New Delhi: The government has said that semiconductor fabrication plants and manufacturers of other hi-tech information technology products will have to invest a minimum of Rs2,500 crore to avail of government incentives.

It had earlier planned to peg the minimum investment for semiconductor fabrication projects at Rs2,500 crore and Rs1,000 crore for manufacturers of other hi-tech IT products.

The changes are expected to be included in the new semiconductor fabrication (FAB) policy, for which the department of information technology has already moved a Cabinet note.

The finance ministry has also supported the cabinet note, on providing fiscal incentive equal to 25 per cent of the capital expenditure incurred during the first 10 years of a project. It has been proposed that this would be in the form of investment grant, tax benefit and interest subsidy, valued at 15 per cent of the capital expenditure.

The government is also working on extending the fiscal incentive package to hi-tech IT products' manufacturers in the software technology parks of India (STPIs) by 10 years from the current limit up to March 2010.

In addition, the government is also expected to change its contribution of 10 per cent as equity in the capital expenditure, subject to a cap of 26 per cent of total stake in the unit. This money can be used for other schemes.