Govt notifies PLI scheme for telecom equipment

Under the scheme a maximum of 10 companies will be selected in MSME category and a similar number in the non-MSME category. Of the 10 selected companies in the non-MSME category, at least 3 need to be domestic firms.

The department of telecommunications on Thursday notified the guidelines for the production-linked incentive (PLI) scheme for telecom equipment and interested companies can now start submitting their applications from June 4 till July 3.

Under the scheme a maximum of 10 companies will be selected in MSME category and a similar number in the non-MSME category. Of the 10 selected companies in the non-MSME category, at least 3 need to be domestic firms.

The applications will be shortlisted from highest to lowest on the basis of committed cumulative incremental investment during the scheme period. FE had earlier reported that commitment investment will be a key criterion to select companies for the scheme.

The PLI scheme will be implemented within the overall financial limits of Rs 12,195 crore over a period of 5 years. For MSME category, financial allocation will be Rs 1,000 crore. Small Industries Development Bank of India (SIDBI) has been appointed as the Project Management Agency (PMA) for the PLI scheme.

The minimum investment threshold for MSMEs has been kept at Rs 10 crore and for others at Rs 100 crore. As per the guidelines, the selection is subject to total incentive on maximum eligible sales for all applicants in respective categories being within the overall financial limit of Rs 12,195 crore over a period of 5 years. In case the total incentive payable on maximum eligible sales based on committed total investment is more than the financial limit for respective categories, the number of applicants to be selected will be reduced accordingly.

Land and building cost will not be counted as investment. Eligibility shall be further subject to incremental sales of manufactured goods over the base year (FY2019-20).

The scheme will be effective from April 1, 2021 and investment made by successful applicants in India from April, 2021 onwards and up to financial year 2024-2025 shall be eligible, subject to qualifying incremental annual thresholds. The support under the scheme shall be provided for a period of five years from FY 2021-22 to FY 2025-26.

It is estimated that full utilisation of the scheme funds is likely to lead to incremental production of around Rs 2.4 lakh crore with exports of around Rs 2 lakh crore over 5 years. It is also expected that the scheme will bring investment of around Rs 3,000 crore and generate huge direct and indirect employment.

As is known, incentives under the scheme ranges between 4% and 7% for different categories and years. For MSMEs, 1% higher incentive is proposed in year 1, year 2 and year 3. Financial year 2019-20 will be treated as the base year for computation of cumulative incremental sales of manufactured goods net of taxes.