In order to boost the ‘MAKE IN INDIA‘ concept and attract investments from overseas, various schemes have been recently introduced by the Central Govt. particularly relating to (I) Electronics sector and (II) Pharma sector.
(I) Schemes for Electronics Sector
To facilitate India’s position as a global hub for Electronics System Design and Manufacturing (ESDM) and promote the vision of the National Policy on Electronics (NPE) 2019, 3 schemes namely the Production Linked Incentive Scheme (PLI), Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and Modified Electronics Manufacturing Clusters Scheme (EMC 2.0) have been notified.
These schemes expects to attract INR 1 lakh crore investment in the sector and generate manufacturing revenue potential of INR 10 lakh crore by 2025. These 3 schemes altogether offer incentives of nearly INR 48,000 crores.
|S. No||Scheme||Benefit for||Budget Outlay [in INR]|
|1||Production Linked Incentive Scheme (PLI)||Large Scale Mobile Manufacturing||41,000 crores|
|2||Scheme for promotion of manufacturing of electronic components and semiconductors (SPECS)||Domestic Electronics Supply Chain of components||3,300 crores|
|3||Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme||Infrastructure and common facilities for large manufacturers and value chain companies||3,700 crores|
Each of these schemes are discussed below outlining the salient features and benefits involved.
1. Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing [Budget Outlay = INR 41,000 crores (approx.)]
|1||Overview / Objective of scheme||To provide financial incentives in order to:
A. Boost domestic manufacturing, and
B. Attract large investments in the electronics value chain, including electronic components and semiconductor packaging
|2||Industry/Goods covered||The PLI Scheme is applicable to companies engaged in the following Target Segments only:
A. Mobile phones
B. Specified Electronic Components, which are listed below:
– SMT Components
– Discrete semiconductor devices including transistors, diodes, thyristors etc.
– Passive components including resistors, capacitors etc. for electronic application
– Printed Circuit Boards (PCB), PCB laminates, prepregs, photopolymer films, PCB printing inks
– Sensors, transducers, actuators, crystals for electronic application
– System in package (SIP)
– Micro/Nano-electronic components such as Micro Electromechanical Systems (MEMS) and Nano Electromechanical Systems (NEMS)
– Assembly, Testing, Marking and Packaging (ATMP) units
|3||Eligibility Criteria||A. The scheme is applicable to companies, registered in India, engaged in the manufacture of the above-mentioned Target Segments in India (including ‘Contract Manufacturers’)
B. Eligibility under the PLI Scheme shall not affect eligibility under other schemes, and vice-versa
C. The eligibility is subject to cumulatively fulfilling the prescribed threshold limits, in relation to Incremental Investment and Incremental Sale of Manufactured Goods.
|4||Incentives||A. Incentives are available for 5 years
B. Rate is 4 to 6% on the incremental sales over base year (base year being FY 2019-20) of goods which are manufactured in India
|5||Tenure / Last date for application||A. This incentive is offered to eligible companies for a period of 5 years subsequent to the base year
B. The application for the scheme shall be initially opened for a period of 4 months, starting from 01 April 2020 i.e. initial application needs to be submitted to the Nodal Agency before the due date (i.e., 31 July 2020)
C. Incentive under this scheme shall be applicable from 01 August 2020
D. Based on the response received from the industry, the MeitY may consider reopening the application, in which case, the applicants shall be eligible for incentives only for the balance period of the tenure of the Scheme
|6||Area covered||Across India|
|7||Nodal Agency and Empowered Committee||A. The Scheme shall be implemented through a Nodal Agency
B. The Empowered Committee shall consider applications for approval
2. Scheme for Promotion of manufacturing of Electronic Components and Semiconductors (SPECS). [Budget Outlay = INR 3,300 crores (approx.)]
|1||Overview / Objective of scheme||To help offset the disability for domestic manufacturing of components and semiconductors and strengthen the electronics manufacturing ecosystem in the country|
|2||Industry/Goods covered||Specified eligible goods (e.g. Electronic Components, Semiconductors, Specialized Sub-Assemblies and Capital Goods for these items) with respective minimum investment threshold|
|3||Eligibility Criteria||SPECS Scheme will be applicable to investments in new units as well as expansion of capacity/ modernisation and diversification of existing units by any entity registered in India|
|4||Incentives||A. Incentive of 25% on capital expenditure to units making investment for eligible goods in the form of reimbursement
B. Incentives, if any, by State Government, or any of its agencies or local bodies shall be available over and above the incentives under the SPECS scheme
C. Applicant shall also be eligible to take benefit under any other scheme of Government of India except M-SIPS scheme for which investment has been committed and incentives have been claimed
|5||Capital expenditure eligible for incentive||A. Total expenditure in plant, machinery, equipment, associated utilities and technology, including for Research & Development (R&D)
B. Total value of refurbished plant, machinery and equipment (including for associated utilities and R&D), whether imported or domestically procured, not exceeding 20% of the total eligible plant, machinery and equipment (including for associated utilities and R&D)
|6||Tenure / Last date for application||A. The SPECS will be open for applications initially for 3 years from the date of notification
B. Incentive will be available for investment made within 5 years from the date of acknowledgement of the application
|7||Area covered||Across India|
|8||Nodal Agency and Empowered Committee||A. SPECS to be implemented through a nodal agency acting as PMA (Project Management Agency). PMA shall be responsible for providing secretarial, managerial and implementation support. Further, PMA to perform tasks involving receiving the applications, examining disbursal claims and disbursing incentive, submit periodic reports to MEITY, etc.
