NEW DELHI, INDIA: The Indian government issued guidelines last Friday for the operation of the special incentive package scheme to encourage investments for setting up of the semiconductor fabrication units and other micro and nanotechnology manufacturing units in India.

The guidelines define fab unit, ecosystem unit, state-of-the-art technology, net present value (NPV), financial closure, capital expenditure and threshold limit.

The proposal for the special incentive package should be based on those standards as defined along with the feasibility report, officials said in a release. According to the guidelines, the investors have to submit the proposal to the 'Appraisal Committee'(AC) constituted by the government with a non-refundable application fee of Rs.. 25 lakhs.

The release stated that only technologically sound projects will be eligible under SIPS. Investors who can attract further upstream or downstream investments will be encouraged. The committee on the basis of the advice available on record, would recommend to the Central Government. Approval of the project under SIPS rests with the Government, the release said.

"Investments made before the date of receipt of applications and investment in land made more than six months before the date of receipt of application will not be considered for calculation of capital expenditure,” the guidelines said. The projects, which get approved by the government, would have to submit the annual audited accounts as adopted by the board of directors and a certificate from the auditors of the company with regard to date-wise expenditure on items eligible under the scheme.

"Such request shall be made and entertained subject to approval of the government after the end of the financial year in which the NPV (as calculated as at the base year) exceeds the threshold value of the total eligible investment," the guidelines said. The veracity of all claims submitted will be duly verified, the release said.