The government expects Rs 10,000-crore investment under production-linked incentive (PLI) for speciality steel in FY25. The amount will be over and above the Rs 16,000 crore expected in this financial year.
Till December-end, companies selected under the PLI for speciality steel have invested Rs 12,900 crore and another Rs 3,000 crore is expected before March, according to the ministry of steel. Companies had committed investments of Rs 21,000 crore by the end of this financial year.
As investments pick up in speciality steel and production comes on stream, the interim Budget has provided Rs 270 crore for payment of incentives for FY25. For this financial year, only a token sum of Rs 2.36 crore has been provided in the revised estimates.
Under the scheme, 57 MoUs have been executed for generating an additional capacity of 25 MT for producing speciality steel grades with an investment of Rs 29,500 crore. The PLI for speciality steel was notified in July 2021.
Five speciality steel units have begun production and nine more facilities are expected to begin production in this quarter.
“The ministry of steel and other relevant government departments have been proactively engaging with the PLI beneficiaries to resolve issues faced by companies and facilitate them to meet their commitments under the scheme,” the statement by the ministry said.
Measures have been taken to expedite clearances for projects, issue standard operating procedures for Indian visas for experts and to address the concerns of the participating companies by continuous engagement with the stakeholders, the statement added.
Typically, investments in the steel sector have a long gestation period and depend on procurement of various equipment, many of which are sourced from abroad.
Delays due to unavoidable circumstances in the projects include supply chain delays due to geopolitical issues, unforeseen events, natural disasters and changed market circumstances for certain PLI products also have an impact on the pace, phasing and the quantum of investment, the ministry said while trying to dispel the notion that the offtake of PLI in speciality steel has been sluggish.
The government is running PLI schemes for 14 sectors, including telecommunication, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high-efficiency solar PV modules, advanced chemistry cell battery, drones and pharma, with an outlay of Rs 1.97 trillion.
The schemes aim to attract investments in key sectors and cutting-edge technology; ensure efficiency, bring economies of size and scale in the manufacturing sector and make Indian companies and manufacturers globally competitive.
Of the Rs 1.97 trillion, the government has only disbursed Rs 4,415 crore to the PLI beneficiaries so far. As of date, 746 applications have been approved in 14 sectors with an expected investment of over Rs 3 trillion.