Production Linked Incentive Scheme

Production Linked Incentive Scheme 

What is background for Production Linked Incentive Scheme (PLI)?

You got to the right track for knowing about Production Linked Incentive Scheme (PLI).

Government of India has given three announcements on 2^nd April 2020, amid of a confused and timid situation that Covid-19 has brought in.

These three announcements are:

• The Production Linked Incentive Scheme (PLI) for large scale electronics manufacturing.
• The scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS).
• Modifications for Electronic Manufacturing Cluster (EMC2.0) Scheme.

What is Production Linked Incentive Scheme (PLI)?

This article garners information related to PLI scheme.

Production Linked Incentive scheme provides financial incentive for the manufacturing companies, to boost domestic manufacturing, subjected to incremental investments and sales.

When Production Linked Incentive Scheme (PLI) came into existence?

Coming to the scheme’s chronological announcements,

On 1^st April 2020, the cabinet has announced this scheme under three sectors, awarding 51,311crs as total financial outlay. Later on 11^th November 2020 this scheme has been expanded to 10 more sectors awarding 1,45,980crs as financial outlay .Then , 1^st February 2021 our Financial Minister smt. Nirmala Sitaraman has proposed to disburse 1.97 million crores in the Union Budget 21-22 pertained to this scheme.

All about Production Linked Incentive Scheme (PLI).

This scheme provides incentive, to the companies which got approved, on incremental sales of goods manufactured in India over the base year which is FY2019-2020. The rate of incentive varies from sector to sector and from time to time, which is provided through notifications. The eligibility for the incentive is to get approved on the first stage and meet the thresholds in the given period of time yearly. To get approved, a company needs to apply for the scheme, in set time period, with related ministries (you  can get related Ministries down I the table).  

Sector	Ministry / Department	Total Financial Outlay	Notification Released  Date
Mobile Manufacturing and Specified Electronic Components	MEITY	40951	1st April 2020
Critical Key Starting materials/Drug Intermediaries and Active Pharmaceutical Ingredients	Department of Pharmaceuticals	6940	22 August 2020
Manufacturing of Medical Devices.	Department of Pharmaceuticals	3420	29 October 2020
Advance Chemistry Cell (ACC) Battery	NITI Aayog and Department of Heavy Industries	18100	11th November 2020
Electronic/Technology Products	Ministry of Electronics and Information Technology	5000
Automobiles & Auto Components	Department of Heavy Industries	57042
Pharmaceuticals drugs	Department of Pharmaceuticals	15000
Telecom & Networking Products	Department of Telecom	12195
Textile Products: MMF segment and technical textiles	Ministry of Textiles	10683
Food Products	Ministry of Food Processing Industries	10900
High Efficiency Solar PV Modules	Ministry of New and Renewable Energy	4500
White Goods (ACs & LED)	Department for Promotion of Industry and Internal Trade	6238
Speciality Steel	Ministry of Steel	6322

Insights of Production Linked Incentive Scheme (PLI).

 Production Linked Incentive scheme provides financial incentive to boost domestic manufacturing subjected to incremental investments and sales. This scheme across 13 sectors will make Indian manufacturers globally competitive and attracts investment in the areas of core-competency with cutting-edge technology and high efficiency, which could enhance  exports and make India an integral part of global supply chain. Growth in domestic manufacturing enhances exports and asserts imports in support to the 'AatmaNirbhar Bharat' call. Increasing efficiency for manufacturing units helps in employment creation and generates investments steeply which not only integrates global supply chains but also creates backward linkages with MSMEs in the country.

Outlook of Production Linked Incentive Scheme (PLI)

This Scheme is very timely, considering the current economic scenario where companies are looking for re-engineering their manufacturing and supply chain operations. However, disbursement of incentives would be one of the key factors for the success of this scheme, which leads to overall growth in the economy, which is much needed lifesaver. We hope the best outcome, from this scheme, for the economic growth.