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The Union Cabinet, on Wednesday, announced a slew of critical decisions that include notification of a Production-Linked Incentive (PLI) from February 24, 2021, to promote the manufacture of telecom and networking products in India with an overall outlay of ₹12,195 crore. The Cabinet has also announced an increase in Dearness Allowance (DA) for Central government employees and Dearness Relief (DR) for pensioners.
In the meeting chaired by Prime Minister Narendra Modi, the Cabinet gave its approval to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners with effect from January 1, reflecting an increase of 3 per cent over the existing rate of 31 per cent of the Basic Pay/Pension to compensate for price rise.
This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
Impact on exchequer
The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be ₹9,544.50 crore per annum. This will benefit about 47.68 lakh Central government employees and 68.62 lakh pensioners.
Simultaneously, the Cabinet gave approval for notifying from February 24, 2021, a PLI scheme to promote the manufacture of telecom and networking products in India, with an overall financial outlay of ₹12,195 crore over five years.
The scheme stipulates a minimum investment threshold of ₹10 crore for MSMEs and ₹100 crore for non-MSME applicants. For the MSME category, there is a financial allocation of ₹1,000 crore out of ₹12,195 crore over a period of 5 years. Higher incentives are provided for MSMEs when compared to non-MSMEs in the first three years. A total of 31 applicants have been approved under the scheme, of which, 16 are MSMEs, 8 non-MSME (domestic) and 7 non-MSMEs (global). The projected investment proposed in the telecom sector under the PLI scheme is ₹3,344 crore.
The government said it has already taken steps such as imposition of basic custom duty (ranging from 10-20 per cent) on certain identified telecom products and notified public procurement (preference to make in India) order to reduce dependence on other countries for importing telecom and networking products.
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