The Narendra Modi government on Wednesday approved offering Rs 2 lakh crore worth of production-linked incentives (PLI) scheme to 10 more sectors to boost domestic manufacturing.

Share Market Live

NSE

Confirming the CNBC-TV18 newsbreak, the information and broadcasting minister Prakash Javadekar said production-linked incentives will be offered for sectors such as white goods manufacturing, pharmaceutical, specialised steel, auto, telecom, textile, food products, solar photovoltic, and cell battery.

The scheme will help encourage domestic manufacturing, reduce imports, and generate employment as the government works to bolster economic growth. The financial outlay for the new scheme will be Rs 1,45,980 crore.

The five-year PLI scheme, which aims at making Indian manufacturers' competitive globally, was approved by the union cabinet, Javadekar told reporters.

Elaborating on the decision, finance minister Nirmala Sitharaman said the PLI scheme will provide great incentives for manufacturers and help the country move towards the objective of ''Aatmanirbhar Bharat'' (Self-Reliant India).

The Cabinet also decided to extend the viability gap funding scheme to the social infrastructure sectors. The scheme is currently available only for projects concerning economic infrastructure.

"The Cabinet has taken two very important decisions... both of which, if you ask me at a time like this, are going to give a right impetus to the economy, because we are looking at Aatmanirbharta," Sitharaman said, adding that they will help in making India part of the global value chain.

The PLI scheme, she said, will also provide encouragement to the critical sunrise sectors by ensuring necessary support from the government in addition to creating jobs and linking India to the global value chain.

The 10 sectors that will be entitled to get the incentives include Advance Chemistry Cell (ACC) battery. It is entitled to get Rs 18,100 crore. Other sectors are electronics and technology products (Rs 5,000 crore); automobiles and auto components (Rs 57,042 crore); pharmaceuticals and drugs (Rs 15,000 crore); telecom and networking products (Rs 12,195 crore); textiles products (Rs 10,683 crore); food products (Rs 10,900 crore); high efficiency solar PV modules (Rs 4,500 crore); white goods (Rs 6,238 crore) and speciality steel (Rs 6,322 crore).

"Over the next five years, this is today estimated, that the new PLIs that we are bringing in for these 10 identified sectors will involve an expenditure of about Rs 2 lakh crore. So this is something which we are very happy to announce that the Cabinet has given clearance for this...," Sitharaman said.

An official release said the approved financial outlay over the five-year period for these 10 sectors will be Rs 1,45,980 crore. Under another PLI scheme, an outlay of Rs 51,311 crore has already been approved.

"We are yet again proving that the policy that we are taking up even in PLI through which we want manufacturers to come to India is clearly to say we want to build on our strength but yet link with the global value chains.

"... so this PLI is also aimed at getting investments into the country. The government is giving financial support that these financial incentives will make it attractive to produce in India and selection of sectors have been based on that," Sitharaman said.

An official release said the scheme across these 10 sectors will make Indian manufacturers globally competitive, attract investment in the areas of core competency and cutting-edge technology, ensure efficiencies, create economies of scale, enhance exports and make India an integral part of the global supply chain.

The PLI scheme will be implemented by the concerned ministries/ departments. The final proposals of PLI for individual sectors will be appraised by the Expenditure Finance Committee (EFC) and approved by the Cabinet.

Savings, if any, from one PLI scheme of an approved sector can be utilised to fund that of another approved sector by the Empowered Group of Secretaries. Any new sector for PLI will require fresh approval of the Cabinet.

SIAM welcomes the announcement of PLI scheme. "We thank the Government of India for echoing its confidence in the Indian Automobile industry, as the industry was eagerly waiting for this scheme to increase its competitiveness and take the growth of the sector to the next level. We look forward to the details of the scheme that would be rolled out by the ministry of heavy industries & public enterprises.”

FICCI President Sangita Reddy said the announcement of the PLI scheme for 10 sectors by the government today is a major boost for the manufacturing sector.

The sectors covered under the PLI scheme are strategic, technology-intensive, and also important from the perspective of employment generation in the country, Reddy added.

"Indian economy offers huge opportunity for these sectors not just from the domestic market perspective but also to make India an export hub for these products. FICCI thanks the Government for the announcement and also hopes to hear about such progressive schemes for more sectors.”

Kamal Nandi, President – CEAMA and Business Head & Executive Vice President – Godrej Appliances said this is a welcome move by the Union Cabinet towards making India self-reliant.

The industry and economy as a whole is still recovering from the pandemic. The production linked incentives of Rs 1.46 lakh crore spread over 5 years will go a long way in boosting indigenous manufacturing in various sectors including consumer durables/white goods, he added.

(Edited by : Pranati Deva, Jomy)

First Published:Nov 11, 2020 1:38 PM IST