PLI scheme extension to boost job creation across electronics manufacturing

As new players are expected to join the ranks, the extension of the Production-Linked Incentive scheme (PLI) for large-scale electronic manufacturing by one more year will likely boost job creation.The announcement was made by Nirmala Sitharaman, Finance Minister, on June 28.The scheme was to start in 2020-21 and last for five years. She said that the scheme will continue until 2025-26. Participating companies now have five years to meet their production targets.This was due to COVID-19 component shortages and production delays.Kamal Nandi (CEAMA president and Business Head and Executive Vice President, Godrej Appliances) said that the sector is currently recovering from the effects of the pandemic. The additional year will help.Companies that were unable to meet their targets will be rewarded. This will help to boost indigenous manufacturing in many sectors, including white goods and consumer durables. He said that this will create more jobs and give India an economic boost by bringing large-scale manufacturing here.The PLI SchemeImported from China are high-end televisions and air compressors for air conditioners as well as laptop processors, CPU chips, and smartphones. In May 2020, Prime Minister Narendra Modi called for Aatmanirbhar Bhharat (india self-reliant) amid the Coronavirus epidemic and calls to boycott Chinese products.In November 2020, the Union cabinet approved a PLI scheme covering 10 sectors.These include pharmaceuticals, automobiles, auto components, telecom, networking products, advanced chemical cell batteries, textile, food products and solar modules.Nandi stated that the scheme would give a boost to Make-in-India and help India become an industrial hub.On April 1, 2021, the PLI scheme for white goods was made operational. Over five years, incentives will be provided to eligible players in the LED and air-conditioner manufacturing sector worth Rs 6,238 crore.The scheme for laptops, IT hardware and other items has a total value of Rs 7,350 crore over the four-year period.The incentive also includes cash incentives of 4-6% on incremental sales over the base year 2019-20 for five-years. Companies will only be eligible for incentives if their production exceeds the base year's.What will this do for employment?According to the finance minister, companies could not meet their targets because of movement restrictions, lockdowns and delay in machine/plant installations, as well as disruptions in the supply chain.Shreegopal Kabra (Managing Director & Group president, RR Global) stated that companies who have made investments under the scheme will benefit from the extension.Due to the pandemic, these companies were unable to meet their obligations. He added that the revised scheme would also attract many more companies."Industry experts believe that new companies will create jobs in the newly established manufacturing plants.Sudeep Sen, Business head, Industrial Manufacturing and Engineering & General Staffing at TeamLease Services stated that the PLI extension will provide more opportunities for large-scale and mid-sized electronic manufacturing businesses.This means that they will receive an additional year of production and sales benefits. This will create an additional 8-10% of jobs. Sen.This scheme could also be an incentive to mid-sized electronics companies from South-East Asia.Sudarshan Purohit is senior vice president and white goods analyst at CPG Consulting. He stated that India did not see any PLI entrants in 2020 because of the pandemic."We were unable to enter India for a whole year due to mini lockdowns in India. Due to the demographic dividend, companies from neighboring markets will be eager to join, as there is an extension until 2026. He said that this would also increase the hiring of blue-collar workers and R&D areas.The PLI scheme aims to change manufacturing from 'assemble India' to'make in India'.Sen explained that both permanent and contractual staff will be more in demand due to the PLI incentives. Niche positions could also be available.The employment of contract workers will increase by 6-9%. Additionally, the demand for component assemblers and quality specialists, as well as testing specialists, will rise. He said that this will also translate into more jobs for female employees, as there has been a higher participation of women in electronic manufacturing units."Ravi Shankar Prasad (Union Minister for Electronics and Information Technology) had previously stated that electronics products such as tablets and laptops will generate a total of Rs 3.26 lakh crore in five years. Of this, 75 per cent will go to export.The government stated that PLI can create more than 1,80,000 direct and indirect jobs over the next four years, in addition to building local manufacturing facilities.