The Union Cabinet on Wednesday approved a Rs 17,000-crore Production Linked Incentive (PLI) Scheme for IT Hardware and Rs 1,08,000 crore subsidy for farmers to provide them quality and subsidized fertilizers during Kharif 2023.

The Cabinet, chaired by Prime Minister Narendra Modi, took note of the consistent growth in electronics manufacturing in the country, registering a 17 per cent Compound Annual Growth Rate (CAGR) in the last eight years.

This year, manufacturing crossed a major benchmark in production of USD 105 billion (about Rs 9 lakh crore), Minister for Electronics and Information Technology Ashwini Vaishnaw told newspersons. It used to be between 20 and 29 USD billion at one time, he said.

India also became the world’s second largest manufacturer of mobile phones. Exports of mobile phones crossed a major milestone of USD 11 billion this year (about Rs 90,000 crore). The global electronics manufacturing ecosystem is coming to India, and India is emerging as a major electronics manufacturing country, Mr Vaishnaw said.

Building on the success of the Production Linked Incentive scheme (PLI) for mobile phones, the Union Cabinet approved PLI Scheme 2.0 for IT hardware, so that the momentum of its performance continues.

The PLI Scheme 2.0 for IT hardware covers laptops, tablets, all-in-one PCs, servers and ultra small form factor devices. With a budgetary outlay of Rs 17,000 crore, the scheme has tenure of six years.

The expected incremental production is Rs 3.35 lakh crore and the expected incremental investment is Rs 2,430 crore. The expected incremental direct employment is 75,000.

Vaishnaw said telecom manufacturing companies have also done well. The 42 companies which were supposed to make an investment of just Rs 900 crore in the first year, have actually made an investment of Rs 1600 crore. Two of the companies are exporting complex telecom hardware to advanced countries. This is the big picture in which the IT hardware sector is to be seen.

The significance of Wednesday’s decision is that India is emerging as a trusted supply chain partner for all global majors. Large IT hardware companies have shown a keen interest in establishing manufacturing facilities in India.

The Union Cabinet decided not to raise fertilizers prices in spite of rise in prices in other countries. Chemicals and Fertilisers Minister Mansukh Mandaviya said for the Kharif Season, the Cabinet has decided to give a subsidy of Rs 70,000 crore for urea and Rs 38,000 crore for DAP fertilizers. This will come to a subsidy of Rs 1,08,000 crore for the Kharif season (from 1.4.2023 to 30.09.2023) and the MRP will not go up, he said.

He said last year Rs 2.56 lakh crore fertilizers subsidy was given. It comes to Rs 8909 subsidy per hectare of cultivated land. There are 12 crore farmers in the country. Per farmer the subsidy came to Rs 21233.

The Cabinet decision will have the two-fold benefit of ensuring availability of DAP and other P&K fertilizers to farmers at subsidized, affordable and reasonable prices during Kharif season and will ensure rationalization of subsidy on P&K fertilizers.