InvestorQ : Can you tell me about the latest product linked incentive scheme announced by the government for pharma and IT hardware?
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Can you tell me about the latest product linked incentive scheme announced by the government for pharma and IT hardware?

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Rashi Mehra answered.
3 months ago
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Here are some of the key highlights of the product linked incentive or PLI scheme announced by the government with specific focus on IT hardware and pharma.

· On 24 February, the Cabinet approved the PLI Scheme valued at Rs.15,000 crore for high value pharma products and Rs.7350 crore for IT hardware products.

· The overall allocation for PLI scheme is Rs.145,000 crore and is intended to boost domestic manufacturing, give a thrust to exports and also to become self-sufficient.

· It is estimated that as a result of the PLI scheme announced by the government, the pharma sector will see incremental sales of Rs.294,000 crore over 6 years.

· The icing on the cake is that out of this sales boost of Rs.294,000 crore nearly Rs.196,000 crore will be by way of exports over the next 6 years, a boost to trade deficit reduction.

· This boost to domestic production in the pharma space by the PLI scheme will create 20,000 direct and 80,000 indirect jobs in the pharmaceutical sector.

· In the IT hardware segment, it is estimated that the PLI scheme will result in an increase in the domestic component of IT hardware from 5% to 25% over next five years.

· In the IT hardware space, it is estimated that the PLI scheme will result in additional output to the tune of Rs.326,000 crore in the next five years.

· Out of this Rs.326,000 crore of total output enhancement created, it is estimated that nearly Rs.245,000 worth of sales will be by way of exports to other nations.

· This move is also expected to be substantially accretive to the creation of jobs and downstream businesses in the IT hardware and software space. 

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