Ease of Doing Business for MSMEs: PLI scheme offers incentives to companies for enhancing their domestic manufacturing apart from focusing on reducing import bills and improving the cost competitiveness of local goods.
Ease of Doing Business for MSMEs: Covid-hit MSME sector might remain bereft of a dedicated Production-Linked Incentive (PLI) scheme as the government is not considering the same, at least for now. Even as multiple industry and trade associations or bodies have been pitching for a dedicated PLI scheme for MSMEs, “So far as NITI Aayog is concerned, as of now, there is no proposal under active consideration for dedicated PLI scheme for MSME sector,” MSME Minister Narayan Rane said. Finance Minister Nirmala Sitharaman in her union budget 2021-22 speech had announced an outlay of Rs 1.97 lakh crore for PLI schemes for 13 sectors to boost manufacturing and generate employment opportunities. This meant that minimum production in India as a result of the PLI scheme was expected to be over $500 billion in five years.
Rane, who was responding to a question in the Rajya Sabha on Monday, was also asked whether NITI Aayog was considering to divide PLI scheme into two parts – a larger scheme for big companies with higher targets and another for smaller ones and also whether the NITI Aayog had recommended extending it (scheme) across sectors to medium-sized industries for self-reliance and increasing domestic manufacturing. Earlier, apart IIA, industry bodies including Electronic Industries Association of India, Engineering Export Promotion Council, and others had also urged the government for a PLI scheme particularly for MSMEs. Earlier this year, a media report had claimed that NITI Aayog was working on a dedicated PLI scheme for MSMEs.
“We had also requested for MSME-dedicated PLI as MSME sector is spread across all industries. The scheme could have benefited with much more production and new jobs in MSMEs along with enhanced exports as the sector has been looking to recover despite limited resources. If the dedicated PLI scheme is not launched ahead, then there would be huge discouragement among MSMEs. If only a few sectors would be supported under PLI, the government’s vision of self-reliance would be difficult to be realised,” Pankaj Kumar, President, Indian Industries Association (IIA) told Financial Express Online.
The nine sectors for which the scheme was already approved included electronic or technology products (Rs 5,000 crore outlay for 5 years), pharmaceuticals drugs (Rs 15,000 crore), telecom & networking products (Rs 12,195 crore), food Products (Rs 10,900 crore), high-efficiency solar PV modules (Rs 4,500 crore), etc. The other four sectors under PLI awaiting Cabinet approval were automobiles & auto components, advanced chemistry cell (ACC) battery, textiles, and specialty steel.
PLI scheme offers incentives to companies for enhancing their domestic manufacturing apart from focusing on reducing import bills and improving the cost competitiveness of local goods. PLI scheme offers incentives on incremental sales for products manufactured in India. The first three PLI schemes were approved in March last year followed by 10 new schemes which were notified in November of which six were approved later. The scheme for respective sectors has to be implemented by the concerned ministries and departments.