The Union Cabinet has cleared three schemes involving a total incentive of around Rs 48,000 crore to boost electronics manufacturing in the country. The Central government is expecting to generate manufacturing revenue potential of Rs 10 lakh crore and create direct and indirect jobs for 20 lakh people by 2025 through these schemes.
Besides, the Union Cabinet also approved incentives for medical devices to reduce dependency on import of electronics products for medical care in the country. The Centre has approved production-linked-incentive (PLI) for electronics companies. It will give Rs 40,995 crore in coming five years for PLI.
Under the scheme, electronics manufacturing companies will get an incentive of four to six percent on incremental sales (over base year) of goods manufactured in India and covered under target segments to eligible companies over a period of next five years.
The National Policy for Electronics 2019 envisions India to reach a mobile phone production of USD 190 billion by 2025, of which USD 110 billion would be exported. PLI is the policy intervention to support ambition to build the electronics sector, where the main focus remains on manufacturing of mobile phones and components.
The Union Cabinet approved the scheme for promotion of manufacturing of electronics components and semiconductors with a budget outlay of Rs 3,285 crore spread over a period of eight years. It also approved revised version for electronics manufacturing clusters with a total incentive outlay of Rs 3,762.25 crore spread over a period of eight years with an objective to create 10 lakh direct and indirect jobs under the scheme.
The government estimates that PLI scheme, domestic value addition for mobile phones is expected to rise to 35-40 percent by 2025 from the current level of 20-25 percent and generate additional eight lakh jobs, both direct and indirect. This incentive is linked to production and investment in India.
The government estimates that push for manufacturing of electronics components and electronic chips will create around six lakh direct and indirect jobs.
The electronics manufacturing cluster (EMC) 2.0 scheme will provide financial assistance up to 50 percent of the project cost subject to a ceiling of Rs 70 crore per 100 acres of land for setting up electronics manufacturing cluster projects.
The electronic manufacturing clusters will be spread over an area of 200 acre across India and 100 acre in the North-East part of the country. Whoever will make investment of Rs 300 crore under this scheme will be given incentives.