PLI scheme: Rs 6,200 crore allocation for electronics

Electronics has climbed to India’s 5th largest exporting commodity, with mobile phones contributing 50% of this export.
Representative Image.
Representative Image.

NEW DELHI: The government on Thursday allocated Rs 6,200 crore for the production-linked scheme (PLI) to promote electronics manufacturing in the country.

According to the budget document of FY2024-25, the finance ministry provisioned Rs 6,125 crore for large electronics and Rs 75 crore for IT hardware. In the last budget, 2023–24, the government allocated Rs 4,559.88 crore. The PLI for electronic manufacturing is being funded more because, among the 14 PLI schemes, it is thought to be the most successful.

Electronics production in the country has grown about 400% from Rs 1,90,000 crore in 2014 to Rs 8,22,000 crore, and mobile phone production has grown from Rs 18,900 crore to 3,50,000 crore in FY22–23, thanks to the PLI scheme.

Electronics has climbed to India’s 5th largest exporting commodity, with mobile phones contributing 50% of this export. The government has allocated Rs 6,903 crore in the interim budget 2023–24 to develop the semiconductor and display manufacturing ecosystem in India.

This follows the announcement of Rs 76,000 crore in incentives in December 2021 to encourage companies to establish a semiconductor ecosystem in the country.

Experts have welcomed the move, with Satya Gupta, President of the VLSI Society of India, expressing satisfaction with the allocation. However, he suggests that given the global interest in setting up semiconductor manufacturing in India, the allocation should have been nearly Rs 10,000 crore.

“I’m very happy to see 6,000 crore allocated in the current budget for semiconductor and display manufacturing in India. Although I feel that with the number of proposals and the global interest in setting up semiconductor manufacturing in India, we will probably need about Rs 10,000 crore of allocation for 2024–25. But I’m very happy that this allocation has been increased from Rs 3,000 to Rs 4,000 crore,” said Gupta.

The allocation includes Rs 1,500 crore for the Modified Scheme for Setting up of Semiconductor Fabs in India and Rs 4,203 crore for the Modified Scheme for setting up compound semiconductors/silicon photonics/sensors fab/discrete semiconductors fab and semiconductor assembly, testing, marking, and packaging (ATMP)/outsourced semiconductor assembly and test facilities in the country.

Additionally, Rs 100 crore has been allocated for setting up display factories in India, Rs 200 crore for the modernisation of the semiconductor laboratory in Mohali, and Rs 200 crore for the design-linked incentive scheme.

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