Only eligible applicants can apply to avail the benefits of the scheme and the guidelines lay out the investment criteria for determining eligibility.
Investments made in land and building required for a project will not be covered under the production linked incentive (PLI) scheme for ACs and LED lights and these would not be considered for determining eligibility of a company to avail benefits of the programme.
This is part of the guidelines issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on Friday for the PLI scheme for promoting domestic manufacturing of white goods (only air conditioners and LED lights).
Only eligible applicants can apply to avail the benefits of the scheme and the guidelines lay out the investment criteria for determining eligibility. It said eligibility will be subject to achievement of thresholds of net incremental sales of the products for the respective financial year over the base year (2019-20) and cumulative incremental investment in the preceding fiscal.
“Investment in land and building (including factory building or construction) required for the project or unit will not be covered under the scheme and therefore shall not be considered for determining eligibility under the scheme,” according to the guidelines. Expenditure on consumables and raw material used for manufacturing shall not be considered as investment.
“No second hand/used refurbished plant, machinery equipment, utilities shall be used to manufacture the eligible product,” the guidelines said. In case an applicant does not meet criteria of threshold investment and threshold net incremental sales for any given year, it would not be eligible for disbursement of incentive for that particular fiscal.
Investment will include expenditure incurred on new plant, machinery, equipment and associated utilities, research and development (R&D), and transfer of technology relating to the facilities setup for the products. Investment in R&D should not exceed 15 per cent of the total committed investment, the guidelines added.
The application window for the scheme will be open from June 15 to September 15 this year and no applications will be accepted after that. The guidelines also said an applicant will have to submit a claim for disbursement of incentive on an annual basis for the sales made in a financial year along with audited financial statements.
The scheme will be implemented through a project management agency (PMA) which will be responsible for providing secretarial,managerial and implementation support. The agency would monitor the progress of the project made by the selected applicant as and when required with respect to the committed investment and may carry out physical inspections of an applicant’s manufacturing units and offices. In the application form, an applicant would have to provide information such as shareholding pattern, committed cumulative investment, details of board of directors and key management personnel, promoter, and annual plan for domestic value addition, and details of each group company.
The government had approved a PLI scheme for white goods — air conditioners (ACs) and LED Lights — with a budgetary outlay of Rs 6,238 crore. It will be implemented from 2021-22 to 2028-29. The scheme proposes financial incentives to boost domestic manufacturing and attract large investments in the white goods manufacturing value chain.
Anand Ramanathan, Partner, Deloitte India, said the PLI scheme announced for promoting domestic manufacturing of white goods will help drive greater levels of investments and localisation of manufacturing. “The initiative will also help mature the supply chain eco-system and improve the attractiveness of India from an exports standpoint,” he added.