Cabinet approves relief measures for Telecom sector, Incentives for Auto sector
Union Cabinet on Wednesday approved major reforms and a four-year moratorium of payment of dues in the telecom sector and Rs.26,058 crore production linked incentive (PLI) scheme for auto, auto-components, and drone industries. The four-year moratorium in the AGR (Adjusted Gross Revenue) dues is a major relief to major telecom players Vodafone-Idea, facing acute financial problems and Airtel having combined due of more than Rs.80,000 crore. The Cabinet meeting chaired by Prime Minister Narendra Modi also approved a slew of measures in spectrum usage charges, sharing of spectrum, and 100 percent FDI in the telecom sector.
Briefing reporters on the decisions taken by the Cabinet, Telecom Minister Ashwini Vaishnaw said nine structural reforms for the telecom sector were approved. The definition of AGR, which had been a major reason for the stress in the sector, has been rationalized by excluding the non-telecom revenue of telecom companies. AGR refers to revenues that are considered for payment of statutory dues. The Minister said that 100 percent FDI (Foreign Direct Investment) in telecom via the automatic route was approved by the Cabinet. Among the measures approved was a four-year moratorium on unpaid dues, AGR, and spectrum dues, he said.
The telecom sector is one of the prime movers of the economy and the key enabler for making India a Digital Society, I welcome the Government of India’s announcement of reforms and relief measures that will enable the industry to achieve the goals of Digital India.
Biggest telecom player Reliance Industries Ltd (RIL) Chairman Mukesh D Ambani said the latest reforms and relief measures will enable the telecom sector to achieve goals set under the Digital India mission. “The telecom sector is one of the prime movers of the economy and the key enabler for making India a Digital Society, I welcome the Government of India’s announcement of reforms and relief measures that will enable the industry to achieve the goals of Digital India. I thank Prime Minister Narendra Modi for this bold initiative,” Ambani said.
The Union Minister Anurag Thakur said that Rs.26,058 crore production linked incentive (PLI) scheme for auto, auto-components, and drone industries to enhance India’s manufacturing capabilities. The PLI scheme will incentivize the emergence of advanced automotive technologies‘ global supply chain in India, added Thakur.
It is estimated that over a period of five years, the PLI scheme for the automobile and auto components industry will lead to a fresh investment of over Rs.42,500 crore, incremental production of over Rs.2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs, Thakur said. The PLI scheme for automobile and drone industries is part of the overall announcement of PLI schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of Rs.1.97 lakh crore.
The scheme for the auto sector envisages overcoming the cost disabilities to the industry for the manufacture of advanced automotive technology products in India. The incentive structure will encourage the industry to make fresh investments for the indigenous global supply chain of Advanced Automotive Technology products, Thakur said. The scheme for the auto sector is open to existing automotive companies as well as new investors who are currently not in the automobile or auto component manufacturing business. The scheme has two components – Champion OEM Incentive Scheme and Component Champion Incentive Scheme.
The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments, the Minister said. The Component Champion Incentive scheme is a ‘sales value linked’ scheme, applicable on Advanced Automotive Technology components of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles, and tractors.
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