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Union Cabinet Approves Over Rs 12,000 Crore PLI scheme, pushing local manufacturers for telecom equipment

Union Cabinet Approves Over Rs 12,000 Crore PLI scheme, pushing local manufacturers for telecom equipment, and making India a self-reliant country. The Communications Minister, Ravi Prasad briefed the reporters regarding the new operational scheme in use from the beginning of the next financial year, i.e. 2021-22.


The government of India approved a production-linked incentive of 12,000 crores for the manufacturing of telecom gear and boosting up the production of such equipment by the local manufacturers ahead of the 5G rollouts, the government aims to position the nation as the powerhouse of telecom manufacturing in the global markets.


The Union Cabinet approved the PLI scheme worth Rs. 12,195 crore over 5 years, which would be operational from the commencement of the financial year 2021-2022. The extensive dependence on imports for acquiring telecom equipment was reaching unmatchable heights, the cabinet decided to offload the imports worth Rs.50,000 crore and reinforced it with “Made in India” products.
The government reassured its weightage on complying with all the norms related to the PLI scheme and stated that the decision was taken keeping in mind Prime Minister Narendra Modi’s vision of Atma Nirbhar Bharat which was enforced after facing a hefty crisis during the pandemic.


The approval came after the successful implementation of PLI relating to the mobile and component manufacturers, which observed encouraging results during the peak of the Covid pandemic, the government expressed their views on the same in a press release.


Decisions were given the green light after various consultations with the stakeholders and people concerned with the technological aspect of the Indian economy, adding to the conversation, the eligibility criteria would be subject to receipt of the minimum threshold of the annual incremental investments and incremental sale of the net manufactured commodities.


The vision of the government is peculiar in making India a hub for all telecom-related manufacturing, including the next generation 5G technology. The expectations of the government were such that the scheme would generate Rs 2.4 trillion incremental productions during 5 years, and will bring an investment of Rs 3,000 crore, creating sufficient direct and indirect employment.


“Today’s Cabinet decision is to make India a global hub of manufacturing telecom equipment including core transmission equipment, 4G/5G Next Generation Radio Access Network and Wireless Equipment,” said communications minister Ravi Shankar Prasad.


The scheme was finalized after undertaking successive insights about the handling of core functions while manufacturing the technologically advanced telecom equipment, which would comprise of the next-generation radio access network and wireless equipment, Internet of things(IoT) access devices, and signaling equipment such as switches and router.


The press release further added, the prominent focus would be on providing the incentives through a systematic structure, ranging between 4 to 7 percent for distinctive categories and years. The financial year 2019-2020 will be treated as the base year for computation of the cumulative incremental sales of manufactured goods net of taxes.


Prasad also focused on implementing New PLI Scheme for encouraging the production of laptops and tablet PCs, which compliments the vision of achieving self-efficiency, and glancing out to be the prominent leaders in the global economy.


The minimum investment threshold for the MSMEs has been set up to be Rs. 10 crores with incentives, whereas Rs. 100 crore for the rest of the lot.


This scheme in itself shows a sign of belief in the local manufacturing of goods and services by the Indian government, as the government foresees an opportunity to regain its dominance in the telecom sector.
” Once qualified, the investor will be incentivized up to 20 times of minimum investment threshold enabling them to utilize their unused capacity,” the release added during a news conference on Tuesday.
Once the Coronavirus pandemic emerged in the outskirts of our nation, It became evident that the notion related to self-esteem became more adequate to follow, as there was a complete restriction on any kind of activities either through domestic or through international channels.


The implementation of this scheme has paved our way to surge forward in the field of innovations and make the small-scale industries come out as national champions in the telecom industry.
Gradually, the market has accelerated its activities to retain supremacy in the work ethics, and it was indispensable by the government to help the natives to grow and expand their scale of businesses.
MSMEs need to establish their own identity in the International markets, and for this particular purpose, only the government has ascertained that every manufacturer or the workers in the industry follow the notion of Atma Nirbhar Bharat. The lockdown perceived furlough of employees from the Multinational companies and the withstanding career soon turned out into a vanishing outlay.


Considering the decline in the GDP over the last three quarters of the previous year, the small-scale industries need to bounce back into the groove for the smooth working of the economy on the road to recovery, various sectors and departments hit rock bottom during the pandemic.


The government is initiating its efforts in positioning India as a global powerhouse for manufacturing by providing accessibility to conservative schemes for the betterment of the telecom sector.
Innovative minds could see a generational evolution in the production as well as other sectors, the MSMEs need to seize the moment and look forward to gaining incremental sales during a particular deadline. The introduction of the PLI schemes has created an opportunistic environment and ease of doing business.


The MSMEs contribute remarkably to the GDP and export as they employees 40 percent of the workforce in India, the Prime Minister also underlined the fact that the MSMEs would act as a bedrock for economic growth.


In the coming years, we would discover circumstances where the citizens of India seek the opportunity to extend their self-sufficiency to the international markets and gain an extravagant dominance in the global economy;


Three critical aspects for the success of MSMEs are the Availability of Skilled Labour in MSME clusters, Financial Stability, and Market Competitiveness of their products to both achieve import substitution as well as exports.

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