Ravi Shankar Prasad announces new schemes to boost manufacturing in India

The Union government on Saturday announced new measures to make India a hub of electronics and pharma sectors. This is a bid to generate manufacturing revenue potential of Rs 10 lakh crore by 2025. It also aims to generate direct and indirect employment to around 20 lakh people.

READ: Govt Has Decided To Revive BSNL And MTNL, Says Union Minister RS Prasad

Shankar announces multiple new schemes

Addressing a press conference in Delhi, Union Minister Ravi Shankar Prasad said, "The Cabinet took decisive decisions to make India a manufacturing hub. Two long-term policy decisions have been taken to make India a hub of electronics and pharma manufacturing sectors. During 2014-15, the manufacturing of worth Rs 1,90,000 crore was done in the country, which went up to Rs 4.58 lakh crore in 2018-19. There is a compound growth rate of 25 per cent," he said.

The Union Cabinet also approved the Production Incentive Scheme (PLI) for Large Scale Electronics Manufacturing.  The scheme proposes production linked incentive to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components including Assembly, Testing, Marking and Packaging (ATMP) units.

The Scheme shall extend an incentive of 4 per cent to 6 per cent on incremental sales of goods manufactured in India and covered under target segments, to eligible companies, for a period of five years subsequent to the base year as defined.

READ: Make In India Gets A ₹42,000 Crore Boost From Govt For Domestic Manufacturing Of Mobiles

Prasad said, "Under the production-linked incentive, we request global companies to come to India and invest here. They will get 4-6 per cent incentive on the basis of their investment and their incremental sales. This incentive is linked to its production in India. We also want to make 3-4 Indian companies 'Champion Companies'. We will allot Rs 40,950 crore for production linked incentive in five years."

The scheme has a direct employment generation potential of over 2,00,000 jobs over five years. However, it is expected that the scheme would lead to large scale electronics manufacturing in the country and open tremendous employment opportunities.  Indirect employment will be about three times of direct employment as per industry estimates.

The production of mobile phones in the country has gone up significantly from around INR 18,900 crore (USD 3 Billion) in 2014-15 to INR 1,70,000 crore (USD 24 Billion) in 2018-19 and the domestic demand is almost completely being met out of domestic production.

READ: Covid-19: Economic Package To Be Announced As Soon As Possible, Says FM

READ: 'No Taxes On Manufacture Of Medicines Related To COVID-19': MoS G Kishan Reddy