The Union Cabinet of India chaired by PM Modi has formally approved the production-linked Incentive (PLI) scheme for IT Hardware on 24th February 2021.

  • It proposes an incentive to boost the domestic manufacturing.
  • The PLI scheme also proposes to attract large investments in value chain of IT Hardware.
  • It includes the target segments like tablets, laptops, all-in-one PCs and servers.
  • Total cost of the proposed scheme is around Rupees 7,350 crore for four years.
  • The budget includes an incentive outlay of Rupees 7,325 crore besides the administrative charges of Rupees 25 crore.
  • Under the PLI scheme, a total production of worth Rupees 3,26,00 crore will be achieved out of which 75% will be achieved through the exports.
  • It has a potential to generate direct and indirect employment of over 1,80000 in over four years.
  • It will provide also provide impetus to Domestic Value Addition for IT Hardware for which there is an expectation that it will rise to 20 per cent – 25 per cent by 2025.

Significance of the scheme

Currently, laptops of worth Rupees 30,000 crore and tablets worth Rupees 3,000 crore are sold in India. Out of them, 80% of are imported. Thus, this new production-linked Incentive scheme was launched with which, government hopes to pull the top 5 global companies to India which controls 50% of the international market.

PLI scheme in Pharma sector

Government of India has also extended the PLI scheme of worth Rupees 15,000 crore for pharmaceuticals. This move was taken in order to reduce the imports and boost the domestic production. Currently, the Indian pharmaceutical industry is US$ 40 billion and it contributes around 3.5% to the global market. But the high-end patented drugs are still imported. The extension of production-linked Incentive Scheme to pharmaceuticals will make it globally competitive.

Production-linked Incentive Scheme

PLI scheme is an outcome oriented as well as output-oriented scheme in which the incentives are paid only if the manufacturers make the goods. The scheme provides cash incentives for 5 to 7 years. Under the PLI scheme all the important sectors are covered ranging from automobiles, food processing, advanced chemistry, Pharma, Solar PV manufacturing etc.

PLI Scheme for IT hardware & pharma sectors PLI Scheme for IT hardware & pharma sectors