The Ministry of Electronics and Information Technology (MeitY) plans to start consultative meetings with members of the empowered finance committee (EFC) to consider the option of pushing the deadline for production-linked incentive (PLI) schemes for mobile handset and certain other specified electronic component manufacturing by a year, sources in know of the development told The Indian Express.
The EFC, headed by Chief Executive Officer (CEO) of Niti Aayog Amitabh Kant, also has the secretaries of the Departments of Economic Affairs, Expenditure, Revenue, Department for Promotion of Industry and Internal Trade, MeitY as well as the Directorate General of Foreign Trade on the panel. The committee is likely to start meeting in January on the issue and send its recommendations to the Finance Ministry, the IT Ministry as well as other relevant departments, the sources said.
The demands to push the deadline for PLI in mobile handset and certain other specified electronic component have come from several leading global and domestic component manufacturers, which have, over the past month, made representations to the IT Ministry on the issue.
These companies, sources said, cited the lack of skilled labour and other resources as hindrances in meeting the targets for the first year. These companies also pointed out the paucity of time due to delayed approvals in of requisite land clearances for expanding and setting up new units, according to the sources.
The PLI scheme for making mobile phones and certain other specified electronic components envisages incentives of 4-6 per cent to electronics companies, which manufacture mobile phones and other electronic components such as transistors, diodes, thyristors, resistors, capacitors and nano-electronic components such as micro electromechanical systems.
The PLI scheme will be active for five years with financial year (FY) 2019-20 considered as the base year for calculation of incentives. This means that all investments and incremental sales registered after FY20 shall be taken into account while computing the incentive to be given to each company.
For the first year, the total incentive to be given has been capped at Rs 5,334 crore, while for the second and third year it has been kept at Rs 8,064 and Rs 8,425 crore, respectively. In the fourth year, the incentive will be hiked substantially to Rs 11,488 crore, while in the fifth and final year, the incentive to be distributed has been capped at Rs 7,640 crore. The total incentives over five years has, thus, been kept at Rs 40,951 crore.
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