Cabinet approves PLI scheme for telecom sector worth Rs 12,195 cr

at 5:00 pm
telecom connectivity
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New Delhi (NVI): The Union Cabinet today approved Production Linked Incentive (PLI) scheme for telecom and networking products with a budgetary outlay of Rs 12,195 crore, to boost domestic manufacturing in India.

Union Minister of Electronics & IT Ravi Shankar Prasad made the announcement after Cabinet meeting, chaired by the Prime Minister, Narendra Modi saying that the PIL scheme on telecom products will be implemented from April 1.

The decision over the scheme was taken to offset the huge import of telecom equipment worth more than Rs 50,000 crores and reinforce it with “Made in India” products
both for domestic markets and exports.

According to an official statement, “This approval comes in wake of very encouraging success of PLI related to Mobile and component manufacturing, which was announced in April 2020 during the height of COVID pandemic.”

The initiative will 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., the Cabinet said in a statement.

The PLI scheme was finalized after widespread consultation with stakeholders like manufacturers, industry leaders and associations, the Cabinet said, adding that, 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.

The previous 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 per cent) higher incentive is proposed in year 1, year 2 and year 3 and the minimum investment threshold for MSME has been kept at Rs 10 crores and for others at Rs 100 crores, the Cabinet said.

“Once qualified, the investor will be incentivized up to 20 times of minimum investment threshold enabling them to utilize their unused capacity, it said.

Furthermore, this scheme will also lead to incremental production of around Rs 2.4 lakh crores with exports of around Rs 2 lakh crores over 5 years and will bring investment of more than Rs 3,000 crore and generate huge direct and indirect employment and taxes both, the statement added.