IT HARDWARE PLI SCHEME (Syllabus: GS Paper 3 - Economy)

News-CRUX-10     31st August 2023        

Context: In a big win for the government’s revised information technology (IT) hardware production-linked incentive (PLI) scheme, a total of 32 companies have expressed interest in commencing manufacturing of personal computers (PCs), laptops, tablets, servers, and edge computing devices within the country.

Key Points

  • Recently, the Union Cabinet approved the modified production linked incentive ( PLI) scheme for information technology (IT) hardware to boost local manufacturing of products like tablets and laptops, and more than doubled its budgetary outlay to ₹ 17,000 crore from the previous provision of ₹ 7,325 crore.
  • The revised scheme may offer incentives of up to 9 per cent on the incremental sales of tablets, laptops, allinone personal computers, servers, and edge computing devices manufactured in the country to attract investment in the sector.
  • The tenure of the scheme has been extended to six years from four years announced in 2021.
  • Only two of the 14 firms that applied for benefits under the scheme´s earlier version could meet their targets in the first year.

PLI Scheme

  • About: PLI scheme is an initiative that provides incentives to domestic industries to boost local production.
    • Through this scheme the Government aims to give companies incentives on incremental sales from products manufactured in domestic units.
    • PLI has been introduced to boost domestic manufacturing and cut down on import bills.
  • Eligibility: A company registered in India that proposes to produce items related to the Target Segments there and submits an application for approval under the Scheme is an applicant for the purposes of the Production Linked Incentives Scheme. 
    • The applicant is permitted to run either brand-new or current production facilities to produce goods for the Target Segments.
  • Sectors Included: Automobile and auto components, electronics and IT hardware, telecom, pharmaceuticals, solar modules, metals and mining, textiles and apparel, white goods, drones, and advanced chemistry cell batteries.
  • Incentives Under the Scheme: The incentives, calculated on the basis of incremental sales, range from as low as 1% for the electronics and technology products to as high as 20% for the manufacturing of critical key starting drugs and certain drug intermediaries.
    • In some sectors such as advanced chemistry cell batteries, textile products and the drone industry, the incentive to be given will be calculated on the basis of sales, performance and local value addition done over the period of five years.
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