The government has extended, for a second time, the deadline for applying for incentives under a Rs 10,683-crore Production-Linked Incentive (PLI) scheme for the textiles & garment sector, to give more time to companies to weigh their investment plans. Interested firms can now submit their applications until February 28.
Last month, the textiles ministry had extended the deadline for the first time from January 31 to February 14. Since the guidelines were notified in late December 2021 and applications were sought only from January 1, the government thought it prudent to extend the deadline, senior industry executives said.
Under the scheme, incentives will be extended for five years. It will remain operational until 2029-30. Manufacturers of select man-made fibre and technical textile products will be granted incentives up to 15%.
Investors will have to set up new subsidiaries to get the benefits. The scheme is open to two categories of investors. Those who will invest at least Rs 300 crore will be eligible for a 15% incentive in the first year if they achieve a turnover of Rs 600 crore or more.
Similarly, those investing at least Rs 100 crore will get 11% in the first year if their turnover hits Rs 200 crore or more. After the first year, both the categories of investors will have to show a 25% incremental turnover annually. But the benefits will drop by 100 basis points with each passing year in both the cases. Companies will get two years to set up the plants. But if they can establish the facilities earlier than that, they will get incentives early too.
This is part of the 13 PLI schemes announced by the government in the wake of the Covid-19 pandemic last year, to encourage mainly large corporations to expand manufacturing, bolster supply chains and boost exports.
The total incentives under the PLI schemes, covering sectors including telecom, electronics, auto part, pharma and chemical cells, were initially estimated at Rs 1.97 lakh crore over a five-year period. The schemes, put together, are expected to catalyse incremental manufacturing of as much as $520 billion over five years.