Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)

The Ministry of Electronics and Information Technology (MeitY), Government of India, has introduced the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS). Its objective is to address the cost disadvantage faced by domestic producers of electronic components and semiconductors, thereby reinforcing the electronics manufacturing base. The scheme operates in line with the National Policy on Electronics 2019 (NPE 2019) and supports the "Make in India" and "Digital India" initiatives.

Under SPECS, a financial incentive of 25% of eligible capital expenditure is offered on a reimbursement basis. Any legal entity registered in India that invests in eligible electronic components, semiconductor or display fabrication units, Assembly, Testing, Marking and Packaging (ATMP) facilities, specialised sub-assemblies, or capital goods used to produce these items may apply. The scheme covers the establishment of new units as well as the expansion, modernisation, or diversification of existing operations.

MeitY administers SPECS through a Nodal Agency, designated as the Project Management Agency (PMA), currently IFCI Ltd. The PMA handles application receipt, appraisal, acknowledgement issuance, claim verification, and incentive disbursal. Applications are assessed on a continuous basis, and qualifying proposals are forwarded to an Executive Committee (EC), constituted by MeitY and chaired by an officer of Joint Secretary rank, for final approval.

The application process is outlined below.

1. **Visit the Portal:** Go to the official SPECS portal at https://specs.ifciltd.com. 2. **Register/Log in:** Create an account using your Permanent Account Number (PAN) as the username, set a password, and complete the CAPTCHA. 3. **Fill Application Form:** Complete the online form, which has three parts: Applicant Details (company structure, financials, credit history), Proposal Details (eligible goods, investment size, financial closure, projections, market research, regulatory treatment), and Application Fee Details. 4. **Pay Application Fee:** Pay the non-refundable fee electronically. The amount depends on project size, ranging from ₹10,000 for projects below ₹25 crore to ₹1.25 lakh for projects of ₹10,000 crore and above. 5. **Submit Application:** Upload all required documents and submit the application on the portal. A unique Application ID is issued upon successful submission. 6. **Incomplete Application Check:** IFCI Ltd. (PMA) reviews the application for completeness within 15 working days. If it is incomplete, you have 15 working days to rectify it; otherwise, the application is closed. 7. **Acknowledgment:** Once completeness criteria are met, the PMA issues an Acknowledgement with your Application ID. This date starts your 5-year investment window. 8. **Appraisal:** The PMA conducts a detailed appraisal of your application and may request additional information. 9. **Executive Committee Review:** The PMA presents the application to the MeitY-constituted Executive Committee for a recommendation. 10. **Approval Letter:** If the recommendation is favourable, the PMA issues an Approval Letter. 11. **Incur Expenditure:** Eligible capital expenditure must be incurred within 5 years from the acknowledgment date. 12. **Commence Production:** Commercial production must start before any incentive claims are made. 13. **Submit Claims:** Log in to the SPECS portal and submit incentive claims every 6 months, on a cash basis. 14. **Claim Verification:** The PMA verifies claims through documentation checks and site visits (at least 30% physical verification). 15. **Sanction Letter:** The PMA issues a Sanction Letter for the approved claim amount. 16. **Submit Undertakings:** Provide the Integrity Compliance Undertaking, Indemnity Bond, and any other required documents. 17. **Disbursement:** The PMA releases the incentive after all formalities are completed.

The Project Management Agency (PMA) appraises applications continuously. Those that meet the eligibility criteria are referred to an Executive Committee (EC), which MeitY has constituted and which a Joint Secretary-rank officer chairs. The EC examines each proposal and advises whether it should be approved, turned down, or altered.

For claims, the PMA checks eligible capital expenditure using documents and on-site inspections. It physically verifies no fewer than 30% of the expenditure items before a Sanction Letter is issued and the incentive is paid out.