Govt extends production-linked sops to pharma, IT hardware
The Union Cabinet on Wednesday cleared two production-linked incentive (PLI) schemes for the pharmaceutical industry and IT hardware products like laptops, tablets, personal computers and servers.
The scheme for the pharmaceuticals is for six years up to 2027-28 while one for the hardware is for four years that will cost the exchequer Rs 7350 crore.
Briefing the media on the cabinet decisions, Law and IT minister Ravi Shankar Prasad said 10 target sectors in the IT industry were identified as a follow up to the incentive granted to the mobile manufacturers that brought in 22 applications involving investment of Rs 13,500 crore.
He said this comes close to the PLI scheme for telecom and networking products approved by the cabinet last week. The scheme envisages incentives ranging from 1% to 4% on the net incremental sales, with 2019-20 as base year) of goods manufactured in India and covered under the target segments.
Prasad said this will help the domestic industry in the areas where huge reliance today is on imports.
PLI Scheme is conceived in a manner that incentives are payable by government only after investment has been done, employment has been generated, production and sales targets have been met, he said. He expects that over the next four years, the scheme will lead to production up to Rs 3.26 lakh crore by fiv global and 10 national companies.
Prasad pointed out that currently the laptop and tablet demand in India is largely met through imports of Rs 29,470 crore (USD 4.21 billion) and Rs 2870 crore (USD 0.41 billion) respectively.
He said PLI Schemes will help in making India a globally competitive destination for electronics manufacturing and create domestic champions to further our mission of achieving an AtmaNirbhar Bharat.
PHARMA BOOST: The PLI scheme for pharmaceuticals will benefit domestic manufacturers, help in creating employment and is expected to contribute to the availability of wider range of affordable medicines for consumers. The scheme is expected to promote the production of high value products in the country and increase the value addition in exports.
Total incremental sales of Rs.2,94,000 crore and total incremental exports of Rs.1,96,000 crore are estimated during six years from 2022-23 to 2027-28.
The Scheme is expected to bring in investment of Rs.15,000 crore in the the pharmaceutical sector.
The manufacturers in the pharmaceutical sector will be divided into three groups of A, B and C, based on their global manufacturing revenue of more than Rs 5,000 crore, Rs 500 to Rs 5,000 crore and less than Rs 500 crore respectively.
The total grant of incentives is about Rs 15,000 crore, which includes Rs 11,000 crore to Group A, Rs 2,250 crore to Group B and Rs 1,750 to Group C. If the incentives of Group B applications are left underutilised, the balance will be moved to Group A.