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Under PLI scheme at least six of eight sectors to switch to quarterly disbursals
Industry News- Jun 29,24
DPIIT is planning to hold the next stakeholder review after the budget announcement for 2024-25.
The Production Linked Incentive (PLI) scheme is set to transition to quarterly disbursement of incentives for at least six of the eight sectors that currently receive annual payments. These sectors include automobiles and parts, telecom and networking, electronics products, white goods, food products, textile products, and drones, aiming to expedite claim processing, sources said.
“The most successful PLI scheme so far, in terms of investments and production, is that of smartphones, which already has a provision for quarterly disbursement. The government concluded that this frequency is a strong incentive and should be extended to the remaining sectors,” an official tracking the matter told the source.
The Department for Promotion of Industry and Internal Trade (DPIIT), the nodal department for the PLI scheme, plans to hold the next stakeholder review of the scheme next month or just after the budget announcement for 2024-25, the official added.
Apart from increasing the frequency of incentive disbursements, the government is considering revamping the scheme in several sectors, such as textiles, white goods, electronics, and solar PVs, to make it more attractive to investors.
The quarterly disbursement of funds is likely to start in one or two months, as it will take some time for the line Ministries and Departments to complete the necessary processes. “Most of the eight sectors, except one or two such as speciality steel and solar PV modules, where proper disbursement of incentives is yet to begin, are expected to manage the switchover soon,” the official said.
In 2021-22, the government announced the PLI scheme with an outlay of Rs 1.97 trillion, initially covering 13 sectors and later extended to 14, to incentivise local production in strategic areas and encourage exports. These sectors include mobile manufacturing and specified electronic components; drug intermediaries & APIs; medical devices; automobiles and auto components; pharmaceuticals drugs; specialty steel; telecom & networking products; electronic/technology products; white goods (ACs and LEDs); food products; textiles (MMF segment and technical textiles); high-efficiency solar PV modules; ACC batteries; and drones & components.
While the scheme has shown excellent results for the mobile manufacturing sector, it has also started to gain traction in some sectors, such as the three pharmaceutical-related sectors and the IT hardware sector. However, other sectors still have a long way to go.
According to the latest estimates, the PLI scheme has attracted Rs 1.5 trillion in investments, led to production worth Rs 8-9 trillion, of which Rs 3-3.5 trillion were exported, the official said. The total disbursement of incentives reached ?100 billion, but this amount was primarily concentrated in just a handful of sectors.
In addition to increasing the frequency of incentive disbursements, the government is looking to revamp the scheme in several sectors, including textiles, white goods, electronics, and solar PVs, to make it more appealing to investors, the official added.
(Source: BusinessLine)
PLI
DPIIT
automobiles and parts
telecom and networking
electronics products
white goods
food products
textile products
drones
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