B. The progress of the Scheme will be reviewed through a Governing Council (GC) to be constituted by MeitY.
|9||Other considerations||A. Only single-phase project applications will be considered under SPECS i.e. phase-wise applications will not be considered under the Scheme
B. There is no restriction on any applicant from making multiple applications and/or for multiple locations
C. Initial incentive shall be released post approval of application. Claims for subsequent incentive can be submitted on a six-monthly basis
D. The unit receiving incentive under SPECS will have to remain in commercial production for a period of at least 3 years from the date of commencement of production or 1 year from the date of receipt of last incentive, whichever is later
E. However, investments committed by the applicants under M-SIPS scheme for which incentives have been claimed will not qualify as eligible investments under SPECS scheme.
3. Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme [Budget Outlay = INR 3,700 crores (approx.)]
|1||Overview / Objective of scheme|| A. Electronics Manufacturing Clusters would be established to create infrastructure with common facilities and amenities in EMC projects and upgrade the infrastructure in Industrial Estates / Parks / Areas as Common Facility Centre (CFC) for attracting investment in electronics manufacturing.
B. The scope will cover components that are need based and identified through a feasibility study report to be prepared by the Project Implementing Agency.
|2||Industry/Goods covered||Illustrative list of eligible activities under Scheme:
A. Vital services – Boundary wall, internal roads etc.
B. Essential services – Sewage lines, waste disposal, Street lighting, warehousing, Plug & play facility etc.
C. Desirable services – Employee hostel, Conference facility, manufacturing support (e.g. – testing & certification facility, Tool room) etc.3Eligibility Criteria
A. An EMC would be set up in geographical areas of certain minimum extent, preferably contiguous, where the focus is on development of basic infrastructure, amenities, and other common facilities for the ESDM units.
B. For CFC, there should be a significant number of existing ESDM units located in the area and the focus is on upgrading common technical infrastructure and providing common facilities for the ESDM units in such EMCs. Further, for Common Facility Centre (CFC), there should be at least 5 electronics manufacturing units identified as users of the facility.
A. The financial assistance will be given for creation of world class infrastructure along with common facilities and amenities. The financial assistance will be provided for Electronics Manufacturing Cluster (EMC) Projects and Common Facility Centres (CFC) as follows:
B. For EMC Project – Financial assistance will be restricted to 50% of the project cost subject to a ceiling of INR 70 crore for every 100 acres of land.
C. For Common Facility Centres (CFCs) – Financial assistance will be restricted to 75% of the project cost subject to a ceiling of INR 75 crore.
5. Tenure / Last date for application
A. The Scheme will be open for receipt of applications for a period of three (3) years from the date of notification.
B. Further period of five (5) years shall be available for disbursement of funds to the approved projects.
C. The applications received under the Scheme will be appraised on an ongoing basis
6. Area covered Specified areas across India7Nodal Agency and Empowered Committee
A. MEITY will periodically monitor and review the progress of the Scheme and the projects under EMC 2.0 Scheme.
B. The selection / location of the EMC shall be taken up by the PIA (Project Implementation Agency) in consultation with the Anchor Unit(s) / Industry.
Anchor Unit – Anchor Unit (s) shall be electronics manufacturing company (s) with a commitment of purchasing minimum 20% of the saleable / leasable land area in the proposed EMC project for setting up electronics manufacturing facility in the EMC and will give a commitment of an investment of INR 300 crore or above (INR 150 Crore for North-Eastern States, Hill States, UTs).
EMC – EMC Project would be an undeveloped / underdeveloped geographical area, preferably contiguous, where the focus is on development of basic infrastructure, amenities and other common facilities for the ESDM units.
Common Facility Centre (CFC) – There should be significant number of existing ESDM units located in the area and the focus is on upgrading common technical infrastructure and providing common facilities for the ESDM units in existing EMCs, Industrial Estates / Parks / Areas.
(II) Schemes for Pharma / Medical Sector
With the Covid-19 outbreak disrupting supply of active pharmaceutical ingredients (APIs) and medical devices from China/other countries to India, the Govt. has come out with 4 schemes worth INR 13,760 crores to encourage manufacturing of bulk drugs and medical devices in the country and their exports as well.
On 21 March 2020, the Union Cabinet under the chairmanship of Hon’ble Prime Minister Sh. Narendra Modi Ji had approved an expenditure of INR 9,940 crore and INR 3,820 crore for APIs and medical devices, respectively.
