Telecom equipment PLI: Selected firms’ investment, production starting Apr 1 to be taken into account

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June 02, 2021 12:15 AM

The response from DoT came after certain firms expressed apprehension that the delay in issuance of guidelines could mean a smaller window for meeting the targets as two months of the new fiscal have already passed and the selection process of the companies has not started in the absence of guidelines.

“We are trying to issue the guidelines this week. But for companies, it should not be a concern as they can plan their investment and production for the PLI scheme and selected companies will get the benefit effective April 1,” sources in DoT told FE.“We are trying to issue the guidelines this week. But for companies, it should not be a concern as they can plan their investment and production for the PLI scheme and selected companies will get the benefit effective April 1,” sources in DoT told FE.

As the guidelines for the production-linked incentive (PLI) scheme for telecom equipment have not been notified yet, the department of telecommunications (DoT) has clarified that incremental investment and production starting April 1 for the companies which would be selected will be taken into account.

The response from DoT came after certain firms expressed apprehension that the delay in issuance of guidelines could mean a smaller window for meeting the targets as two months of the new fiscal have already passed and the selection process of the companies has not started in the absence of guidelines.

“We are trying to issue the guidelines this week. But for companies, it should not be a concern as they can plan their investment and production for the PLI scheme and selected companies will get the benefit effective April 1,” sources in DoT told FE.

The sources highlighted that over the past few weeks, a lot of senior officials dealing with the PLI scheme, have either been themselves down with Covid-19 or some members of their families have been affected. Also, a senior officer handling the scheme has been given additional charge in the health ministry to coordinate oxygen supply, which is leading to the delay in the finalisation of the guidelines.

So far, leading global telecom equipment manufacturers like Cisco, Nokia, Ericsson, Jabil, and contract manufacturers, Flex, Dixon Technologies and Foxconn have indicated their desire to apply for the scheme, which became effective April 1. The companies can formally apply once the guidelines are notified.

The scheme, with an outlay of Rs 12,195 crore, offers incentives in the range between 4% and 7% for different categories and years. For MSMEs, a 1% higher incentive is proposed in year 1, year 2 and year 3. The financial year 2019-20 will be treated as the base year for computation of cumulative incremental sales of manufactured goods net of taxes.

According to sources, the DoT has framed the draft guidelines for the scheme in such a manner that companies committing higher investments would stand a better chance to qualify for it. The minimum investment threshold for MSMEs has been kept at Rs 10 crore and for others at Rs 100 crore. The scheme is expected to bring an investment of over Rs 3,000 crore. The DoT plans to select a total of 20 companies under the scheme – 10 from the micro, small and medium enterprises (MSMEs) and 10 from the general pool which may see global telecom vendors like Nokia, Ericsson, etc.

Telecom equipment that would get covered under the scheme, includes core transmission equipment, 4G/5G next-generation radio access network and wireless equipment, access and customer premises equipment (CPE), Internet of things (IoT) access devices, other wireless equipment and enterprise equipment like switches, routers etc.

The scheme is expected to offset huge imports of telecom equipment worth more than Rs 50,000 crore and reinforce it with Made-in-India products both for domestic markets and exports.

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