Cabinet approvals on Feb 24, 2021

On February 24, 2021, the Union Cabinet chaired by Prime Minister (PM) Narendra Modi approved the following proposals:

–Cabinet approves Production Linked Incentive Scheme for pharmaceuticals & IT Hardware

The Union Cabinet approved the Production Linked Incentive (PLI) Scheme with an outlay of Rs 15,000 crore for the pharmaceuticals and with Rs 7,350 crore for IT (Information Technology) hardware.

PLI scheme for pharmaceuticals:

Duration: 9 years (2020-21 till 2028-29)

Benefits: Help manufacturers, create employment, Availability of affordable medicines for consumers

Projection: Production of high-value products and increase in exports

  • It is projected that there will be total incremental sales of Rs 2,94,000 crore and total incremental exports of Rs 1,96,000 crore during six years from 2022-23 to 2027-28.
  • There will be 20,000 direct and 80,000 indirect jobs for both skilled and unskilled personnel.

This PLI scheme will promote innovation for development of complex and high-tech products including products for emerging therapies and in-vitro diagnostic devices thereby reducing dependency on imports.

The pharmaceutical PLI scheme was announced under three categories. The Indian pharmaceutical industry is the third-largest globally in terms of the volume term of production and is worth $40 billion in value term. The country contributes 3.5% of total drugs and medicines exported globally.

PLI scheme for IT Hardware:

The Cabinet also approved the PLI Scheme for IT hardware such as laptops, tablets, all-in-one PCs and servers.  Under this, incentive will be given on net incremental sales of goods manufactured in India for a period of four years.

  • It will benefit five major global players and ten domestic champions in the field of IT hardware.
  • The Scheme shall extend incentives between 4% to 1% on net incremental sales (over base year i.e. 2019-20) of goods manufactured in India and covered under the target segment, to eligible companies, for a period of four (4) years.

Benefits: 

  • Over the next 4 years, the Scheme is expected to lead to total production of upto INR 3,26,000 crore (INR 3.26 lakh crore) by these 5 Global Champions and 10 National Champions.
  • It is equally heartening to note that the scheme is also expected to boost exports significantly. Out of the total production in the next 4 years, more than 75% are expected to be exports of the order of INR 2,45,000 crore.
  • The Scheme will bring an additional investment in electronics manufacturing to the tune of INR 2,700 crore.
  • The direct and indirect revenues generated from production under this scheme are expected to be INR 15,760 crore over next 4 years.
  • Domestic value addition for IT Hardware is expected to rise to 20% – 25% by 2025 from the current 5% – 10% due to the impetus provided by the Scheme. Increase in both domestic manufacturing and domestic value addition will help significantly reduce the large foreign exchange outgo that India will have to otherwise bear.
  • The scheme will promote large scale electronics manufacturing of IT Hardware products and contribute significantly to achieving a USD 1 Trillion digital economy and a USD 5 Trillion GDP by 2025. 
  • There will be employment for more than 1,80,000 (direct and indirect jobs) over four years.

What is Production-Linked Incentive (PLI) scheme?

ProductionLinked Incentive (PLI) scheme was introduced by the government to incentivise and boost domestic manufacturing, as well as attract foreign manufacturers to move base to India. The aim of the scheme is to generate more employment and cut down the country’s reliance on imports from other countries.

PLI scheme was announced for 13 sectors. In order to boost manufacturing in India, the finance minister also announced a production linked incentive (PLI) scheme with an outlay of Rs 1.97 lakh crore for 5 years starting this fiscal in the Union Budget 2021-22.

Union Cabinet approves President’s rule in Puducherry

The Union Cabinet also approved the proposal of the Home Ministry to dissolve the Puducherry Assembly and impose President’s rule in the Union Territory. This decision has been taken as no party claimed to form a government following the resignation of the Chief Minister, Velu Narayanasamy.

  • After the President’s assent, the Assembly will get dissolved and further steps for administrative work would be taken soon.
  • The model code of conduct is expected to come into effect soon after the Election Commission announces the dates for elections in Puducherry.

What is a President’s rule?

It is a suspension of state government and imposition of direct Union government rule in a state. It is imposed under Article 356 of the Constitution of India. No major government decisions can be made and no projects can be sanctioned till the time the President’s rule is revoked and the next government is formed.

  • Timeframe: Maximum 6 months. This timeframe can be extended up to three years, in phases. It can be revoked at any time by the President and this does not require Parliament’s approval.

Recent Related News:

i.Union Cabinet approved Production Linked Incentive (PLI) scheme worth up to Rs 1.46 lakh crore for 10 key sector. This decision has been taken to attract investments, boost manufacturing and enhance exports on the lines of the Atmanirbhar Bharat.

ii.On October 29, 2020,Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers has revised guidelines of the PLI schemes for promotion of domestic manufacturing of bulk drugs and medical devices.Replacement of Criteria of ‘Minimum threshold’ investment with ‘Committed Investment’ by the selected applicant.

About Puducherry:

Capital– Puducherry
Governor– Telangana Governor Tamilsai Soundararajan has been given additional charge after Kiran Bedi removed as Lieutenant Governor of Puducherry





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