Tenure for smartphone PLI extended by a year; BharatNet outlay hiked

By: |
June 29, 2021 3:45 AM

With this the total outlay for the project will be Rs 61,109 crore, including the already approved amount of Rs 42,068 crore in 2017.

A total of 10 firms -- 5 global and 5 local – have been selected for the PLI scheme which started in August 2020, and are required to meet set targets for incremental investment and sales over the base year, which is FY20.

The government has extended the tenure of production-linked incentive scheme for smartphones by a year as several manufacturers were unable to meet the first year (FY21) sales target due to Covid-led disruptions. Accordingly, the termination year of the scheme will now be FY26 instead of FY25. However, the outlay, investment and sales targets, base year, and incentive structure will remain the same.

The government has also made an additional allocation of Rs 19,041 crore for the ongoing BharatNet broadband project. With this the total outlay for the project will be Rs 61,109 crore, including the already approved amount of Rs 42,068 crore in 2017. This does not burden the government’s fiscal position as funds for BharatNet are provided from the universal service obligation fund where around Rs 55,000 crore is lying unutilised.

The government also does not lose anything by way of revenue by extending the PLI scheme. The extension will benefit the contract manufacturers of Apple like Foxconn, Rising Star, and Wistron, as well as five domestic manufacturers as they will get to choose any five years of the six year tenure to fulfil their targets. Only South Korean manufacturer, Samsung Electronics has been able to meet the first year sales target and it will get its incentives for the year. In future, it will also have the flexibility to adjust a year for meeting its targets if it wants for any unforeseen reason.

A total of 10 firms — 5 global and 5 local – have been selected for the PLI scheme which started in August 2020, and are required to meet set targets for incremental investment and sales over the base year, which is FY20. The total outlay for smartphone PLI over five years is Rs 40,951 crore and the incentive ranges between 4-6% annually.

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