Status check of PLI schemes that aim to make India world's factory

Following the success, the government announced a PLI scheme for 10 additional selected sectors
The government has introduced a sector-specific Production Linked Incentive (PLI) scheme with the objective of import substitution, providing level playing field and incentivising domestic manufacturers. Last year, the government introduced a PLI scheme for mobile phones, electronic components, critical pharma drugs and medical devices, which saw huge traction among global as well as Indian manufacturers. Following the success, the government announced a PLI scheme for 10 additional selected sectors.  

Schemes announced to date

Large-scale Electronics Manufacturers 

(Mobile phone & specified electronic component) 

Products Covered: Phones & electronics parts

Budgetary Outlay: Rs 40,951 cr

Objective

  • Production of over Rs 10.5 trn, of which around 60% expected to be exported
  • Firms to bring additional investment of Rs 11,000 crore and generate more than 200,000 direct employment opportunities over 5 years along with extra indirect jobs of nearly 3 times the direct employment
  • Domestic value addition expected to grow from 15-20% to 35-40% in mobile phones and 45-50% for electronics parts

Tenure: 5 years

Incentive Rates : 6-4%

Investment Threshold

For mobile phones: 

  • Domestic firms - Rs 200 cr over 4 years 
  • Foreign firms - Rs 1,000 cr over 4 years
For electronics parts: Rs 100 cr over 4 years

Status: Applicants approved for phones. A few players approved for specified  parts

NO. of Beneficiaries: 

Mobile phones – 10

Electronic components – 6

Scheme Metrics: The incentive per company will be applicable on incremental sales of manufactured goods subject to thresholds

Gestation Period: NA

Special Category for MSMEs : NA

Localisation Criterion : NA

Base Year: FY20

Whether Land & Building included : NA

Specified Electronics Component Manufacturers Round 2

Products Covered: Specified electronics parts

Outlay: Rs 2,100 cr 

Objective

  • Same as the scheme for mobile phones & specified electronic components

Tenure: 4 years

Incentive Rates : 5-3%

Investment Threshold : Rs 25 cr over 4 years

Status: Second round open till March 31 this year

No. of Beneficiaries: Open to 30 applicants

Metrics: Incentive applicable on incremental sales of manufactured goods subject to thresholds

Gestation Period: NA

Special Category for MSMEs : NA

Localisation Criterion : NA

Base Year

For baseline revenue - FY20

For investment - FY21 

Whether Land & Building included : NA

IT Hardware Products

Products Covered: Laptops, tablets, servers, all-in-one PCs

 
Outlay: Rs 7,325 crore 

Objective

  • Employment generation potential of over 180,000 (direct and indirect) over 4 years
  • Expected to increase domestic value addition from 20% to 25% by 2025

Tenure: 4 years

Incentive Rates:  4-2/1%

Investment Threshold

Foreign firms - Rs 500 cr over 4 years

Domestic firms -  Rs 20 cr over 4 years

Status: Open for applications till March 31

No. of Beneficiaries:  Scheme open to 15 applicants (10 domestic & 5 foreign firms)

Metrics: Sops applicable on incremental sales of manufactured goods subject to thresholds

Gestation Period: NA

Special Category for MSMEs : NA

Localisation Criterion : Yes

Base Year

For baseline revenue - FY20

For investment - FY21  

Whether Land & Building included : NA

Telecom & Networking Products

Products Covered: Specified telecom and networking products

Outlay: Rs 12,195 cr 

Objective

  • Incremental production of Rs 2.4 trn with exports of Rs 2 trn over 5 years 
  • Expected to bring investment of over Rs 3,000 crore and generate huge direct and indirect employment opportunities

Tenure: 5 years

Incentive Rates :  

MSME: 7-4%

Non MSME: 6-4%

Investment Threshold

MSME: Minimum Rs 10 cr over 4 years

Non-MSME: Minimum Rs 100 cr over 4 years

Status: Scheme notified. Guidelines awaited

No. of Beneficiaries: Guidelines awaited

Metrics: Incentive will be applicable on incremental sales of manufactured goods subject to thresholds. Also, applicants to achieve localisation criteria

Gestation Period: NA

Special Category for MSMEs : Yes

Localisation Criterion : Guidelines awaited

Base Year: FY20  

Whether Land & Building included : NA

Medical Devices

Products Covered: Specified medical devices

Outlay: Rs 3,420 cr 

Objective

Tenure: 5 years

Incentive Rate:  5%

Investment Threshold

NA (initially Rs 180 cr over 3 years was proposed, subsequently completely relaxed)

Status: 9 approvals provided. Remaining under review

No. of Beneficiaries: 28 applications to be approved

Metrics: The incentive per company will be applicable on incremental sales of manufactured goods subject to thresholds

Gestation Period: NA

Special Category for MSMEs: NA

Localisation Criterion: NA

Base Year: FY20  

Whether Land & Building included: NA

Pharmaceutical Drugs

Products Covered: Specified key starter molecules, drug intermediates, active pharmaceutical ingredients

Outlay: Rs 6,940 cr 

Objective

Tenure: 6 years

Incentive Rates:  20-5%

Investment Threshold:  NA (initially Rs 20-400 cr depending on segments was proposed, subsequently relaxed)

Status: 33 approvals provided. Rest under review

No. of Beneficiaries:  136 applicants to be approved

Metrics: Incentive will be applicable on incremental sales of manufactured goods subject to thresholds

Gestation Period: 1 year allowed (FY22)

Special Category for MSMEs: NA

Localisation Criterion: NA

Base Year: FY20  

Whether Land & Building included: Expenditure for land is not allowed; production building is considered

Pharmaceutical Drugs 2.0

Products Covered:  Specified biopharmaceuticals, complex generic drugs, patented drugs, key starter molecules, drug intermediates, active pharma ingredients

Outlay: Rs 15,000 cr 

Objective

Tenure: 6 years

Incentive Rates:  5-10% depending on the product manufactured

Investment Threshold:  Guidelines awaited

Status: Guidelines awaited

NO. of Beneficiaries: Guidelines awaited

Metrics: Incentive will be applicable on incremental sales of manufactured goods subject to thresholds

Gestation Period: 1 year allowed (FY22) 

Special Category for MSMEs: Yes

Localisation Criterion: Guidelines awaited 

Base Year: Guidelines awaited  

Whether Land & Building included: Guidelines awaited

/>


Read our full coverage on PLI scheme

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel
Read More on

PLI SCHEME

MANUFACTURING

EMPLOYMENT

MAKE IN INDIA

DOMESTIC INDUSTRY

INDIAN COMPANIES

MOBILE MANUFACTURING INDUSTRY IN INDIA

ELECTRONICS INDUSTRY

MOBILE MANUFACTURING

PHARMA COMPANIES

DRUGS

MEDICAL DEVICES

INDIAN ECONOMY

ECONOMY & POLICY

NEWS


Related News

Most Read

Markets

[ more ]

Companies

[ more ]

Opinion

[ more ]

Latest News

[ more ]

Todays Paper

[ more ]

News you can use

[ more ]