The government on Wednesday approved production-linked incentive (PLI) scheme of Rs 12,195 crore for telecom equipment manufacturing.

MSMEs and made in India technology will get a preference over foreign companies in the telecom and networking equipment manufacturing incentive scheme that India proposes to launch from April 1 this year, said an official statement.

The union cabinet headed by Prime Minister Narendra Modi approved fine print of the Production Linked incentive (PLI) scheme for the sector that will see Rs 12195 crore worth of incentives being doled out over the next 5 years.

The government funded PLI programme seeks to create global companies in select sectors, it said.

Selected companies will have to commit investments spread over half a decade and also ensure incremental sales over the base year of 2019-20 to get incentives.

"The Cabinet has approved production-linked incentive (PLI) scheme for telecom equipment manufacturing worth Rs 12,195 crore. The government expects that the scheme will lead to Rs 2,44,200 crore incremental production of telecom equipment in the country in the next five years," said Information Technology and Communications Minister Ravi Shankar Prasad.

Prasad said that the government is positioning India as a global powerhouse for manufacturing, and has created a conducive environment for ease of doing business.

He added that soon the government will come up with a PLI scheme to encourage production of laptops and tablet PCs.

"There will be a minimum investment threshold of Rs.10 crore for MSME with incentives from 7% to 4 % and Rs. 100 crore for others with incentives from 6% to 4 % over 5 year above Base Year," the government said in a press release.

Speaking to CNBC TV18, Telecom secretary Anshu Prakash said that a panel of officers will choose from applications for the incentive scheme.

"Criteria for selection for PLI include value addition, MSME, Make in India and Indian technology. In Fact a special allocation will be earmarked for MSMEs " he told your channel.

Prakash also added that the commited investments can't be used to buy land by selected companies. "It has to be in plant , machinery and capital goods" he said.

The companies will be allowed to make the investments in one go or over a 5 year period.

The Telecom secretary also added that the PLI scheme will help in using existing over capacity in the companies engaged in telecom manufacturing.

" There will not be any distinction between Greenfield or brownfield Companies" he told CNBC TV18

The government estimates that the new PLI scheme on telecom equipment will lead to Incremental production of Rs 2 Lakh crore over the next 5 years.

"It is expected that scheme will bring more than Rs. 3,000 crore investment and generate huge direct and indirect employment," the government said in a press release.

The government had approved applications from several medical devices manufacturers under the scheme for promotion of domestic manufacturing on February 11.

The companies whose applications were approved include Sahajanand Medical Technologies, Siemens Healthcare, Nipro India Corporation and Wipro GE Healthcare, according to a Ministry of Chemicals and Fertilizers statement.

The ministry said that setting up of these plants will lead to a total committed investment of Rs 729.63 crore by the companies and employment generation for nearly 2,304 people.

"The commercial production is projected to commence from April 1, 2022 and the disbursal of production linked incentive by the Government over the five years period would be up to a maximum of Rs 121 crore per applicant per target segment," the ministry had said.

First Published:Feb 17, 2021 4:30 PM IST