Cabinet approves PLI scheme for telecom sector

• Production Linked Incentive (PLI) is an outcome and output-oriented scheme where incentives are disbursed only after production has taken place in the country.

About:

• New scheme would be implemented by Department of Telecommunications (DOT).

• This move is part of a previously planned expansion of the PLI scheme’s success in mobile devices and electronic components, medical devices, and active pharmaceutical ingredients.

• It aims to make India a global hub of manufacturing telecom equipment.

Salient features of scheme:

• Investor will be incentivized up to 20 times of minimum investment threshold enabling them to utilize their unused capacity.

• Incentive structure ranges between 4% and 7% for different categories and years.

Sectors included:

• Core transmission equipment,

• 4G/5G next-generation Radio Access Network and Wireless Equipment,

• Access & Customer Premises Equipment,

• Internet of Things Access Devices,

• Other Wireless Equipment and Enterprise equipment like Switches, Routers etc.

• Minimum Investment threshold for MSME is Rs. 10 Crores and for others Rs. 100 Crores.

• Financial Year 2019-20 shall be treated as Base Year for computation.

Significance of scheme:

• Offsetting the huge import of telecom equipment worth.

• Reinforcing with “Made in India” products.

• Generate direct, indirect employment and tax revenue.

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Mains Paper 3: Economy

Prelims level: Production Linked Incentive

Mains level: Salient features and significance of the scheme

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