The introduction of such schemes by the Govt. will surely help in addressing Indian healthcare security concerns in view of the ongoing crisis of coronavirus pandemic. Needless to say, this is a major step in the creation of a self-sufficient healthcare ecosystem in the country and will help boost local manufacturing.
|S.No||Scheme||Benefit for||Budget Outlay [in INR]|
|1||PLI Scheme for Promotion of Medical Devices||Domestic manufacturing of medical devices||3,420 crores|
|2||Promotion of Medical Device Parks||Developing 4 Medical Device parks||400 crores|
|3||PLI Scheme for Promotion of domestic manufacturing of critical KSMs/Drug Intermediates and APIs||Domestic manufacturing of critical KSMs/Drug Intermediates and APIs||6,940 crores|
|4||Promotion of Bulk Drug Parks||Financing Common Infrastructure Facilities in 3 Bulk Drug Parks||3,000 crores|
Each of these schemes are discussed below outlining the salient features and benefits involved.
1. PLI Scheme for Promotion of Medical Devices [Budget Outlay = INR 3,420 crores (approx.)]; and
2. Promotion of Medical Device Parks [Budget Outlay = Rs 400 Crores]
|S.No||Pts.||1. Details of PLI Scheme for Promotion of Medical Devices||2. Details of Promotion of Medical Device Parks (MDP)|
|1||Overview / Objective of scheme||To provide financial incentives/assistance in order to boost domestic manufacturing of medical devices with financial implications of INR 3,420 crore.||1. The scheme relates to financing Common Infrastructure Facilities in 04 Medical Device Parks in partnership with the States.|
|2||Industry/Goods covered||The target for PLI Scheme is to provide assistance to about 25-30 manufacturers under the following categories of medical devices: –
1. Cancer care/Radiotherapy medical devices
|The target is to provide financial assistance for developing 4 Medical Device parks.|
|3||Eligibility Criteria||The Scheme shall be available to the manufacturers engaged in the manufacture of above 4 categories of medical devices.||The scheme is available for development of Common Infrastructure Facilities for 04 Medical Device parks to reduce manufacturing cost of medical devices in the country.|
|4||Incentives||5% of incremental sales over base year 2019-20 will be provided on the segments of medical devices identified under the Scheme.||A maximum grant-in-aid of Rs.100 crore per park will be provided to the States.|
|5||Tenure||The benefit shall be available for the next five years i.e. from 2020-21 to 2024-25.||The benefit shall be available for the next five years i.e. from 2020-21 to 2024-25.|
|6||Area covered||Across India||Across India|
|7||Nodal Agency and Empowered Committee||The PLI Scheme for promoting domestic manufacturing will be implemented by a Project Management Agency(PMA) to be nominated by Department of Pharmaceuticals||The Scheme for Promotion of Medical Device Parks will be implemented by a State Implementing Agency(SIA)|
3. PLI Scheme for Promotion of domestic manufacturing of critical KSMs/Drug Intermediates and APIs [Budget Outlay = INR 6,940 crores (approx.)]; and
4. Promotion of Bulk Drug Parks [Budget Outlay = Rs 3,000 Crores]
|S.No||Pts.||3. Details of PLI for critical drugs manufacturing||4. Details of Bulk Drug Parks (BDP)|
|1||Overview / Objective of scheme||1. Aims to promote domestic manufacturing of critical KSMs/Drug Intermediates and APIs in the country with financial implications of Rs 6,940 crore for next eight years.
2. Intends to boost domestic manufacturing of critical KSMs/Drug Intermediates and APIs by attracting large investments in the sector to ensure their sustainable domestic supply and thereby reducing India’s import dependence on other countries for critical KSMs/Drug Intermediates and APIs.
|1. It aims at financing Common Infrastructure Facilities in 3 Bulk Drug Parks with financial implication of Rs. 3,000 crore for next five years.
2. Expected to reduce manufacturing cost of bulk drugs in the country and dependency on other countries for bulk drugs.
|2||Industry/Goods covered||Industry: Pharmaceutical industry
Goods covered: Fermentation based bulk drugs and chemical synthesis based bulk drugs
|Industry: Pharmaceutical industry|
|3||Eligibility Criteria||1. Eligible manufacturers of identified 53 critical bulk drugs
2. In relation to benefits available for 53 identified bulk drugs, 26 are fermentation based bulk drugs and 27 are chemical synthesis based bulk drugs.
|Parks to be developed should have common facilities such as solvent recovery plant, distillation plant, power & steam units, common effluent treatment plant etc.|
|4||Incentives||Rate of incentive will be 20 % (of incremental sales value) for fermentation based bulk drugs and 10% for chemical synthesis based bulk drugs.||Government of India will give Grants-in-Aid to States with a maximum limit of Rs. 1000 Crore per Bulk Drug Park.|
|5||Tenure||The benefit shall be available for the next 8 years.||The benefit shall be available for the next 5 years.|
|6||Area covered||Across India||Across India|
|7||Nodal Agency and Empowered Committee||The scheme will be implemented through a Project Management Agency (PMA) to be nominated by the Department of Pharmaceuticals. The Scheme will be applicable only for manufacturing of 53 identified critical bulk drugs (KSMs/Drug Intermediates and APIs).||The scheme will be implemented by State Implementing Agencies (SIA) to be set up by the respective State Governments and the target is to set up 3 mega Bulk Drug Parks.|
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