PLI 2.0 FOR IT HARDWARE SCHEME - GOVERNANCE
News: Cabinet clears ₹17,000 cr-IT
Hardware PLI Scheme 2.0
What's in the news?
● The
Cabinet, chaired by Prime Minister Narendra Modi approved the Production
Linked Incentive (PLI) Scheme 2.0 for IT Hardware with a budgetary outlay
of ₹17,000 crore.
Key takeaways:
● Electronics
manufacturing in India has witnessed consistent growth with a 17% compound annual growth rate (CAGR)
in the last 8 years to cross a major benchmark in production — $105 billion
(about ₹9 lakh crore) — this year.
PLI 2.0 for IT Hardware:
Objective:
● Scale
up domestic manufacturing capability.
● Increase
import substitution and Generate employment.
Budget -
₹17,000 crore
Tenure
- 6 years (2023-24 to 2029-30)
Nodal Ministry: Union
Minister for IT and Telecom
Coverage:
● PLI
Scheme 2.0 for IT hardware covers laptops,
tablets, all-in-one PCs, servers and ultra-small form factor devices.
Incentives provided:
● Incentives
Calculated based on incremental sales.
● Range from 1% to 20%
depending on the industry.
● In
some sectors such as advanced chemistry cell batteries, textile products and
the drone industry, the incentive is on the basis of sales, performance and
local value addition done over the period of five years.
Significance:
● Expected
incremental production of ₹3.35 lakh crore.
● Expected
incremental investment of ₹2,430 crore.
● Create
incremental direct employment for 75,000 people during the scheme period.
Go back to basics:
● India
has become the world's second-largest
manufacturer of mobile phones. Exports of mobile phones crossed a major
milestone of $11 billion (about ₹90 thousand crore) in March 2023.
● The
government in February 2021 approved the PLI scheme for IT hardware, covering
the production of laptops, tablets, All-in-One PCs and servers with an outlay
of ₹7,350 crore.
● PLI
Scheme, launched in April 2020 with a focus on mobile phone production, has
given a massive boost to electronics manufacturing in the country.
Sectors targeted in PLI:
● Initial
Targeted Industries was Mobile and allied Component Manufacturing, Electrical
Component Manufacturing, and Medical Devices.
● Now
expanded to Automobile and auto components, Electronics and IT hardware,
Telecom, Pharmaceuticals, Solar modules, Metals and mining, Textiles and
apparel, White goods, Drones, Advanced chemistry cell batteries and other
sectors as well.