Cabinet approves PLI Scheme for IT hardware & pharma sectors

February 24, 2021

The Union Cabinet has approved the production-linked Incentive scheme for IT Hardware on February 24, 2021.

Key Facts

The PLI scheme proposes an incentive to boost the domestic manufacturing.
It also proposes to attract large investments in value chain of IT Hardware.
The proposed scheme includes the target segments like tablets, laptops, all-in-one PCs and servers.
Total cost of the proposed scheme is around Rs.7,350 crore for 4 years.
The budget includes an incentive outlay of Rs.7,325 crore besides the administrative charges of Rs 25 crore.
Under the scheme, a total production of worth Rs 3,26,00 crore will be achieved out of which 75 per cent will be achieved through the exports.
This scheme has a potential to generate direct and indirect employment of over 1,80,000 in over 4 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% – 25% by 2025.

Why this scheme was launched?

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

PLI in Pharma sector

Government has also extended the PLI scheme of worth Rs 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 $40 billion and it contributes around 3.5 per cent to the global market. But the high-end patented drugs are still imported. The extension of PLI Scheme to pharmaceuticals will make it globally competitive.

About PLI Scheme

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

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