PLI scheme for telecom

PLI scheme for telecom

Subject: Economy

Context: The cabinet approved a production-linked incentive (PLI) scheme worth Rs 12,195 crore for telecom equipment manufacturing

Concept:

• The Cabinet today has approved the Production Linked Incentive (PLI) Scheme for Telecom and Networking Products.
• This was done after encouraging success of PLI related to Mobile and component manufacturing launched in April, 2020.
• It seeks to make India a global hub of manufacturing telecom equipment including core transmission equipment, 4G/5G Next Generation Radio Access Network and Wireless Equipment, Access & Customer Premises Equipment (CPE), Internet of Things (IoT) Access Devices, Other Wireless Equipment and Enterprise equipment like Switches, Routers etc.
• As part of AtmaNirbhar Bharat it seeks to offset the huge import of telecom equipment worth more than Rs. 50 thousand crores and reinforce it with “Made in India” products both for domestic markets and exports
• The scheme outlay is Rs. 12,195 Crores over five years.
• The eligibility for the scheme will be subject to achievement of a minimum threshold of cumulative incremental investment and incremental sales of manufactured goods net of taxes.
• Financial Year 2019-20 shall be treated as the Base Year for computation of cumulative incremental sales of manufactured goods net of taxes.
• For MSMEs, one percent (1%) higher incentive at 7% for first 2-years and 6% for next 1 year is proposed compared to other industries.
• Minimum Investment threshold for MSME has been kept at Rs. 10 Crores and for others at Rs. 100 Crores.
• Once qualified, the investor will be incentivized up to 20 times of minimum investment threshold enabling them to utilize their unused capacity.