgeted funds.

The committee demanded explanations for this underutilization, stressing the need for improved accuracy in future budget projections and better planning. The Ministry attributed fund surrenders to the inability of private companies to file claims under schemes like the PLI and semiconductor programs, despite substantial budget allocations. As part of the semiconductor mission, companies like Micron Technology, Tata Electronics, and others have proposed significant investments in India, aiming to bolster the country's semiconductor manufacturing capabilities.

(With inputs from agencies.)