The Union Cabinet meeting chaired by the Prime Minister Narendra Modi is scheduled to take place today and there are some important decisions including a relief package for debt strapped telecom companies and PLI for auto companies that are expected to come. The production-linked incentive (PLI) scheme for the automobile sector, which is on the cards, aims at promoting domestic manufacturing and creating jobs. The government is believed to have slashed the outlay for this PLI scheme to about Rs 26,000 crore. The PLI scheme for the automotive industry is a part of the Union Budget for 2021-22, with an outlay of Rs 1.97 lakh crore covering the overall production-linked incentives for at least 13 sectors. The scheme is aimed at bringing scale in key sectors of the economy as well as create and nurture global champions. In the past, many people and industry bodies have raised voices in favour of this scheme, SIAM had previously said that the PLI scheme will also increase competitiveness in the automotive sector as well as take its growth to the next level. On the other hand, Anand Mahindra, chairman, Mahindra and Mahindra has praised the scheme and called the initiative “a dramatic shift in attitude towards the auto industry”.
However, the government had announced the scheme for the automobile and auto components sector with an outlay of Rs 57,043 crore, for five years. Under the PLI scheme for the auto sector, component segments that are expected to be covered under the scheme include automatic transmission assembly, electronic power steering system, sensors, supercapacitors, sunroofs, adaptive front lighting, automatic braking, tyre pressure monitoring system, and collision warning system.
Apart from the PLI for the auto sector, a relief package for debt strapped telecom companies is on the cards and something may come out from today’s cabinet meeting. There was expectation that a relief package for telcos would come on September 8, the last cabinet meeting. Among the measures being discussed for the telecom sector are four-year moratorium on payments, AGR and spectrum, redefinition of AGR to exclude non-telecom items, and a cut in spectrum usage charges. In addition to all these measures, some concrete measures are expected to ease the cash flow issues being faced by some players in the industry. On Wednesday, a moratorium on payment of spectrum dues by telecom firms as part of a package for the sector aimed at giving relief to companies can also come. Telecom companies like Vodafone Idea have to pay thousands of crores of rupees in unprovisioned past statutory dues.
As many media houses reported, the relief package under consideration,. The telecom firms will get an option to convert interest on spectrum dues of the four-year moratorium period into government equity. Almost a week ago, some key decisions were taken in the Union Cabinet meeting that had approved the proposal for production-linked incentive (PLI) scheme for specific segments in the textiles sector. According to rating agency, ICRA, the telecom companies in India are likely to witness a rise in their debt levels to Rs 4.7 lakh crore by March 2022 despite tariff hikes.
The decision was taken in a meeting which was chaired by Prime Minister Narendra Modi. The cabinet had approved the PLI scheme for textiles for MMF (man-made fibre) apparel, MMF fabrics and ten segments/products of technical textiles with a budgetary outlay of Rs 10,683 crore that will be provided over 5 years.
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