Production Linked Incentive Scheme (PLI) | UPSC
Production Linked Incentive Scheme (PLI) to herald a new era in mobile phone and electronic components manufacturing.
WHY IN NEWS:
Hot from PIB !
SYLLABUS COVERED: GS 3: Schemes
For PRELIMS go through aim , incentive , funding , outlay and the beneficiaries. Do not forget the ministry !
For MAINS what are issues Indian Mobile companies are facing ?
PRODUCTION LINKED INCENTIVE SCHEME (PLI)
The sector suffers disability of around 8.5% to 11% on account of :
- Lack of adequate infrastructure
- Domestic supply chain and logistics
- High cost of finance
- Inadequate availability of quality power
- Limited design capabilities and focus on R&D by the industry;
- Inadequacies in skill development.
- Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing was notified on 1st April,2020.
- This resonates strongly with Prime Minister’s clarion call of AtmaNirbhar Bharat – a self-reliant India.
- The vision of National Policy on Electronics 2019 (NPE 2019) is to position India as a global hub for Electronics System Design and Manufacturing (ESDM).
- This is by encouraging and driving capabilities for developing core components in the country
- This will creating an enabling environment for the industry to compete globally.
- This will attract large investments in mobile phone manufacturing.
TARGET SEGMENTS ELIGIBLE UNDER PLI SCHEME
► Mobile Phones
► Specified Electronic Components
- SMT components
- Discrete semiconductor devices including transistors, diodes, thyristors, etc.
- Passive components including resistors, capacitors, etc. for electronic applications
- Printed Circuit Boards (PCB), PCB laminates, prepregs, photopolymer films, PCB printing inks
- Sensors, transducers, actuators, crystals for electronic applications
- System in Package (SIP)
- Nano Electromechanical Systems (NEMS)
- Assembly, Testing, Marking and Packaging (ATMP) units
TENURE OF THE SCHEME
- Incentive of 4% to 6% on incremental sales (over base year) of goods manufactured in India.
- Total Incentive: The expected annual incentive outlay and cumulative incentive outlay under the
Scheme is as follows,
INCENTIVE PER COMPANY
- The incentive per company will be applicable on incremental sales of manufactured goods (as distinct from traded goods).
- Also it will be subjected to base year to ceilings as decided by the Empowered Committee.
- Eligibility shall be subject to thresholds of incremental investment and incremental sales of manufactured goods.
SOURCES : INVEST INDIA
APPROVAL AND DISBURSEMENT PROCESS
- An initial application, complete in all aspects, will have to be submitted before the due date.
- Acknowledgement will be issued after initial scrutiny of the application by MEITY.
- The Scheme is open for applications for a period of 4 months initially which may be extended.
- Financial Year 2019-20 shall be treated as the base year for computation of incremental investment.
- EXPECTED OUTCOMES : Production of Rs. 10.5 lakh crore and Exports of Rs. 6.5 lakh crore expected over next 5 years.
- NATIONAL PLAYERS : Indian companies include Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics
- INTERNATIONAL PLAYERS : The international mobile phone manufacturing companies ; Samsung, Foxconn Hon Hai, Rising Star, Wistron and Pegatron.
- GLOBAL SHARE : Apple (37%) and Samsung (22%) together account for nearly 60% of global sales revenue of mobile phones.
- PROMINENCE : This scheme is expected to increase their manufacturing base manifold in the country.
- VOCAL TO LOCAL : Creation of domestic champion companies in electronics manufacturing under the Scheme will give fillip to vocal for local while aiming for global scale.
- DOMESTIC VALUE ADDITION : It is expected to grow from the current 15-20% to 35-40% in case of Mobile Phones and 45-50% for electronic components.
- EMPLOYMENT : The companies approved under the scheme will generate more than 2 lakh direct employment opportunities in next 5 years.
- The National Policy on Electronics 2019 envisions positioning India as a global hub for Electronics System Design and Manufacturing (ESDM).
- National policy on Electronics focuses on size and scale, promoting exports at international level.
- PLI scheme has been huge success in terms of the applications received from Global as well as Domestic Mobile Phone manufacturing companies .
- India has witnessed an unprecedented growth in electronics manufacturing in the last five years.
- This will further give a major boost to Prime Minister’s Make in India and AtmaNirbhar Bharat.