The government is considering the possibility of liberalising public procurement rules for new and innovative products produced under the Production Linked Incentive (PLI) scheme in order to attract more investments in the 14 identified sectors, Commerce & Industry Minister Piyush Goyal has said.

All quality approvals, from agencies such as BIS, FSSAI, CDSO and NABL, for items produced under the PLI scheme will also be henceforth fast-tracked, the Minister said on Sunday after consultations with PLI beneficiaries. “We (DPIIT) will be working with all line ministries to see how we can make sure that that whenever you (PLI beneficiaries) have to supply to government procurement, the prior experience conditions can be liberalised.... all your class 1, class 2 categorisation can be liberalised, to allow you through your journey to produce new and innovative products. We are working in that direction to give you greater market access in government procurement,” Goyal said. 

List of items

A list of items that could be covered under the liberalised government procurement rules will also be discussed with line ministries. The Minister said he was optimistic that the investment targets under the scheme would get surpassed. “We were expecting that this ecosystem will have an investment of ₹1,32,000 crore. But with today’s discussion, where many beneficiaries have talked about exceeding the investment commitments, my own expectation is that we will land up with investment upward of ₹2 lakh crore through the encouragement of this government,” he said.

Investments coming into the semiconductor sector industry, could itself be upward of ₹2 lakh crore, beyond the 14 sectors.

To exceed target

Jobs generated under PLI is also likely to exceed the target, Goyal added. “When we originally conceptualised PLI we were expecting about 8.5 lakh jobs will be created out of this investments. But listening to the stories that are coming across from various PMAs (Project Management Agencies), line ministries and my own detailed engagements with the industry, it looks like we could end up with direct employment exceeding 12 lakh people and indirectly possibly much more,” he said.

The PLI scheme was announced in 2021 for 13 sectors (later extended to one more) with an outlay of ₹1.97 lakh crore, to incentivise local production in strategic areas and encourage exports. The support under the scheme, based on minimum investments and turnover, is provided over a period of five years.

The 14 sectors include mobile manufacturing and specified electronic components; drug intermediaries & APIs; medical devices; automobiles & components; pharmaceuticals, specialty steel, telecom products; electronic/technology products; white goods, food products, textiles (MMF segment and technical textiles), high efficiency solar PV modules, ACC battery, and drones & components.

Goyal said that the timeline for certain sectors covered under the scheme could be extended based on the submissions made by the line ministries and the clearances received. So far, the scheme has proved to be successful in a handful of sectors, most significantly in mobile manufacturing, and to some extent in ones like electronics, food processing, drones and pharmaceuticals. 

Per latest estimates, the PLI scheme has attracted ₹1.5 lakh crore investments (total investment expectation is ₹3-4 lakh crore), led to production worth ₹8-9 lakh crore of which ₹3-3.5 lakh crore were exported, the official said. Total disbursement of incentives touched ₹10,000 crore, but were concentrated in certain sectors.