PRODUCTION LINKED INCENTIVE (PLI) SCHEME- ELECTRONIC MANUFACTURING COMPANIES
In a latest development, the Ministry of Electronics and Information Technology (hereinafter referred to as ‘MeitY’) has given approval to 16 mobile companies[1] under the Production Linked Incentive (PLI) Scheme. In a wave to encourage local manufacturing and Made in India campaign, Dr Rajiv Kumar, Chairman of Niti Aayog has also stated that India may soon introduce PLI Scheme for 9-10 sectors[2].
What is Production Linked Incentive Scheme (PLI)?
The Ministry of Electronics and Information Technology (hereinafter referred to as ‘MeitY’) vide its notification dated April 01, 2020[3] introduced two new incentive schemes, namely:
- Production Linked Incentive Scheme (‘PLIS’)
- Scheme for Promotion of manufacturing of Electronic Components and Semiconductors (hereinafter referred to as ‘SPECS’)
Production Linked Incentive Scheme (‘PLI’)
PLI Scheme aims at providing production based incentives to such companies involved in manufacturing of mobile phones and specified electronic components in India.
The Scheme has been floated to provide financial incentive to large scale electronic manufacturing companies to boost domestic manufacturing and attract large investments in the electronics value chain including electronic components and semiconductor packaging.
Duration of PLI Scheme- The PLIScheme is open for applications for a period of 4 months initially and may be extended later.
For more information related to PLIS scheme- please click here.
Application under the PLIS Scheme can be filed https://pli.ifciltd.com/
Time Period and its Break-up[4]
The PLI scheme is planned for a 5-year term with the FY 2019-20 counted as the base year. Thus, any investments and incremental sales registered after the base year will be considered at the time of calculating the incentives to the company. The chart represents the break-up of the incentives provided under the scheme:
| Year | Incentive (in crores) |
| First | Rs. 5,334 |
| Second | Rs. 8,064 |
| Third | Rs. 8,425 |
| Fourth | Rs. 11,488 |
| Fifth | Rs. 7,640 |
| Total | Rs. 40,951 |
It is worth mentioning that the global companies manufacturing smartphones in India will receive an incentive up to 6% on the same of Rs 15,000 crore or more. On the other hand, the Indian companies manufacturing smartphones in India will receive an incentive of Rs. 200 crore for the next 4 years.
The electronic manufacturing industry Shri Ravi Shankar Prasad, Minister of Electronics & IT, Communication, Law and Justice in this context also remarked that the PLI Scheme floated by the Union Cabinet in April this year has been a huge success in terms of applications received for availing incentives under the Scheme by global as well as domestic mobile companies and electronic components manufacturers.
[3] https://pib.gov.in/PressReleasePage.aspx?PRID=1607487
[4] https://www.jagranjosh.com/general-knowledge/pli-scheme-by-meity-1596528663-1
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