The government is contemplating the launch of a revised edition of the Production-Linked Incentive (PLI) scheme for telecom equipment, along with a call for new applications. This decision stems from a surplus outlay of over Rs 1,500 crore, as fewer than half of the 42 companies have met their targets for FY23.

According to informed sources, the updated scheme is anticipated to extend eligibility for incentives to some new telecom networking products. During consultations, certain companies have already expressed interest in the revised scheme, they revealed.

An official shared insights, stating, "Some companies fell short of sales targets due to delays in orders leading up to the 5G rollout. However, with processes streamlined, the majority of these firms are expected to meet targets next year."

Another official highlighted the increasing demand for products like GPON (gigabit passive optical network) terminals, attributing it to the nationwide expansion of 5G rollout.

As per reports, 20 companies, including Nokia, Jabil, Sanmina, HFCL, VVDN, Coral, and Tejas Networks, have successfully met their FY23 targets. The government is poised to allocate incentives amounting to Rs 400 crore to these firms for achieving their sales goals.

The Department of Telecommunications (DoT) introduced the PLI scheme for telecom and networking products in February 2021, allocating an outlay of Rs 12,195 crore. Approval for the scheme was granted to 31 companies on October 14, 2021, with incentive rates ranging from 4% to 7% for different categories and years. The scheme was later amended in April of the same year to encourage design-led manufacturing, with an additional incentive rate of 1%. An amount of Rs 4,000 crore from the total outlay was reserved for this purpose. The scheme's duration was extended by a year due to disruptions in the supply chain caused by the COVID-19 pandemic.

Under the revised scheme, 42 firms, including 28 medium and small enterprises (MSMEs), were selected. Existing companies under the original PLI scheme were permitted to add more products and apply under the design-led PLI scheme. Additionally, they were allowed to shift their five-year PLI scheme period by one year, with 22 companies taking advantage of this opportunity.

With a focus on fostering self-reliance in telecom equipment manufacturing, the government aims to ensure the full utilisation of the scheme outlay. According to government projections, the telecom PLI scheme is expected to generate additional sales of Rs 2.45 lakh crore and create over 44,000 jobs over the five-year period.

Source: Indiatimes