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Production-Linked incentive (PLI) Schemes For Pharmaceuticals And IT Hardware

Production-Linked incentive (PLI) Schemes For Pharmaceuticals And IT hardware:

The Union Cabinet has cleared Production-Linked incentive (PLI) schemes for pharmaceuticals and IT hardware, including laptops, which would cost the government as much as Rs. 22,350 crore.

  • Earlier, the government had announced the PLI scheme for medical devices, mobile phones, and specified active pharmaceutical ingredients, with a proposed outlay of Rs. 51,311 crore.

IT Hardware Sector:

  • The scheme, worth Rs. 7350 crore, will offer 1-4% cash incentives on net incremental sales (over the base year 2019-20) for IT products manufactured in India.
  • The Target Segments include Laptops, Tablets, All-in-One PCs and Servers.
  • Duration: 4 years
  • India will be well-positioned as a global hub for Electronics System Design and Manufacturing (ESDM) on account of integration with global value chains, thereby becoming a destination for IT Hardware exports.
  • Employment Generation potential of over 1,80,000 (direct and indirect) over 4 years.
  • Provide impetus to Domestic Value Addition for IT Hardware which is expected to rise to 20-25% by 2025.

Pharmaceutical Sector:

  • The Rs. 6,940-crore PLI scheme implemented in 2020 focuses on the critical bulk drugs, whereas this scheme is likely to focus on other types of bulk drugs.
  • It intends to give incentives between 2020-21 and 2028-29 (9 years).
  • Drug manufacturers applying for the scheme will have to be registered in India and will be placed into one of three categories based on their Global Manufacturing Revenue (GMR).

Categories of Drugs Targeted by the Scheme:

    • First Category: It includes biopharmaceuticals, complex generics, patented and orphan drugs, often expensive for which India relies a lot on multinational drugmakers.
    • Second Category: It comprises Active Pharmaceutical Ingredients (APIs), Key Starting Materials (KSMs), and Drug Intermediates (DIs).
    • Third Category: It includes other critical repurposed, auto-immune, anti-cancer, anti-diabetic, anti-retroviral, anti-infective, and cardiovascular drugs as well as in-vitro diagnostic devices and drugs not manufactured in India.
  • For First and Second Category: 10% of incremental sales value for the first four years of the scheme, followed by 8% for the fifth year and 6% for the sixth year of production under the scheme.
  • For the Third Category: 5% of incremental sales value for the first four years, 4% for the fifth year, and 3% for the sixth year.