The Department of Telecommunications (DoT) said that the guidelines of the Production Linked Incentive (PLI) scheme for the telecom sector is in the final stages and will be released soon. It is because of the widespread of COVID-19 in the country that the telecom department couldn’t come out with the guidelines sooner.
According to an ET Telecom report, the telecom vendors are scared about losing crucial time of four months because of the government delays in coming out with the final guidelines. For the unaware, the PLI scheme for the telecom department had already come into effect on April 1, 2021. However, since the government hasn’t come out with the final guidelines, it is resulting in delays in the manufacturing plans of the telecom vendors.
DoT Says Basic Incentive Structure Already Announced
The government official related to the matter said that DoT has already announced the incentive structure for the companies. In addition to that, the department also revealed the names of the interested companies that might be a part of the scheme.
As per an executive, a look at the final guidelines revealed by the government is really important to understand the business case of the scheme. Accordingly, looking at the guidelines, businesses can decide on the targets they want to achieve.
The vendors can lose out on as much as four months of crucial time because of the government delays. This will impact the target they want to achieve by the year-end.
In February 2021, DoT had announced the PLI for the telecom sector of Rs 12,195 crore. The incentives for the companies are set between 4% to 6% if they hit the desired target set by the government. Micro, Small, and Medium Enterprises (MSMEs) stand to gain a higher incentive of up to 7% if they reach their targets.
To be a part of the scheme, the large companies have to invest a minimum amount of Rs 100 crore for manufacturing, and MSMEs have to invest a minimum amount of Rs 10 crore only. The PLI scheme for the telecom sector will boost the local productivity of network gear and will ensure that India can source its 5G equipment locally only.
Major companies including Ciena, Foxconn, Samsung, Cisco and more are expected to be a part of the scheme.