The government is actively considering expansion of the Production Linked Incentive (PLI) scheme for textiles, pharmaceuticals and solar PV (photovoltaic) sectors by including more products that would be eligible for sops and extension of the scheme period by one year for all three sectors, sources have said.
“The Cabinet notes proposing the expansion of lists for PLI schemes for textiles, pharmaceuticals and solar PV and extending the scheme period by a year has already been sent to the PMO and the Cabinet Secretariat. Once it gets a nod at the highest level, the Cabinet notes will be put before the Cabinet for approval,” an official tracking the matter told businessline.
The idea behind the expansion of the PLI scheme to more products under the identified sectors is to ensure higher investments, production and optimum utilisation of the scheme outlay.
Uneven progress
The PLI scheme, announced with an outlay of ₹1.97 lakh crore in 2021 to promote domestic manufacturing and attract investments in strategic sectors, has not moved at an even pace for all 14 sectors covered under it.
While the scheme has worked best for the mobile manufacturing sector and is showing promise for sectors such as electronics, telecom and food processing, for some others, including textiles and solar PVs, things are slower.
Since its launch, the PLI scheme has attracted investments of ₹1.5 lakh crore, resulting in the production of goods worth about ₹10 lakh crore and the disbursement of incentives worth ₹10,000 crore.
“Overall, if you go by total disbursement of incentives, things are going slow. But the investments already committed under the scheme and the production taking place is promising. The expansion of existing schemes, wherever needed, will ensure more investments, production and exports,” the source said.
Textiles sector
In the textiles sector, while the original scheme announced with an outlay of ₹10,683 crore, is restricted to MMF (man-made fibre) apparel, MMF fabrics and products of technical textiles, the proposal is now to extend it to garments made of all materials including cotton.
“It is being hoped that once the PLI scheme is extended to cotton garments, it will attract a lot more domestic investors in addition to foreign investors,” the source said.
Similarly, in pharmaceuticals and solar PVs, more items have been proposed by the respective Ministries for better utilisation of the outlay.
“While the period of implementation of the scheme and claiming of incentives, based on incremental turnover and investments, is five years, the proposal being considered is to extend it by one year for all three identified sectors. If more products are added, it is logical that more implementation time would be needed,” the source said.
Other sectors included under PLI are medical devices, automobiles & components, speciality steel, white goods, ACC batteries, and drones & components.