Union Cabinet takes charge of approvals for compound semiconductors, display fabs under PLI scheme

In a significant development, the Union Cabinet will now hold the authority to issue approvals for the establishment of compound semiconductors and display fabs assembly and test units under the Ministry of Electronics and IT's (MeITY) production-linked incentive (PLI) scheme, according to a government notification released on June 10.

Previously, the MeITY Secretary was responsible for granting approvals for applications valued up to Rs 100 crore, while those exceeding this threshold were evaluated by the Union Minister for Electronics and IT. However, the latest notification from the MeITY has eliminated this categorisation, thereby designating the Union Cabinet as the sole authority responsible for approving applications under the PLI scheme.

"The applications shall be appraised and evaluated individually on an ongoing basis. The Ministry of Electronics and Information Technology will submit the applications for approval to the Union Cabinet," the notification stated.

The PLI scheme, known as the "Modified Programme for Semiconductors and Display Fab Ecosystem," was initially introduced in December 2021 with a total outlay of Rs 76,000 crore. In an effort to attract global investors with more enticing incentive support, the scheme underwent revisions in September of the following year.

Previously, the scheme offered incentives with varying levels of fiscal support, ranging from 30 per cent to 50 per cent. However, the government later made the support uniform, committing to funding 50 per cent of the project cost across all technology nodes for the establishment of semiconductor fabs. This includes not only cutting-edge computing chips but also those utilised in the power, telecom, and automotive sectors.

With the Union Cabinet now holding the authority to grant approvals for applications under the PLI scheme, it is expected to streamline the decision-making process and provide a centralised and efficient system for evaluating and promoting the development of compound semiconductors and display fabs in India. This move aligns with the government's ongoing efforts to bolster domestic manufacturing and attract investments in the electronics and IT sectors.

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