Cabinet approves ₹1.27 lakh crore for Semicon Mission 2.0, for mobile manufacturing, new highways
The cabinet also accorded approval to two major highway projects worth ₹25,400 crore to ease congestion in Varanasi and as many as nine new gas-based urea plants across the country with a production capacity of 10 million tons
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Context
The has approved massive infrastructure and manufacturing initiatives totaling nearly ₹2 lakh crore. Key approvals include ₹1.27 lakh crore for Semicon Mission 2.0, ₹62,500 crore for the Mobile Phone Manufacturing Scheme, ₹25,400 crore for highway projects in Varanasi, and a new . These approvals align with the government's push for self-reliance (Atmanirbhar Bharat) in critical sectors like semiconductors, electronics, and fertilizers.
UPSC Perspectives
Economic
These approvals highlight a significant strategic push towards import substitution and establishing India as a global manufacturing hub. The 2.0 (₹1.27 lakh crore) is crucial for securing supply chains, especially amid global geopolitical uncertainties and memory chip shortages. Unlike the first phase, Semicon 2.0 expands incentives to raw material suppliers (minerals, gases) and focuses heavily on indigenous chip design, targeting the growing Artificial Intelligence market. This aims to create a holistic ecosystem, reducing reliance on imports and fostering self-reliance. Similarly, the Mobile Phone Manufacturing Scheme (MPMS) shifts focus from mere assembly to achieving technological sovereignty by incentivizing design, R&D, and the creation of Indian brands, moving up the global value chain. The expected generation of 60,000 direct jobs aligns with the need for employment-intensive manufacturing.
Infrastructure & Governance
The approval of highway projects in Varanasi demonstrates a continued focus on infrastructure development through the (HAM), a Public-Private Partnership (PPP) model that balances risk between the government and private developers. These projects are strategically aligned with the , which aims for coordinated planning and execution of infrastructure projects to reduce logistics costs and improve efficiency. The integration of transport networks (highways connecting to airports, ports, and railways) exemplifies multi-modal connectivity, essential for boosting regional economic growth and facilitating tourism in eastern Uttar Pradesh.
Agriculture & Resource Security
The approval of the (NIPU-2026) is a vital step towards ensuring national food security. India currently imports around 10 million tons of urea annually to bridge the gap between domestic production (30 million tons) and demand (40 million tons). NIPU-2026 aims to set up 8-9 new gas-based plants to achieve self-reliance in this critical fertilizer. By introducing a viable return on equity (RoE) band and separating fixed and variable costs, the policy seeks to attract new investments, including private sector participation. This is critical for managing the government's subsidy burden and ensuring the consistent availability of fertilizers for agricultural production, especially given changing cropping patterns.