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Govt halts expansion of PLI Scheme, focusing on strengthening existing sectors
Industry News- Dec 18,23
It is anticipated that a decision on enlarging the list of sectors eligible for incentives to bolster domestic manufacturing capabilities will be deferred until the formation of a new central government next year.
The government has decided against expanding the scope and coverage of its Production-Linked Incentive (PLI) scheme during the ongoing fiscal year (2023-2024). It is anticipated that a decision on enlarging the list of sectors eligible for incentives to bolster domestic manufacturing capabilities will be deferred until the formation of a new central government next year.
According to Rajesh Kumar Singh, the Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) under the Commerce and Industry Ministry, there is no consideration for introducing a new PLI scheme. Singh stated on Thursday that the current schemes are deemed sufficient by the government, with the existing allocation meeting the requirements.
Singh emphasised, "Right now, the kitty is sufficient, and this government feels the allocation is sufficient." He mentioned that the output of PLI schemes this year has not met expectations, but the performance in terms of sales and exports has been reasonably good, without providing specific figures.
The government's current focus is directed towards strengthening and supporting the existing PLI schemes across 14 key sectors. This decision not to expand the scheme's scope will be a setback for sectors such as port and shipping, heavy industries, steel, and mining, which were anticipating new PLI schemes for manufacturing import substitution products.
Various sectors, including port and shipping, heavy industries, and steel, were exploring new PLI schemes. The Ministry of Ports, Shipping, and Inland Waterways was considering a PLI scheme for manufacturing shipping-grade containers, while the Heavy Industries Ministry was in talks for an incentive scheme related to grid-scale battery storage manufacturing.
Additionally, the steel sector was working on a proposal for another PLI scheme focused on manufacturing special steel and consumables. Singh mentioned the possibility of making a few tweaks to existing schemes.
In 2020, PLI schemes across 14 key sectors were announced with an outlay of Rs 1.97 trillion (over $26 billion) to enhance manufacturing capabilities. These sectors covered a range of industries, including mobile manufacturing, pharmaceuticals, automobiles, textiles, and more.
The objective of PLI schemes is to attract investments and cutting-edge technology, enhance efficiency, and bring economies of scale to the manufacturing sector, making Indian companies globally competitive. As of June 2023, 733 applications under the scheme across 14 sectors, with an expected investment of Rs 3.65 trillion, were approved, benefiting 176 MSMEs in various sectors.
Source: Mint
Rajesh Kumar Singh
Production-Linked Incentive
Department for Promotion of Industry and Internal Trade
Ministry of Ports
Inland Waterways
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