Government Plans To Allocate Rs 40,000 Crore for Electronics Component Manufacturing Scheme: Report

The government is said to have plans to allocate Rs 40,000 crore for the proposed manufacturing scheme which will be rolled out this year according to Economic Times.

The government’s initiative will encourage applicants to invest around Rs 82,000 crore, with the total value of produced components estimated to be in the range between Rs 1.95 to 2 lakh crore.

Out of the total Rs 40,000 crore, Rs 19,800 crore will be allocated for operational expenditure subsidies, whereas Rs 13,000 crore will be allocated for capital expenditure subsidies, as per an official who had spoken to the ET on the condition of anonymity.

The official added that the rest of the sum which is nearly Rs 12,000 crore would be allocated as a mix of capex and opex subsidies. The details of the finer details will be finalised later.

Earlier in June this year, the government reportedly invested Rs 8,803.14 crore under the scheme to promote manufacturing of electronic components and semiconductors.

The government is reportedly looking to adopt a three-pronged approach for the plan’s incentives. It will either offer the subsidies as capex or opex or a mixture of both.

As per reports, companies that produce non-solder masked passive components, flex PCBA, and sub-assembly display and camera modules are likely to receive only operational expenditure subsidies.

Lithium-ion cells, on the other hand, may solely qualify for capital expenditure subsidies.

Companies that make printed circuit boards (PCBs) with equal to or more than eight layers may qualify for operational and capital expenditure subsidies, the report added.

The PLI scheme launched in April 2020 aims to boost domestic manufacturing and attract investment in the mobile phone value chain, including electronic components and semiconductor packaging.

The PLI offers 3 to 6 per cent incentives for large-scale electronics. It saw an investment of Rs 8,390 crore as of June 30. It resulted in an increase in sales of electronics produced in India over the last five years. The scheme has supported the production which has amounted to Rs 5,14,960 crore till date.