PLI Scheme a Boon for Telecom Sector

The cabinet has approved the 1200 crore PLI scheme for the telecom sector including core transmission equipment, 4G/5G next-generation radio access network, and wireless equipment, and enterprise equipment like switches, routers, etc. the scheme will be operational form April 2021.

What is PLI ?

Production-Linked Incentive or PLI scheme is a scheme that aims to give companies incentives on incremental sales (over FY 2019-20) from products manufactured in domestic units.

This scheme helps in inviting foreign companies to set up units in India while also encouraging domestic Mobile Manufacturers to expand their units and presence. According to the scheme, companies that make mobile phones which sell for INR 15,000 or more will receive an incentive of up to 6 percent on incremental sales of all such mobile phones made in India.

Purpose of the scheme 

• One of the major factors of this scheme is to promote manufacturing at home.

•  To acknowledge the relevance of exports in overall growth strategy -to help in protecting the identified product areas.

•  to implement non-tariff barriers measures to make imports more expensive.

Operation and investors 

The scheme will be operational from April 1 this year. The eligibility for the scheme will be subject to achieving a minimum threshold of cumulative investment and incremental sales of manufactured goods.

An investor who qualifies for the scheme will Be incentivized up to 20 times the minimum threshold. This scheme will help in positioning India as a global hub for manufacturing and had created a conducive environment for the ease of doing business.

Benefits for MSMEs 

There are major incentives for micro, small and medium enterprises (MSMEs). The government has proposed 1 percent higher incentive in the first three years and the minimum investment is kept at 10 crores 

Verdict 

The industry has welcomed the move “We congratulate the government on the recently approved PLI for telecom equipment manufacturing. Initiatives like these will help India position itself as a manufacturing hub of the world” said George Paul, chief executive officer of industry body Manufacturers’ Association for Information Technology we welcome the government’s progressive PLI norms to boost local manufacturing of telecom equipment and build India as a global manufacturing hub” said a spokesperson for Nokia. This is definitely going to help the telecom industry.

Written By - Akash verma

Edited By - Vanshu Verma