Electronics manufacturing: Govt notifies three incentive schemes; likely to create lakhs of jobs

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April 2, 2020 12:57 PM

The schemes are expected to create large scale electronics manufacturing in the country and open tremendous employment opportunities.

manufacturing, electronics manufacturing, electronics part, electronics scheme, product linked incentiveThe schemes that altogether offer incentives of nearly Rs 48,000 crore, were cleared by the cabinet last month. (Bloomberg image)

Under Make in India and Assemble in India campaigns, the ballooning electronics manufacturing sector has received an additional boost from the government. The Ministry of Electronics and Information Technology has notified the three schemes to grow electronics manufacturing in the country. The schemes that altogether offer incentives of nearly Rs 48,000 crore, were cleared by the cabinet last month. These include the promotion of manufacturing of electronic components and semiconductors, Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme, and Production Linked Incentive Scheme for large scale electronics manufacturing. The government’s notification states that the incentives for these schemes will be rolled out from 1st August and will initially be open for four months.

The largest portion of the incentives, Rs 40,000 crore, will be allocated to the production-linked incentive scheme. “The PLI scheme shall extend an incentive of 4% to 6% on incremental sales (over the 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 cabinet had said. This scheme will be initially rolled out for mobile phones and specified electronic components.

According to the notification, the companies making phones of more than Rs 15,000 and which will make a cumulative investment of Rs 1,000 crore over the next four years will qualify for an incentive of 6 per cent for the first two years followed by 5 per cent for the next two and 4 per cent in the fifth year. 

Development in the manufacturing sector directly affects the employment statistics and this scheme is expected to generate up to 8 lakh jobs over the next five years. Among these, 2 lakh jobs are expected to be generated through direct employment while 6 lakh jobs are estimated to be generated through indirect employment. It is also expected that the scheme would lead to large scale electronics manufacturing in the country and open tremendous employment opportunities.

Meanwhile, the share of India in the global electronics manufacturing market is on a rise. In 2012, India manufactured 1.3 per cent of the world’s electronics products, which has increased to 3 per cent in 2018, according to the MoEIT. Also, the production of mobile phones in the country has skyrocketed from around Rs 18,900 crore in FY15 to Rs 1.7 lakh crore in FY19. On top of it, the domestic demand is almost fulfilled by domestic production.

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