Production Linked Incentive Scheme for Large Scale Electronics Manufacturing
The government recently announced that a total of 22 companies have filed their application under the Production Linked Incentive Scheme (PLI scheme).
• The PLI scheme for large scale electronics manufacturing was notified on April 01 and it was open for filing applications till July 31. The incentives are applicable under the scheme from August 01.
• PLI scheme extends an incentive of four per cent to six per cent on incremental sales (over base year) of goods under target segments that are manufactured in India to eligible companies, for a period of five years subsequent to the base year (FY2019-20).
• According to the scheme, companies that make mobile phones which sell for Rs 15,000 or more will get an incentive of up to 6 per cent on incremental sales of all such mobile phones made in India.
• In the same category, companies which are owned by Indian nationals and make such mobile phones, the incentive has been kept at Rs 200 crore for the next four years.
• The Scheme will be implemented through a Nodal Agency which shall act as a Project Management Agency (PMA) and be responsible for providing secretarial, managerial and implementation support and carrying out other responsibilities as assigned by MeitY from time to time.
Tenure of Scheme
The PLI scheme will be active for five years with the financial year (FY) 2019-20 considered as the base year for calculation of incentives.
All investments and incremental sales registered after FY20 shall be taken into account while computing the incentive to be given to each company.
The total incentives over five years have thus been kept at Rs 40,951 crore.
o For the first year, the total incentive to be given has been capped at Rs 5,334 crore.
o For the second and third year it has been kept at Rs 8,064 and Rs 8,425 crore respectively.
o In the fourth year, the incentive will be hiked substantially to Rs 11,488 crore.
o In the fifth and final year, the incentive to be distributed has been capped at Rs 7,640 crore.
Advantages of Scheme
The scheme will attract big foreign investment in the sector.
It will encourage the domestic mobile phone makers to expand their units and presence in India.