Cabinet approves Production Linked Incentive Scheme - 2.0 for IT Hardware

Tags: National Economy/Finance National News

The Union Cabinet, chaired by the Prime Minister Narendra Modi on 17th May approved the Production Linked Incentive Scheme 2.0 for IT Hardware with a budgetary outlay Rs 17,000 crore.

An overview of the news

• Electronics manufacturing in India has seen a steady growth with a CAGR (Compound Annual Growth Rate) of 17% in the last 8 years.

• This year it crossed a major benchmark in production of USD 105 billion (about Rs 9 lakh crore).

• India has become the second largest mobile phone manufacturer in the world.

• Mobile phone exports have crossed a major milestone of US $ 11 billion (about Rs 90 thousand crore) this year.

• The global electronics manufacturing ecosystem is coming to India, and India is emerging as a major electronics manufacturing country.

Features of PLI Scheme 2.0 for IT hardware

• It covers laptops, tablets, all-in-one PCs, servers and ultra small form factor devices.

• The tenure of this scheme is 6 years.

• Expected incremental production is Rs 3.35 Lakh crore.

• Expected incremental investment is Rs 2,430 crore.

• Expected incremental direct employment is 75,000.

What is Production Linked Incentive Scheme?

• It is an initiative that provides incentives to domestic industries to promote production at the local level.

• Through this scheme, the government aims to incentivize companies to increase the sales of manufactured products in domestic units.

• The objective of the scheme is to make domestic manufacturing globally competitive and to become a global champion in manufacturing.

• The government has launched this scheme with an outlay of around Rs 2 lakh crore for 14 sectors including Automobiles and Auto Components, White Goods, Pharma, Textiles, Advanced Chemistry Cell and Specialty Steel.