The government on Tuesday assured India Inc that it was willing to “resolve all issues” faced by potential investors in the manufacturing sector when it comes to availing the production-linked incentive (PLI) schemes.
It sought inputs from beneficiaries of PLI scheme and industry associations for its improved functioning and better impact. In a day-long workshop on the scheme, the first even since its launch in March 2020 feedback and suggestions were sought from representatives of the 14 sectors where the scheme is operational.
Apart from industry associations and companies, representatives of Export Promotion Councils also participated.
From the government side, officials of the individual ministries who are responsible for the 14 sectors attended the meeting. At the meeting, the four project management agencies of the scheme also presented their insights on the scheme implementation.
The Industrial Finance Corporation of India is handling 10 sectors under PLI, Small Industries Development Bank of India two schemes, Metallurgical and Engineering Consultants and IREDA and Solar Energy Corporation of India are managing one sector each.
The feedback received at the workshop could form the basis of further tweaks in the schemes and way it is being run so that it’s objectives are fully met.
The scheme, which started with announcement of incentives for pharma, medical devices and large scale electronics, was later expanded to other sectors. Now, 14 sectors are covered by the scheme and outlay for incentives has been kept at `1.97 trillion. The incentive package for each sector runs for five years and as new sectors have been added to it over time the scheme will run till 2028.
Since the start of the scheme, only Rs 2,900 crore of incentives have been disbursed and one reason pointed out for the slow offtake is that it is complicated. An investor has to fulfil many criteria to qualify for inclusion under the scheme and claim incentives.
The payment of a claim of Rs 900 crore of incentives by Korean mobile manufacturer Samsung has got stuck in the maze of rules of PLI, according to reports. The company’s representatives have been quoted in the media reports saying that they are in the advanced stage of talks with the government for the redressal of the issue.
Of the 14 sectors covered by PLI, activity has been visible only in eight sectors — large scale electronics, telecom, pharmaceuticals, food processing, white goods, and auto and auto components.
Tuesday’s meeting also discussed the reason for slow offtake in sectors like high efficiency solar PV modules, Advance Chemistry Cell (ACC) Battery, Textile Products, and Specialty Steel.
The officials have said earlier that some relaxations might be given or changes made in the scheme for the sectors where off-take is low.
Last month the government has come out with PLI 2.0 for IT hardware.
Till March, the government has approved 733 applications under PLI and Rs 62,500 crore of actual investment has been made. The investment has driven incremental production of Rs 6.75 trillion and exports of Rs 2.6 trillion till 2022-23.