Govt pays PLI incentives worth Rs 2,874 crore towards 8 sectors in FY23
Claims under the production-linked incentive (PLI) scheme stood at Rs 3,420 crore in 2022-23 (FY23), of which the government paid incentives of Rs 2,874 crore to PLI beneficiaries until March across eight sectors — mobile manufacturing, information technology hardware, pharmaceutical (pharma), bulk drug, medical device, telecommunications (telecom), food processing, and drone.
This translates into 1.4 per cent of the Rs 1.97 trillion that has been allocated for five years towards the scheme. The incentive payout is set to peak over the next two to three years, which will be crucial, Additional Secretary in the Department for Promotion of Industry and Internal Trade Rajeev Singh Thakur said on Wednesday.
Thakur said that pending claims of Rs 574 crore are yet to be disbursed and claims are at different stages of approval.
Depending on the departments and the nature of the scheme, it takes one to two months to get a company’s incentive claims approved.
The government had rolled out three PLI schemes in 2020-21 (FY21) and 11 more for the sunrise sector, such as drone, specialty steel, textile, and food processing, among others, in 2021-22 (FY22), with an overall allocation of Rs 1.97 trillion for five years. The first set of incentive disbursements started in FY23.
“The idea was to give manufacturing (through this scheme) a boost and make the (local) industry more competitive. The idea was also to get cutting-edge technology (tech) and enable the transfer of tech, which is happening in pharma. It is giving Make in India a leg-up. Big companies have started shifting base to India… The schemes will go on until 2028-29. Not all schemes are moving at a similar pace. Some schemes are performing better than others,” said Thakur.
PLI schemes for sectors, such as mobile manufacturing, pharma, bulk drug, medical device, food processing, telecom, and white goods, have been doing well. The laggards, compared to sectors like textile, steel, solar photovoltaic module, battery, and automotive, are due to multiple factors, including geopolitical tensions, that may have affected investment, he said.
“However, none of the sectors/schemes has been derailed,” he said.
The empowered group of secretaries (EGoS) chaired by the Cabinet secretary and think tank NITI Aayog meet regularly to review the scheme and take views of ministries and relevant stakeholders.
“We are trying to address the issues in sectors that are not doing well so that we can help them out with the Aayog and EGoS, and take them to a level that is acceptable to the industry and have procedural lapses removed,” he said.
As of date, 717 applications have been approved in 14 sectors with an expected investment of Rs 2.74 trillion. The actual investment of Rs 53,500 crore has been realised (until December 2022), which has resulted in incremental production/sales of over Rs 5 trillion and employment generation of more than 300,000.
With the announcement of PLI schemes, significant creation of production, employment, economic growth, and exports is visible in the country.
Due to PLI in the manufacturing sector, there was a significant increase of 76 per cent in foreign direct investment in FY22 at $21.34 billion, compared with $12.09 billion in FY21, an official statement said.
The PLI for 14 sectors has attracted top-draw global players, while leading domestic companies and micro, small and medium enterprises have actively participated in these schemes, the statement said.
Thakur also said that no decision has been taken regarding the rolling out of more PLI schemes.
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