IT Hardware PLI: India Saw Production Worth Rs 67,275Cr In 2021, But Chip Shortage Stunts Growth

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The country saw an investment of Rs 2,595 crore and production worth Rs 67,275 crore under the PLI scheme for large-scale electronics manufacturing, out of which, Rs 20,568 crore worth products were exported till June 2021

The Economic Survey of 2021-22 presented by Finance Minister Nirmala Sitharaman revealed that India saw production worth Rs 67,275 crore under Production Linked Incentive (PLI) scheme for large-scale electronics.

The country saw an investment of Rs 2,595 crore and production worth Rs 67,275 crore under the PLI scheme for large-scale electronics manufacturing, out of which, Rs 20,568 crore worth products were exported till June 2021.

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According to the Survey, under the PLI scheme for IT hardware (notified on March 3, 2021) the total sales of manufactured goods in the target segment stood at Rs 503 crore, with Rs 16.50 crore investment (as per Q2 FY21).

This PLI scheme extends an incentive in the range of 1 to 4 per cent on net incremental sales (over base year) of goods manufactured in India and covered under the target segment, to eligible companies, for a period of four years.

Chip Shortage Stunts Growth

However, several industries faced the burnt of the persisting semiconductor shortage, leading to significant downsurge in production and even closure of some, as per the Economic Survey for 2021-22.

According to the survey report, the government’s Rs 76,000 semiconductors and display manufacturing incentive is expected to aid their production in the country.

The survey said that electronics is recognised as a ‘meta-resource’ across the world.

“Electronics industry is the world’s largest and fastest growing industry and is increasingly finding applications in all sectors of the economy.

With its impact in developing infrastructure, raising productivity, increasing efficiency in delivery of services, and enabling social transformation, it is accepted as a key enabler in the country’s economic development,” the survey said.

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