Taking another step towards the vision of ‘Atmanirbhar Bharat’, on 11th November 2020, the Union Cabinet chaired by the Prime Minister, Shri Narendra Modi Ji approved the Production-Linked Incentive (PLI) Scheme in following 10 key sectors for Enhancing India’s Manufacturing Capabilities and Enhancing Exports.
Priority | Sector (Click on respective sector to read about the scheme) | Implementing Ministry / Department | Approved Financial outlay over a Five-Year Period (Rs. Crore) |
1 | Advance Chemistry Cell (ACC) Battery |
NITI Aayog and Department of Heavy Industries
| 18,100 |
2 | Electronic Technology Products |
Ministry of Electronics and Information Technology
| 5,000 |
3 | Automobile& Auto Components
|
Ministry of Heavy Industries and Public Enterprises – Department Of Heavy Industries
| 57.042 |
4 |
Ministry of Chemicals & Fertilizers – Department Of Pharmaceuticals
| 15,000 | |
5 |
Ministry of Communications – Department of Telecommunications
| 12,195 | |
6 | Textiles Products: MMF segment and technical textiles | Ministry of Textiles | 10,683 |
7 |
Ministry of Food Processing Industries
| 10,900 | |
8 |
Ministry of New and Renewable Energy – Grid Solar Power Division
| 4,500 | |
9 |
Ministry of Commerce & Industry – Department for Promotion of Industry and Internal Trade
| 6,238 | |
10 | Speciality Steel |
Ministry of Steel
| 6,322 |
Earlier In March 2020, the government had introduced PLI in the following key sectors:
- Medical devices manufacturing
- API/DI/KSMs manufacturing
- Electronics manufacturing
PLI schemes are a cornerstone of the Government’s push for achieving an “Atmanirbhar Bharat”. These schemes will provide financial incentives to boost domestic manufacturing and attract investments.
- To make Indian manufacturers globally competitive
- Attract investment in the areas of core competency and cutting-edge technology, ensure efficiencies, create economies of scale
- To enhance exports and make India an integral part of the global supply chain
- Offer companies incentives on incremental sales from products manufactured in India, over the base year (generally taken as FY 2019-20)
- Specifically designed to boost domestic manufacturing in sunrise and strategic sectors
- Curb cheaper imports and reduce import bills
- Improve cost competitiveness of domestically manufactured goods
- Enhance domestic capacity and exports
The PLI scheme are implemented by the concerned ministries/departments through a Project Management Agency (PMA) that will be responsible for secretarial, managerial and implementation support. Following major steps are involved under the schemes;
- Making an application:
An eligible applicant has to make an application complete in all respects, which is to be submitted before the due date. Eligibility criteria is based on factors such as such as investment commitment, capacity creation and/or incremental turnover.
- Selection of Application:
The applicants will be appraised and considered for approval, based on predefined selection criteria.
- Disbursement of Incentive:
The incentives will be released to the selected applicants based on factors such as minimum investment criteria, minimum growth in sales etc.
The incentives under the scheme are given based on the incremental sales from products domestically manufactured.
Manufacturers in India are also offered incentives packages by the states, allowing them to recoup approximately 30%-100% of their investment. These usually comprise of:
- Capital linked incentives with subsidy as a percentage of investment
- Expenditure linked incentives like power tariff subsidies, stamp duty reimbursement
- Sales linked incentives like SGST reimbursement, turnover based subsidy
Investors can avail incentives from both the Centre and the State simultaneously, subject to the provisions of scheme.