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For FY21, Centre Holds Samsung’s Incentive Of Rs 900 cr Under The PLI Scheme

Invoice problems have apparently caused the central government to delay paying Samsung Electronics under the production-linked incentive (PLI) plan for FY21, as stated by The Financial Express.

The report claims that there were discrepancies between Samsung’s claimed increase in output and sales and the Centre’s calculated figure. 

Since Samsung was the only company eligible for PLI in FY21, the Korean IT giant had asked for incentives totaling roughly Rs 900 crore, but the Centre’s estimates put the amount far lower. 

The Centre has requested clarifications from the firm before releasing the incentive payment – “At the moment we cannot say when the incentive amount would be disbursed to the company and how much,” officials said to the newspaper.

Meanwhile, on September 9 the Centre approved 32 recipients under the PLI plan for large-scale electronics production for FY22, hence Samsung’s delay in payout comes at an inappropriate time. 

Depending on its incremental investment & sales numbers for the fiscal year, domestic company Padget Electronics was the first to receive a payout of roughly Rs 50 crore. In addition to Samsung and Apple’s contract manufacturers Wistron, Foxconn, & Rising Star are all eligible for incentives this year. 

A total of ten companies, five international and five domestic, will receive incentives from the government under the PLI plan starting in August 2020. 

According to FE, which cited unnamed industry insiders, Samsung’s incremental sales for FY21 amounted to about Rs 15,000 crore, the maximum amount at which the incentive could be claimed. 

A smartphone company may expect to spend a total of Rs 40,951 crore over the course of five years, plus an incentive of about 4-6 percent per year. The incentive pool for FY21 was Rs 5,334 crore, with an incremental sales threshold of Rs 4,000 crore as well as a maximum of Rs 15,000 crore. 

The government’s incentive to Samsung was calculated to be Rs 900 crore (6% of Rs 15,000 crore.


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