Cabinet approves Rs.40,995 crore scheme
Global mobile phone manufacturers are set to benefit from a Rs.40,995 crore incentive scheme approved by the Cabinet on 21 Mar 2020.
The proposed scheme is likely to benefit 5-6 major global players and few domestic champions, in the field of mobile manufacturing and Specified Electronics Components and bring in large scale electronics manufacturing in India, said the Cabinet.
It has approved the Production Incentive Scheme (PLI) for Large Scale Electronics Manufacturing to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components including Assembly, Testing, Marking and Packaging (ATMP) units.
The scheme proposes production linked incentive of 4% to 6% on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies, for a period of five years subsequent to the base year as defined.
The total cost of the proposed scheme is approximately Rs.40,995 crore which includes an incentive outlay of approximately Rs.40,951 crore and administrative expenses to the tune of Rs.44 crore.
The scheme has a direct employment generation potential of over 200,000 jobs over 5 years.
However, it is expected that the scheme would lead to large scale electronics manufacturing in the country and open tremendous employment opportunities.
Indirect employment will be about 3 times of direct employment as per industry estimates. Thus, total employment potential of the scheme is approximately 800,000.
The production of mobile phones in the country has gone up significantly to Rs.170,000 crore (US$24 billion) in 2018-19 from around Rs.18,900 crore (US$3 billion) in 2014-15. The domestic production is meeting domestic demand for mobile phones.
Electronic components are the basic building blocks for electronics manufacturing.
According to the Electronic Industries Association of India (ELCINA), the electronic components market in India has increased to Rs.131,832 crore (US$20.8 billion) in 2018-19 from Rs.68,342 crore (US$11 billion) in 2015-16.
Domestic production of electronic components is valued at approximately Rs.63,380 crore, of which around Rs.48,803 crore is domestically consumed. fiinews.com
