Hardware PLI: Govt cuts manufacturing target by half

Even before it gets operationalised, the government has had to cut the output of its production-linked incentive (pli) scheme for IT hardware, which includes laptops, tablets, all-in-one PCs and servers, by half with manufacturers turning up with low bids. As a result, the utilisation of the outlay for the scheme will also come down by a similar quantum and export targets will take a big hit —from Rs 2.45 lakh crore over a four-year period announced earlier to a mere Rs 60,000 crore.

IT hardware manufacturers blame this on the low incentive structure which works out to an average of 2-2.5% over a four-year period which does not justify relocating units from China or Vietnam, especially for hardware products, where import duties are nil as they fall under IT products. The incentive structure for mobile phones PLI, which got operationalised in August 2020 and saw companies committing up to the maximum limit, works out to around 4.5% over a five-year period.