PLI scheme for IT hardware reworked after lukewarm response from firms
The government may soon announce a revised version of the production-linked investment (PLI) scheme for large-scale manufacturing of laptops, tablets, servers, and other IT hardware after the earlier incentive plan generated little interest from businesses
New Delhi: The government may soon announce a revised version of the production-linked investment (PLI) scheme for large-scale manufacturing of laptops, tablets, servers, and other IT hardware after the earlier incentive plan generated little interest from businesses. Although the government approved the participation of over a dozen companies in the previous scheme, total investments amounted to only about ₹123 crore as of June, far short of the projected investments of ₹2,500 crore.
“The issues with the PLI in IT hardware have been resolved, and a committee comprising officials from MeitY (ministry of electronics and information technology) and DPIIT (department for the promotion of industry and internal trade) has recommended it for approval. We have increased the list (of items eligible for incentives), which should attract more interest from investors. The final decision will be taken by the cabinet,” a government official said.
The proposed changes to the PLI scheme would increase the overall average incentive rate to a range of 5.28% to 5.34% for domestic and global companies, up from the current rate of 2.21% for both categories, by including manufacturing components.
Under the proposed PLI scheme, companies that manufacture batteries and printed circuit board assemblies locally would receive an additional incentive of 1.25%. If they also manufacture power modules locally, the incentive rate increases by 2.25%. The inclusion of local cabinet or chassis manufacturing would bring the total incentive rate to 5.75% for global companies at the end of the fifth year. A senior official said that the proposed structure, which has been approved by a government committee including officials from MeitY and DPIIT, is expected to increase participation and investments.
Global IT hardware firms have requested that the government remove the minimum investment requirement for eligibility to receive incentives and linking the incentives to production from existing manufacturing facilities. The companies argue that the investment criteria have acted as a barrier to entry into the scheme.
“Ideally, the investment criteria should be removed from the PLI scheme, and we should keep the focus on catalysing production,” the industry representing large IT hardware makers said in a communication in early December.
It is unclear whether the demands for delinking investments have been agreed to by the government in the revised policy. Queries sent to the spokespeople for the ministry of commerce and industry and the MeitY remained unanswered till press time.
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Business NewsEconomyPLI scheme for IT hardware reworked after lukewarm response from firms
First Published:25 Dec 2022, 10:40 PM IST
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