Productivity is the operative word for leap in New India’s growth story. Lagging productivity is one obvious domain but adaptability is the biggest strength which can be utilised. Taking these two key parameters as target, Product Linked Incentive (PLI) schemes have worked well in the country.
PLI schemes are aimed at enhancing competitiveness and leveraging the untapped potential of Indian industries to fulfill the vision of an Atmanirbhar Bharat. Reopening the application window for Production Linked Incentive (PLI) scheme for White Goods has put the spotlight back on this very significant economic reform of the Government of India. The scheme has enormous potential to transform the manufacturing sector by encouraging domestic and local productions further boosting economic growth and amplifying exports. Keeping in view this vision, Finance Minister Nirmala Sitharaman announced an additional allocation of Rs 19,500 crore under the PLI scheme for manufacturing high-efficiency solar modules in her Union Budget 2022-23, besides committing financial support to farmers to take up agro-forestry.
Coming back to the recent initiative of the central government, in pursuance of the Prime Minister’s clarion call for ‘Atmanirbhar Bharat’ to bring manufacturing to the center stage and emphasize its significance in driving India’s growth and creating jobs, the PLI Scheme for White Goods for manufacturing of components and sub-assemblies of Air Conditioners (ACs) and LED Lights, which was approved by the Union Cabinet in April last year with an outlay of Rs 6,238 crore, was notified by the Department for Promotion of Industry and Internal Trade (DPIIT) on 16 April 2021. Now, applicants were given the flexibility to choose the gestation period either up to March 2022 or up to March 2023.
The Central government also wants the states to take advantage of the PLI scheme, thanks to their relatively low labour costs and huge demographic dividend. Since all states can’t be good in all sectors, hence niche and specific areas are being suggested to excel by taking comparative cost advantage in key areas. Government support is also helping and inspiring AC manufacturers to switch over to CFL-free cooling technology, shifting to clean energy in the automobiles sector and indigenous production of magnets and electric motors.
The PLI schemes, presently in place for 14 sectors, are being implemented by the concerned ministries and departments. The PLI schemes for various sectors are helping a lot in the post-Covid industrial and economic recovery. There appears to be positive industry feedback about these schemes as textile, automotive and white goods have started giving a good sign of growth.
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