The department of information technology is seeking an opinion of the Cabinet in deciding the fate of the high-profile Media Lab Asia, a joint venture between India and the Massachusetts Institute of Technology of the United States.

"The draft Cabinet paper has already been prepared by the department and I hope the Cabinet will find time to deliberate on it soon," Arun Shourie, minister for IT and communications said on the sidelines of Elitex 2003, the annual IT seminar organised by the DIT.

He, however, said Media Lab Asia is certainly not being shut but would be restructured in every way.

"Whether it is going to be exclusive relationship with MIT or anybody, how much private funding is going to be available, greater participation in decision-making for people who will be doing or directing the research, the staff of Media Lab Asia... in all these areas there would be restructuring", he said.

The Rs 5000 crore (Rs 50 billion) Media Lab Asia was planned with a view to bridge the digital divide and help undertake research in the areas which would benefit people at large.

Earlier this month, the IT department in its revised plan, had stated it was considering a move to make it purely a government-aided research and development outfit.

DIT has suggested that research and collaborative agreement, which formed the basis of the project, would be dropped and a project-specific agreement will be in place.

In the new proposed structure, there would be academic mode of funding- government R&D together with industry's participation rather than a business mode of private sector funding, the revised plan said.

The Media Lab Asia project, which was initially designed as an industry-sponsored project, failed to get assistance from the country's private sector.

Earlier, while delivering the inaugural speech at Elitex 2003, the minister said an advanced institute for micro and nano electronics will be set up to give a boost to the hardware industry.

Scientific advisor to the government of India R Chidambaram will help DIT in choosing the venue, faculty and manner of running the proposed institute, he said.

Nano and micro technology refers to the development of small, micro chips, with higher computing power to be used in electronics products such as computers and mobile phones.

While asking the IT industry to move up the value chain, Shourie said there should be closer links between the R&D sector, industry and the academia.

Stressing the need to develop the hardware sector he said the Budget has given good sops and it is up to hardware units to respond with results. Earlier in his address, scientific advisor to the government, R Chidambaram, said the industry needed to increase its R&D spend, currently at a low of 10 per cent.

He asked the industry to follow the US pattern of investment where two-thirds of investment went to hardware, while one-third was in software.