Cabinet approves over Rs 12,000-cr PLI scheme for telecom sector: Prasad

The Union Cabinet on Wednesday approved a production-linked incentive (PLI) scheme worth Rs 12,195 crore for telecom equipment manufacturing.

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

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 government said in a release.

The government expects that the scheme will lead to Rs 2.4 trillion incremental production of telecom equipment in the country in the next five years and will bring an investment of more than Rs 3,000 crore and generate direct and indirect employment.

The government said, the cabinet decisions will be a boost to Prime Minister Narendra Modi's vision of Atmanirbhar Bharat and make India a global hub of telecom equipment manufacturing including for next generation 5G technology.

The scheme was finalised after widespread consultation with stakeholders, the government said, adding that the eligibility 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 (FY20) will be treated as the base year for computation of cumulative incremental sales of manufactured goods net of taxes.

For MSMEs, 1 per cent higher incentive is proposed in the first three years and the minimum investment threshold for them has been fixed at Rs 10 crore. For others it is kept at Rs 100 crore.

"Once qualified, the investor will be incentivised up to 20 times of minimum investment threshold enabling them to utilise their unused capacity," the government said.

Briefing reporters after a meeting of the Cabinet, Communications Minister Ravi Shankar Prasad said the government is positioning India as a global powerhouse for manufacturing, and has created a conducive environment for ease of doing business.

The minister said that soon the government will come up with a PLI scheme to encourage production of laptops and tablet PCs.