Cabinet Approves Rs 12,000 Crore Production-Linked Incentive Scheme For Telecom Sector

The Union Cabinet has approved Rs 12,195 crore production linked incentive (PLI) scheme for the telecom and networking products in order to boost India's manufacturing capabilities and enhance exports."The Cabinet has approved PLI for telecom sector...to ensure further progress of Make-in-India in telecom equipment space...5G equipment will also come...so it was important to give incentives," Telecom minister Ravi Shankar Prasad said in a media briefing after a cabinet meeting. The scheme outlay is for a period of five years.

Eligibility under the scheme will be subject to achieving a minimum threshold of cumulative incremental investment and incremental sales of manufactured goods. The incentive structure ranges between 4 and 7 per cent for different categories and years. Financial Year 2019-20 will be treated as the base year for computing cumulative incremental sales of manufactured goods, net of taxes, a government release said.

The minimum investment threshold for MSMEs is Rs 10 crores and for others, Rs 100 crore. "Once qualified, the investor will be incentivized up to 20 times of minimum investment threshold enabling them to utilize their unused capacity, the release added.

The scheme is aimed at offsetting the huge import of telecom equipment worth more than Rs 50,000 crore and reinforce it with "Made in India" products both for domestic markets and exports. It will lead to incremental production of around Rs 2.4 lakh crores with exports of around Rs 2 lakh crores over five years. The scheme is expected to bring investment of over Rs 3,000 crore and generate huge direct and indirect employment and taxes.

The government had, towards the end of last year, rolled out a PLI scheme worth Rs 50,000 crore for large-scale electronic goods makers for five years, to attract investments in mobile phone manufacturing and electronic component units.

The government will also come up with a PLI scheme to encourage production of laptops and tablet PCs, the minister added. 

The PLI initiative is a part of the government's plan to support domestic manufacturing and convert India into an attractive and alternate manufacturing destination.

All major mobile component manufacturers of world are expanding their powerful footprints in India by making investments, starting exports and giving jobs to thousands of Indians.