Fresh row over Rs 41k crore sops for electronic makers

New Delhi: The Department of Revenue and the handset industry, backed by the IT ministry, are at odds over the implementation of the much-touted Rs 41,000-crore production-linked incentive scheme to boost local manufacturing and exports. The revenue department wants a budgetary allocation of the incentive. But industry fears such a mechanism will delay payments, and instead is pushing for an 'offset' mechanism, at least for the exports component.

"The (outgoing) Merchandise Exports Incentive Scheme (MEIS) was a duty credit scrip. These scrips were automatically linked to exports, once exports were recognised the scrip was generated and credited to your account smooth and instant," said an executive of a global supply chain company, who didn’t wish to be named.

But Wednesday’s notification of the PLI scheme, applicable from August 1, puts in place a mechanism which essentially means a cash payment after verifying the documents, a mechanism the industry says could really delay or stall payments.