According to a recent government notification, the government will consider up to 20 times the value of incremental sales of telecom gear manufacturers for giving out production linked incentive.

The incentive will be given in the range of 4-7 per cent of the incremental sales value to micro, small and medium enterprises (MSMEs) and 4-6 per cent to the rest of the companies for manufacturing telecom equipment under the scheme.

As can be inferred from the notification, telecom gear makers will need to achieve at least three times higher value in sales compared to the investment they are required to make in their plant, other than land and building.

The investment and incremental sales will be calculated from the financial year 2019-20.

The government has set a minimum investment threshold of Rs 100 million for MSMEs and Rs 1 billion for others, which excluded investment in land and building.

The PLI scheme will be applicable on broadband transmission equipment, 4G and 5G wireless equipment, Wi-Fi access points, routers, fibre-to-the-home gears, network switches etc.

The PLI scheme is slated to come into effect from April 01, 2021.