The Union Government is considering publishing an updated version of the production-linked incentive (PLI) plan for telecom equipment, and is also accepting new applications.
The government is left with a surplus outlay of over Rs 1,500 crore with less than half of the 42 enterprises fulfilling their targets for FY23.
Officials with access to the information told the Economic Times that certain new telecom networking products should qualify for incentives under the updated plan. During conversations, a few companies had already expressed interest in the amended strategy.
“Some firms have not met the sales targets because the orders got a bit delayed in the run-up to 5G roll out. Now things have streamlined, and the majority of the firms would meet the targets next year,” an official told ET.
According to a different official, as 5G deployment has expanded throughout the nation, there is a healthy market for goods like GPON (gigabit passive optical network) terminals.
Twenty firms, including Nokia, Jabil, Sanmina, HFCL, VVDN, Coral, and Tejas Networks, have reportedly met their FY23 targets, according to officials. The government is probably going to provide the companies incentives of Rs 400 crore if they hit their sales goals.
With a budget of Rs 12,195 crore, the PLI plan for telecom and networking devices was announced by the Department of Telecommunications (DoT) in February 2021. On October 14, 2021, a total of 31 companies received permission for the program, which provides incentives ranging from 4 per cent to 7 per cent for various categories and years. The proposal suggests a 1 per cent increase in incentives for MSMEs in the first, second, and third years.
In April of last year, the program was changed to include an extra 1 per cent incentive rate on top of the current incentive rates to support design-led production. Out of the Rs 12,195 crore allocated for it, an amount of Rs 4,000 crore was used. The program was also extended by a year because supply chain delays associated to Covid caused the majority of the selected enterprises to miss their production targets.
42 businesses in all, including 28 medium-sized and small businesses (MSMEs), were chosen in accordance with the updated plan. Companies who were already operating under the previous PLI program were permitted to apply for the design-led PLI program and add additional products. Additionally, they were permitted to add an extra year to the five-year PLI scheme time. Twenty-two businesses had taken advantage of this scheme of adding another year.
