Implementation of Rs 6,238-crore PLI scheme for white goods is well on track: Govt

Recently, Jain had said the government had scrapped the need for more than 22,000 compliances, decriminalised as many as 103 offences and removed 327 redundant provisions and laws in recent years to promote ease of doing business.

The implementation of the Rs 6,238-crore production-linked incentive (PLI) scheme for white goods is well on track, senior government officials said on Thursday, exuding confidence that large-scale investments would flow in as planned.

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The department for the promotion of industry and internal trade (DPIIT) has selected 42 companies — including Daikin, Hitachi, Panasonic, Voltas, Mettube, Nidec, Dixon and Havells — that have committed investments of Rs 4,614 crore for availing of subsidy.

DPIIT secretary Anurag Jain said the Centre has initiated a raft of measures, including the single-window clearance, to facilitate investments. The single-window system aims to become a “one-stop shop” for investors to apply for various approvals and make it easier for them to set up units. India Inc’s compliance burden, too, has been drastically cut down to bolster confidence.

Recently, Jain had said the government had scrapped the need for more than 22,000 compliances, decriminalised as many as 103 offences and removed 327 redundant provisions and laws in recent years to promote ease of doing business.

For the PLI scheme for white goods, as many as 52 companies applied, pledging to invest Rs 5,858 crore. While 42 have been selected, six of the applicants proposing foreign direct investment (FDI) from “countries sharing land border with India have been advised to submit approval for the FDI”, the DPIIT has said.

To curb opportunistic acquisition of domestic firms in the wake of the pandemic, New Delhi had last year stipulated that FDI from the nations (including China) that share land borders with India will have to obtain prior government nod, subject to certain riders. Four other applicants are being referred to a committee of experts for examination and its recommendations.

The scheme was notified on April 16 and its guidelines were published on June 4. Interested investors had time up to September 15 to apply for the scheme. The candidates were selected earlier this month.

TIt will be implemented over a seven-year period, from FY22 to FY29 and has a total outlay of Rs 6,238 crore. The government expects the scheme to lead to incremental production to exceed Rs 81,254 crore and create direct employment opportunities for 44,000 people.

Of the selected candidates, 26 companies have pledged investments of Rs 3,898 crore in component manufacturing for air-conditioners, while 16 will invest Rs 716 crore in making LED parts.

Some of the other investors are Amber Enterprises, Hindalco, Mettube India, Blue Star, Lucas-TVS, Sun Home Appliances and Haier Appliances (India).
Under the scheme, eligible investors in air-conditioners, LED lights and such components will get incentives of 4-6% on incremental sales (to be calculated over the base year of 2019-20) of products manufactured in India. The total incentives of Rs 6,238 crore will be disbursed over five years.

This is part of the 13 PLI schemes, announced by the government in the wake of the Covid-19 pandemic last year, to lure mainly large corporations to expand manufacturing, bolster supply chains and boost exports. The total incentives under the PLI schemes, covering sectors including telecom, electronics, auto part, pharma, chemical cells and textiles, were initially estimated at Rs 1.97 lakh crore over a five-year period. The schemes, put together, are expected to catalyse incremental manufacturing of as much as $520 billion over five years.

The incentives will flow in from the next fiscal at 6% (if the investments start from FY22) and will be reduced to 5% by FY25 and then to 4% in FY27.