Topics Covered: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
Production-linked incentive scheme:
Context:
The Union Cabinet has approved the production-linked incentive scheme for the telecom sector with an outlay of ₹12,195 crore over five years.
- The implementation scheme will start from April 1, 2021.
Significance:
- The scheme is expected to encourage production of equipment worth Rs 2.44 lakh crore and create direct and indirect employment for about 40,000 people.
- The scheme is expected to bring investment of over Rs 3,000 crore and generate significant direct and indirect employment and taxes both.
About the PLI scheme:
- The scheme aims to make India a global hub for manufacturing telecom equipment.
- Its eligibility criteria include achievement of a minimum threshold of cumulative incremental investment and incremental sales of manufactured goods.
- The incentive structure ranges between 4% and 7% for different categories and years. Financial year 2019-20 will be treated as the base year for computation of cumulative incremental sales of manufactured goods net of taxes.
- Minimum investment threshold for MSMEs has been kept at Rs 10 crore and for others at Rs 100 crore.
- Once qualified, the investor will be incentivised up to 20 times of minimum investment threshold enabling them to utilise their unused capacity.
InstaLinks:
Prelims Link:
- Production linked incentive scheme- when was it announced?
- Incentives under the scheme is available to?
- What kind of investments will be considered?
- Duration of the scheme.
- Who will implement it?
Mains Link:
What is the production linked incentive scheme for electronics manufacturers? Discuss.
Sources: PIB.
