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Source: IBEF

“The Union Cabinet, chaired by the Prime Minister, Mr. Narendra Modi, approved the Production Linked Incentive (PLI) Scheme for White Goods (Air Conditioners and LED Lights) with a budgetary outlay of Rs. 6,238 crore (US$ 848.96 million). The Union Cabinet also approved the Ministry of New & Renewable Energy’s proposal for implementation of the Production Linked Incentive (PLI) Scheme ‘National Programme on High Efficiency Solar PV (Photo Voltic) Modules’ for achieving manufacturing capacity of Giga Watt (GW) scale in high efficiency solar PV modules with an outlay of Rs. 4,500 crore (US$ 612.43 million).

Production Linked Incentive (PLI) Scheme for White Goods (Air Conditioners and LED Lights)

The prime objective of the PLI scheme is to make manufacturing in India globally competitive by removing sectoral disabilities, creating economies of scale and ensuring efficiencies. It is designed to create complete component ecosystem in India and make India an integral part of the global supply chains. The scheme is expected to attract global investments, generate large scale employment opportunities and enhance exports substantially.

 

The PLI Scheme for White Goods shall extend an incentive of 4% to 6% on incremental sales of goods manufactured in India for a period of five years to companies engaged in manufacturing of Air Conditioners and LED Lights. Different segments have been earmarked for different types of components separately to specifically target global investments into desired areas. Selection of companies for the Scheme shall be done so as to incentivize manufacturing of components or sub-assemblies which are not manufactured in India presently with sufficient capacity. Mere assembly of finished goods shall not be incentivized.

Companies meeting the pre-qualification criteria for different target segments will be eligible to participate in the Scheme. Incentives shall be open to companies making brown field or green field Investments. Thresholds of cumulative incremental investment and incremental sales of manufactured goods over the base year would have to be met for claiming incentives.

An entity availing benefits under any other PLI Scheme of Govt. India will not be eligible under this scheme for the same products but the entity may take benefits under other applicable schemes of Govt. of India or schemes of State governments. The Scheme will be implemented as a pan India scheme and is not specific to any location, area or segment of population. A number of global and domestic companies, including a number of MSMEs are likely to benefit from the Scheme.

The Scheme is expected to be instrumental in achieving growth rates that are much higher than existing ones for AC and LED industries, develop complete component eco-systems in India and create global champions manufacturing in India. They will have to meet the compulsory BIS and BEE Quality standards for sales into domestic market and applicable standards for global markets. It will also lead to investments in innovation and research and development and upgradation of technology.

It is estimated that over the period of five years, the PLI Scheme will lead to incremental investment of Rs. 7,920 crore (US$ 1.08 billion), incremental Production worth Rs. 1,68,000 crore (US$ 22.86 billion), exports worth Rs. 64,400 crore (US$ 8.76 billion) earn direct and indirect revenues of Rs. 49,300 crore (US$ 6.71 billion) and create additional four lakh direct and indirect employment opportunities.

Production Linked Incentive scheme ‘National Programme on High-Efficiency Solar PV Modules’

Solar capacity addition presently depends largely upon imported solar PV cells and modules as the domestic manufacturing industry has limited operational capacities of solar PV cells and modules. The National Programme on High Efficiency Solar PV Modules will reduce import dependence in a strategic sector like electricity. It will also support the Atmanirbhar Bharat initiative.

Solar PV manufacturers will be selected through a transparent competitive bidding process. PLI will be disbursed for 5 years post commissioning of solar PV manufacturing plants, on sales of high-efficiency solar PV modules. Manufacturers will be rewarded for higher efficiencies of solar PV modules and also for sourcing their material from the domestic market. Thus, the PLI amount will increase with increased module efficiency and increased local value addition.

The outcomes/ benefits expected from the scheme are as follows:

Additional 10,000 MW capacity of integrated solar PV manufacturing plants,
Direct investment of around Rs. 17,200 crore (US$ 2.34 billion) in solar PV manufacturing projects
Demand of Rs. 17,500 crore (US$ 2.38 billion) over 5 years for ‘Balance of Materials’,
Direct employment of about 30,000 and Indirect employment of about1,20,000 persons,
Import substitution of around Rs. 17,500 crore (US$ 2.38 billion) every year, and
Impetus to Research & Development to achieve higher efficiency in solar PV modules.”