Important Decision Taken By Government For IT Hardware Industry.

Finance


The Government Takes An Important Decision for the IT Hardware Industry, Will Help In Increasing Domestic Manufacturing.


The central government is constantly making decisions to promote Make in India. In this sequence, on Wednesday, the Union Cabinet chaired by Prime Minister Narendra Modi has approved the production incentive scheme for IT hardware. The Production Linked Incentive Scheme proposes production-linked incentives to boost domestic production and attract large-scale investment in the value chain of IT hardware. Target areas of the proposed scheme include laptops, tablets, all-in-one PCs, and servers. Manufacturing sector recovering from the covid-19 hit, the slight increase in industrial production


4 percent to 2 percent / 1 percent on the total incremental sales (the base year 2019-20) for products manufactured in India under the target area to the eligible companies under the PLI scheme for a period of four years It has been proposed to give an incentive amount of Rs.


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The plan is expected to benefit 5 major global companies and 10 domestic companies associated with IT hardware manufacturing including laptops, tablets, all-in-one PCs, and servers. This is an important area for promoting manufacturing under self-sufficient India as the import dependence for these commodities is very high at present.


The total cost for the 4 years of the proposed scheme is about Rs 7,350 crore, including an incentive outlay of Rs 7,325 crore and an administrative fee of Rs 25 crore.


This scheme will promote the development of the electronics ecosystem in the country. India, due to its integration with global value chains, will emerge as a global hub in the field of electronics systems design and manufacturing (ESDM) and will become a destination for IT hardware exports. There is a possibility of creating more than 1,80,000 (direct and indirect) employment opportunities under this scheme in 4 years. The scheme will provide incentives for domestic value addition to IT hardware, which is expected to increase to 20-25 percent by 2025.


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The vision of the National Electronics Policy, 2019, notified on 25 February 2019, is to establish India as a global hub for electronics systems design and manufacturing (ESDM). For this, the country's capabilities to develop core components including chipsets are being encouraged and a suitable environment is being created to make the industry globally competitive.


Currently, the demand for laptops and tablets in India is mainly met through imports, which was $ 4.21 billion and $ 0.41 billion respectively in 2019-20. The IT hardware market is dominated by 6-7 companies globally, which have about 70 percent share in the world market.


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