Budget 2022: New twist to PLI with design-led manufacturing for 5G

In the telecom related announcements by Union Finance Minister, Nirmala Sitharaman, the scheme for design-led manufacturing to build a strong ecosystem for 5G as part of the Production Linked Incentive (PLI) Scheme is new. That makes sense since much of 5G is software driven. “It could be a means to create IP in India and help bring greater focus to R&D in India,” says Prashant Singhal, TMT Emerging Markets Leader at EY.

This is a new version of the PLI scheme as it focuses on design. That’s important as 5G is more dependent on software. This could help build cross-sector collaboration in design and R&D. It could help tower companies that are looking at launching green cell and small cell technology to participate. All this fits in with the Digital India vision of the government. “Extending the PLI scheme to 5G roll-out and the commitment to roll out fibre in all villages by 2025 will give an additional thrust to investment in new technologies in the telecom sector,” says Peeyush Vaish, partner and telecom sector leader, Deloitte India.

She also reiterated that the auction of 5G spectrum will be conducted in 2022 so that telecom service providers are in a position to roll-out services during 2022-23. It has been known that auctions for 5G spectrum could happen in May-June this year. The roll-out of 5G could happen much faster since there is talk of fiberisation of all villages by 2025.

The scheme to offer affordable broadband and mobile services in rural and remote areas by using 5% of annual collections under the Universal Service Obligation Fund is also not new. All along the USO Fund was meant for rural connectivity. The government's aim that all villagers should have the similar access to e-services, communication facilities, and digital resources as urban residents is also not new. The contracts for laying optical fibre in all villages, including remote areas are expected to be awarded under the Bharatnet has also been on for a while.