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Govt approves Rs 41,000 crore booster for mobile makers

Telecom and IT Minister Ravi Shankar Prasad said that this package has been approved to boost investments in the electronics sector

twitter-logoBusinessToday.In | March 22, 2020 | Updated 17:24 IST
Govt approves Rs 41,000 crore booster for mobile makers
Ravi Shankar Prasad announced schemes to help mobile makers

The government has approved a stimulus package of Rs 41,000 crore for the mobile manufacturing sector. Performance-linked incentives of 4-6 per cent towards Make in India initiatives as well as a scheme of Rs 7,000 crore for manufacturing of electronics components, and for setting up of manufacturing clusters have also been announced for local manufacturers of mobile phones and manufacturers.

Telecom and IT Minister Ravi Shankar Prasad said that this package has been approved to boost investments in the electronics sector. "We will give Rs 40,995 crore in the coming five years for production linked-incentive in mobile phone manufacturing and specified electronic components, including assembly, testing, marking and packaging units," Prasad said.

The performance-linked incentives will be linked to the incremental sales and capital investment of the companies. The government expects the domestic value addition in mobile phones to increase from the current 20-25 per cent to 35-40 per cent in 2025.

The Cabinet has also cleared a scheme of Rs 3,285 crore for promotion of manufacturing of electronics components and semiconductors. The scheme would also provide financial incentive of 25 per cent on capital incentive for electronic products including electronic components, semiconductor/ display fabrication units, and more. The scheme is expected to create around 6 lakh direct and indirect jobs, said Ravi Shankar Prasad

The Cabinet approved a budgetary outlay of Rs 3,762 crore to be given over 8 years. The scheme would extend financial aid of 50 per cent of the product cost, subject to a cap of Rs 70 crore per 100 acres of land for the setting up of electronics manufacturing cluster projects. The scheme will be offered to electronics manufacturing clusters spread over 200 acres in the plains.

Also read: Coronavirus: Brace for Great Depression-type recession, warns investor Ruchir Sharma

Also read: Coronavirus crisis: Mahindra factories to make ventilators; Anand Mahindra to give away salary to COVID-19 fund

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