NEW DELHI: The Union Cabinet on Wednesday approved the expansion of Production-Linked Incentive (PLI) Scheme to 10 more key sectors at an additional cost of Rs 1.46 lakh crore spread over a period of five years with the twin aims of strengthening domestic manufacturing capability and reducing import dependence.
The PLI scheme already exists in three sectors at a total outlay of Rs 51,311 crore. The maximum allocation under the existing scheme is of Rs 40,951 crore for mobile manufacturing and specified electronic components to reduce the import dependency on China. Another PLI scheme for critical key starting materials in the pharma sector is being given Rs 6,940 crore and Rs 3,420 crore is for the manufacturing of medical devices.
This expansion of the scheme – over three times each in terms of product categories and financial outlay—will make Indian manufacturers globally competitive, attract investment in the areas of core competency and cutting-edge technology and make India an integral part of the global supply chain, said an official news release after the Cabinet meeting chaired by PM Narendra Modi.
The new 10 sectors with their outlays are as follows: Advance Chemistry Cell (ACC) battery Rs 18,100 crore, Electronic/Technology Products Rs 5,000 crore, Automobiles & Auto Components Rs 57,042 crore, pharmaceuticals and drugs Rs 15,000 crore, Telecom & Networking Products Rs 12,195 crore, Textile Products Rs 10,683 crore, Food Products Rs 10,900 crore, High Efficiency Solar PV Modules Rs 4,500 crore, White Goods (ACs & LED) Rs 6238 crore and Speciality Steel 6322 crore.
The PLI scheme will be implemented by the ministries concerned and will be within the prescribed financial limits. Savings, if any, from one PLI scheme of an approved sector can be utilised to fund that of another approved sector. Any new sector for PLI will require fresh approval of the Cabinet.
ACC battery manufacturing is one of the largest economic opportunities of the twenty-first century for consumer electronics, electric vehicles and renewable energy. The PLI scheme will encourage large domestic and international players to set up a competitive ACC battery set-up in the country.
For the automotive industry, the scheme will focus on making it more competitive. The Indian pharmaceutical industry, third largest by volume, will encourage the global and domestic players to engage in high value production.
The PLI scheme in telecom equipment is expected to attract large investments from global players and help domestic companies seize the emerging opportunities and become big players in the export market.
For textiles, it aims to attract large investments, especially in the MMF segment and technical textiles. In food processing, it will focus on specific product lines with high growth potential to generate medium- to large-scale employment.
As large imports of solar PV panels pose risks in supply-chain resilience and have strategic security challenges, a PLI scheme will enable the buildup of large-scale solar PV capacity in India. In white goods, it will lead to more domestic manufacturing and increased exports. For steel, the PLI scheme will be for export-oriented value added steel leading.
The Prime Minister’s clarion call for an ‘AatmaNirbhar Bharat’ envisages policies for the promotion of an efficient, equitable and resilient manufacturing sector in the country.
Growth in production and exports of industrial goods will greatly expose the Indian industry to foreign competition and ideas, which will help in improving its capabilities to innovate further.
Promotion of the manufacturing sector and creation of a conducive manufacturing ecosystem will not only enable integration with global supply chains but also establish backward linkages with the MSME sector in the country. It will lead to overall growth in the economy and create huge employment opportunities, said an official news release.