Figure 2: No Copyright Infringement Intended

Context:

• Recently, Cabinet has approved the PLI schemes for Drones and Drone Components.

Need for the PLI Scheme:

• Drones offer tremendous benefits to almost all sectors of the economy.  These include– agriculture, mining, infrastructure, surveillance, emergency response, transportation, geo-spatial mapping, defence, and law enforcement to name a few. 
• Drones can be significant creators of employment and economic growthdue to their reach, versatility, and ease of use, especially in India’s remote and inaccessible areas.      
• Given its traditional strengths in innovation, information technology, frugal engineering and its huge domestic demand, India has the potential of becoming a global drone hub by 2030.
• The PLI scheme and new drone rules are intended to catalyse super-normal growth in the upcoming drone sector. 

Expected Outcomes from the Schemes:

• the drones and drone components manufacturing industry may see an investment of over INR 5,000 croreover the next three years. 
• The annual sales turnover of the drone manufacturing industry may grow from INR 60 crore in 2020-21 fold to over INR 900 crorein FY 2023-24. 
• The drone manufacturing industry is expected to generate over 10,000 direct jobsover the next three years. 
• The drone services industry (operations, logistics, data processing, traffic management etc.) is far bigger in scale. 
• It is expected to grow to over INR 30,000 crorein next three years. The drone services industry is expected to generate over five lakh jobs in three years.
• PLI will encourage indigenisation and the Drone Policy will galvanise usage of drones. Now the costs can only come down with scale-up.

Features of the Scheme:

• The incentives will be as high as 20 percent of the value addition made. The government has also agreed to keep the PLI rate constant at 20 percent for three years.
• The PLI scheme for drones will be extended or redrafted after studying its impact in consultation with the industry.
• It also includes the coverage of the incentive scheme to include developers of drone-related IT products.
• the value addition will be calculated as the annual sales revenue from drones and drone components (net of GST) minus the purchase cost (net of GST) of drone and drone components.
• the government has agreed to fix the minimum value addition norms at 40 percent of net sales for drones and drone components instead of 50 percent.
• The PLI scheme covers a wide variety of drone components including airframes, propulsion systems (engine and electric), power systems, batteries and associated components, launch and recovery systems, Inertial Measurement Units, Inertial Navigation Systems, flight control modules and ground control stations and associated components. 
• the annual sales turnover have been fixed at a nominal level of Rs 2 crore (for drones) and Rs 50 lakh (for drone components). This will allow widening the number of beneficiaries. 

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