Govt extends telecom PLI scheme by a year, ups incentive by Rs 4,000 cr

Expands scope to cover design-led manufacturing; policy has also been amended to build a strong 5G ecosystem

The government has extended the productivity-linked incentive scheme for the telecom industry by another year and has expanded its scope to cover design-led manufacturing. The Centre will provide additional incentives of over Rs 4,000 crore under the amended scheme.

The Department of Telecommunications said the decision to amend the scheme was taken following consultation with stakeholders who had complained of stiff incremental and production targets for the first year 2021-22.

The department had notified the PLI scheme last February with an allocation of Rs 12,195 crore. Thirty-one companies were selected under the scheme last October. The beneficiaries will be able to select 2021-22 or 2022-23 as the first year for availing the incentives.

The policy has also been amended with the aim of building a strong ecosystem for 5G, the government said.

“The scheme is open to both MSME and non-MSME companies, including domestic and global companies. The applications from design-led manufacturers shall be prioritised over other manufacturers while shortlisting. Design led manufacturing is primarily aimed to support efforts for designing telecom products in India. It will recognise and encourage R&D-driven manufacturing in the country to enhance its contribution to the global value chain as envisaged in the National Digital Communication Policy, 2018,” the government said in a press release.

Applicants will have to satisfy the minimum global revenue criteria to be eligible under the scheme. Companies may invest in single or multiple eligible products. The scheme stipulates a minimum investment threshold of Rs 10 crore for MSME and  Rs 100 crore for non MSME applicants. Land and building cost will not be counted as investment. The eligibility shall also be subject to incremental sales of manufactured goods (covered under scheme target segments) over the base year (FY2019-20). The allocation for MSME has been enhanced from Rs 1,000 crore to Rs 2,500 crore, it added.