Mobile PLI Scheme Has Delivered, but Full Audited Account Needed: Former IAS KBS Sidhu

Mobile PLI has earned its credit; it should now publish its full account

Former Special Chief Secretary, Punjab, KBS Sidhu responds to the Union Minister’s post on the benefits of PLI

Responding to Union Minister Ashwini Vaishnaw’s assertion on X (formerly Twitter) on 28 October regarding the benefits of the production-linked incentive (PLI) scheme for mobile phones, KBS Sidhu, former Special Chief Secretary and Principal Secretary (Finance), Punjab, today welcomed the scheme’s results and urged the Union Ministry of Electronics and IT to back them with a public, audited account.

“India went from importing most of its phones to exporting nearly $30 billion worth a year. The scheme paid only for output actually achieved, about ₹19,000 crore against a budget of ₹34,193 crore. Few industrial subsidies can say that,” Mr Sidhu said.

He added that the recent Bloomberg Opinion critique was not entirely fair. “Japan, Korea, Taiwan and China all began with assembly. Judging India on six years against China’s thirty is not a fair test. A subsidy-per-worker yardstick also ignores the foreign exchange saved on phones no longer imported, the supplier base taking root, and the strategic value of not depending on one hostile neighbour. And the United States, through its CHIPS Act, is subsidising on a far larger scale.”

He said four points in the Minister’s figures need clarification:

1. GST. The Minister’s post cites ₹3,00,000 crore in GST; wire reports carried ₹3,000 crore. In either case, GST on phones is paid by Indian consumers, and exports are zero-rated, so it should not be counted as a return on the incentive.
2. Jobs. Parliament was told of 1.37 lakh additional direct jobs under the electronics PLI up to December 2024; the Minister now cites 12 lakh in mobile manufacturing. The difference between jobs created by the scheme and jobs in the sector should be stated, and verified against EPFO payroll records.
3. Value addition. Domestic value addition stands at about 18–20 per cent, against an original aim of 40 per cent. With ₹62,500 crore committed to PLI 2.0, the Ministry should publish net foreign-exchange earnings: handset exports minus component imports.
4. Safeguards. Every export-linked benefit attracts paper exports. The Ministry should state how PLI claims are matched with customs shipping bills, IMEI data, foreign-remittance receipts and overseas activation, and what has been disallowed or recovered.

Mr Sidhu, who is also Convener of the Shiromani Punjab Forum, a non-partisan think tank, noted that mobile manufacturing has concentrated in Tamil Nadu, Karnataka and Uttar Pradesh, while Punjab, home to India’s oldest government chip facility, the Semi-Conductor Laboratory at Mohali, has no PLI handset unit. “Viksit Bharat cannot be built in three or four corridors. PLI 2.0 and the components scheme should actively bring states like Punjab in,” he said.

He called for an annual beneficiary-wise PLI scorecard and an independent evaluation by NITI Aayog or the CAG before PLI 2.0 payouts scale up.

Read the full analysis: PLI-Incentivised Handset Exports: The Summation of Credits and Debits — The KBS Chronicle

For further information: KBS Sidhu · kbs.sidhu@gmail.com · kbssidhu.substack.com