Production Linked Incentive (PLI) Scheme for IT Hardware

Context: 

The Union Cabinet approved an updated Production Linked Incentive (PLI) scheme for IT hardware manufacturing, with the total budgetary outlay more than doubled to ₹17,000 crore.

New updates in the Scheme:

• The incentive had been increased to 5%. 
• An “additional op­tional incentive” has also been introduced for using domestically produced components. However, rates of these optional incentives are not specified yet.

PLI Scheme for IT Hardware:

• Launch year: 2021.
• Target Segments:  Laptops, Tablets, All-in-One PCs and Servers.
• Rate of incentives: The Scheme shall extend an incentive of 4% on net incremental sales (over base year i.e. 2019-20) of goods manufactured in India and covered under the target segment, to eligible companies, for a period of four years.
• Funding: The total cost of the scheme is approximately Rs.7,350 crore over 4 years, which includes an incentive outlay of Rs.7,325 crore and administrative charges of Rs.25 crore
• Employment: The scheme has an employment generation potential of over 1,80,000 (direct and indirect) over 4 years.
• Value Addition: The scheme will provide impetus to Domestic Value Addition for IT Hardware which is expected to rise to 20% – 25% by 2025.

Key Points on Electronics Manufacturing:

• Electronics manufacturing in India has witnessed consistent growth with 17% CAGR in the last 8 years.
• This year it crossed a major benchmark in production- $105 billion.
• Telecom hardware manufacturing had exceeded the projected ₹900 crore and reached ₹1,600 crore.
• India crossed $11 billion in mobile phone exports, and was now the second largest mobile handset maker behind China.

News Source: The Indian Express