The government is likely to assess the need for course correction for “laggard sectors’’ under the ₹1.97-lakh crore Production Linked Incentive (PLI) scheme, such as white goods, automobiles, auto parts, textiles, solar PV modules, and ACC batteries, after the end of the current financial year, official sources have said.

“Six of the fourteen sectors covered by the PLI scheme are not doing well. In some cases, gestational periods are long, and some may be facing teething trouble, but this is a crucial year. If they don’t take off this year, we don’t have so much time left, and the government may have to do a course correction to deal with it,” an official tracking the matter told businessline.

Course correction

The Departments and Ministries concerned, where the PLI scheme is not picking up, may consider some course correction in the plan or look at certain relaxations like the Ministry of Electronics and Information Technology (MeitY), which recently came up with a second version of the PLI scheme for the IT hardware sector with relaxed performance thresholds, DPIIT Secretary Rajesh Kumar Singh pointed out at a press conference on Tuesday.

Responding to a question on the Textile Ministry’s proposal for a second edition of PLI for the textiles sector, Singh said that he was aware that some changes were in the offing but did not have the details.

Also read
Of the $101-billion total electronics production in 2022-23, smartphones constitute $44 billion including $11.1 billion as exports.

PLI scheme resulted in 20% value addition in mobile production in 3 years: DPIIT

Under the PLI scheme, which was announced in 2020 to attract investments in 14 sunrise and strategic sectors over a five-year period to boost manufacturing and exports, a total of ₹2,900 crore has been disbursed so far out of the corpus of ₹1.97-lakh crore. The total claims made so far amount to ₹3,400 crore.

The PLI scheme, however, will be a self-financing one, and the exchequer will get back more in terms of GST and other taxes than what is being spent as PLI outlay, Singh said.

The sectors that are doing well include large scale electronics including mobile phones, pharmaceuticals and food processing, Singh pointed out. 

Laggard sectors

Sectors such as bulk drugs, medical devices, IT and hardware, drones, and technology products have seen some disbursements, although very little, while white goods, automobiles, auto parts, textiles, solar PV modules, and ACC batteries are the laggards.

“In eight sectors, we are disbursing the incentives, and in the remaining six, we are hopeful it will start. We are confident that it will get a good response,” Rajeev Singh Thakur, Additional Secretary, DPIIT, said.

“Projects are on the ground, and investments and employment are happening. The disbursement will follow. But yes, there is a lag,” the Secretary added.

In a stock-taking meeting organised by the DPIIT later this month under Commerce and Industry Minister Piyush Goyal, different stakeholders of PLI will be called and asked how things are faring. “Representatives from various ministries, private companies, Niti Aayog, and officials who assess the applications will all attend,” the official said.