The government has released Rs 4,415 crore as production linked incentives (PLI) to firms till December 2023, as against the target of disbursing Rs 11,000 crore by the end of the current fiscal.
This includes incentives of Rs 1,515 crore doled out in the current fiscal, including some dues to Samsung Electronics for mobile manufacturing that has recently been cleared. The PLI policy was launched in April 2020. Currently, there are as many as 14 PLI schemes.
Some part of the claims of Samsung for mobile production is part of the disbursement to PLI companies and remaining part has mostly gone to companies in the large scale electronics manufacturing, additional secretary in the Department for Promotion of Industry and Internal Trade Rajeev Singh Thakur said.
“Even though disbursements are (still low), we are hopeful because investments are on target and production is also on the right path,” Thakur said. Departments are stating that they will either achieve the disbursement target for this year or may reach near the target, he said.
When the claim was filed by Samsung in late 2022 for production in 2020-21, the government had questioned the basis on which the company had calculated its entitlement and asked the company to part with more details.
The examination by the government was on whether Samsung Electronics used inter-company transfer of phones to inflate invoices to claim higher incentives. The matter was settled and the company got about Rs 500 crore, sources said.
Thakur said there are 1,000 PLI supported manufacturing units operational or are in the process of coming up all over the country.
This year so far the investment by PLI companies has been to the tune of Rs 40,500 crore which takes the total to Rs 1.03 trillion so far. The incremental production and sales by PLI companies this year has been Rs 1.86 trillion and exports stood at Rs 66,000 crore. Additional jobs, both direct and indirect, created by PLI companies are 1.53 lakh this year. The total number of PLI applications that have been approved so far stands at 746.
Since the inception of the Rs 1.97 trillion scheme, total production by PLI companies has been Rs 8.61 trillion, employment generation has been over 6,78,000. PLI schemes have witnessed exports surpassing Rs 3.2 trillion.
Apart from large scale electronics manufacturing, other sectors like bulk drugs, IT hardware, medical devices, pharma, telecom and networking products, food processing and drones and drone components have been disbursed incentives.
Thakur said in large scale electronics manufacturing 5-year targets of investment and production under PLI have already been achieved while in pharma and food processing it is close to being achieved.
On the need for course correction in some of the PLI schemes, he said no ministry has asked for changes in the basic structure of the scheme but only in some processes. These changes can be done by the ministries themselves or at the level of the Empowered Group of Secretaries.
Large scale electronics manufacturing has seen investment of Rs 7400 crore under PLI, production of Rs 4.12 trillion, exports of Rs 1.8 trillion and employment of 72,000. Bulk drugs, medical devices and pharma has seen investment of Rs 30,400 crore, production of Rs 1.32 trillion and exports of Rs 75,000 crore. Telecom and networking products have seen investment of Rs 2800 crore, production of Rs 40,000 crore and exports of Rs 7,000 crore.
Manufacturing of various electronic components like battery, chargers, printed circuit board assembly, printed circuit board, camera modules, passive components and certain mechanics has been localised in the country. Due to the PLI scheme there has been significant reduction of imports of raw material in the pharma sector.
Unique intermediate materials and bulk drugs are being manufactured in India including Penicillin – G. Production of 39 medical devices has commenced such as CT Scan, MRI, Cath Lab, dialysis machine, heart valves and stents.