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Govt adds Rs 19,041 crore to BharatNet budget, extends electronics manufacturing PLI by one year

Picture of broadband cables

The PLI scheme was announced last year to boost manufacturing in the domestic electronics sector which has been hit hard by the pandemic

In a press conference announcing stimulus measures to address the second wave of the COVID-19 pandemic, Finance Minister Nirmala Sitharaman announced that the BharatNet project would get Rs 19,041 crore in additional funds to meet rural fibre rollout goals. BharatNet is a long-delayed project by the government to get fibre broadband in all gram panchayats. The goal has been paralysed by its nature and bureaucracy. The project is being implemented as a public-private partnership. “Total outlay will be Rs. 61,109 crores including an already approved amount of Rs. 42,068 crores in 2017,” the government said in its presentation.

In spite of large allotments of money, the project is a “middle mile” endeavour, meaning that even if fibre cables have reached the villages they are intended to serve, they still have to be connected throughout the “last mile,” and eventually be accessed by users. Prime Minister Narendra Modi has added to years of promises on connectivity, promising that all inhabited villages would be connected by late 2022. 62% of gram panchayats are “service ready,” which essentially means the middle mile has reached them.

PLI scheme extended

The Production-Linked Incentive scheme for Large Scale Electronics Manufacturing was announced last year to encourage domestic electronics manufacturing. The scheme provides 4–6% incentives for electronic goods produced in India, such as phones. A key condition emerged as a pain point for manufacturers — incremental sales over a previous year.

With 2019–20 as the base year, and the pandemic unfurling in the following year, manufacturers said they couldn’t achieve the goal of selling more electronics over the base year. Sitharaman said that as such, the government was proposing a one-year extension to the scheme, a relief to the sector that will require — and likely get — approval from the Cabinet.

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The five-year scheme has included a concession that “participating companies will get an option of choosing any five years for meeting their production targets under the scheme.”

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