Rs 6,238-crore PLI scheme for white goods is on track to be implemented Says Govt

Senior government officials said on Thursday that the Rs 6,238-crore production-linked incentive (PLI) scheme for white goods is on track, expressing confidence that large-scale investments will flow in as envisaged.

The department for the development of industry and internal trade (DPIIT) has chosen 42 businesses, including Daikin, Hitachi, Panasonic, Voltas, Mettube, Nidec, Dixon, and Havells, to receive subsidies worth Rs 4,614 crore.

Anurag Jain, DPIIT secretary, said the Centre has taken a number of steps to help investors, including a single-window clearance system. The single-window system intends to be a “one-stop shop” for investors to apply for numerous permissions and make unit setup easier. To boost confidence, India Inc’s regulatory burden has been significantly reduced.

To encourage ease of doing business, Jain recently stated that the government had eliminated the requirement for more than 22,000 compliances, decriminalised 103 offences, and abolished 327 duplicate rules and regulations in recent years.

A total of 52 enterprises filed for the PLI plan for white goods, pledging to invest Rs 5,858 crore. While 42 candidates were chosen, the DPIIT encouraged six of the applicants proposing foreign direct investment (FDI) from “countries sharing land border with India” to apply authorisation for the FDI.

o Prevent opportunistic domestic corporate acquisitions Following the outbreak, New Delhi mandated this year that FDI from countries sharing land borders with India (including China) would require prior government approval, subject to specific conditions. Four other applications have been submitted to an expert committee for review and recommendations.

On April 16, the scheme was announced, and on June 4, the guidelines were released. Interested investors have until September 15 to submit an application for the plan. Earlier this month, the candidates were chosen.

It would be implemented over seven years, from FY22 to FY29, and will cost Rs 6,238 crore in total. The government anticipates that the scheme will result in incremental production of Rs 81,254 crore and direct employment for 44,000 persons.

26 of the shortlisted bidders have committed to invest Rs 3,898 crore in air-conditioning component manufacturing, while 16 have committed to invest Rs 716 crore in LED component production.

Amber Enterprises, Hindalco, Mettube India, Blue Star, Lucas-TVS, Sun Home Appliances, and Haier Appliances are among the other investors (India).
Eligible investors in air conditioners, LED lighting, and other components will get a 4-6 percent incentive on increased sales of products manufactured in India (to be determined over the base year of 2019-20). The Rs 6,238 crore in incentives would be distributed over five years.

This is one of 13 PLI programmes introduced by the government last year in the aftermath of the Covid-19 outbreak to entice primarily large firms to expand manufacturing, strengthen supply networks, and increase exports. Over a five-year period, the overall incentives under the PLI programmes, which span sectors such as telecom, electronics, auto parts, medicine, chemical cells, and textiles, were initially anticipated to be Rs 1.97 lakh crore. Over the next five years, the plans are estimated to catalyse $520 billion in additional manufacturing.

The incentives will begin to flow in the following fiscal year at a rate of 6% (assuming investments begin in FY22), then drop to 5% in FY25, then to 4% in FY27.