- Mere assembly of finished goods will not be incentivized
- Companies investing in basic/core components shall have a higher priority
- Within target segments, ‘Large Investment’ shall have a higher priority over ‘Normal Investment’
The Department for Promotion of Industry and Internal Trade (DPIIT) has notified the Production Linked Incentive (PLI) scheme for white goods (AC and LED lights), making the scheme operational for manufacturers to apply.
Mere assembly of finished goods will not be incentivized, DPIIT said in an official statement. The statement further added that companies investing in basic/core components shall have a higher priority.
Segments earmarked for this scheme include manufacturers which invest large or normal amounts in AC components of ‘High-value Intermediates’ like Copper Tubes, Aluminium Foil and Compressors, or ‘Low-Value Intermediates’ like PCB assembly for controllers, BLDC motors etc, or sub-assemblies thereof.
For LED Lights, investments in core components like LED Chips, LED Drivers, LED Engines, Mechanicals, Packaging, Modules, Wire Wound Inductors and other components, will be incentivized.
Within these target segments, ‘Large Investment’ shall have a higher priority over ‘Normal Investment’.
Under the scheme, an incentive of 4 per cent to 6 per cent on incremental sales over the base year of products manufactured in India will be provided to eligible companies for a period of five years subsequent to the base year and one year of gestation period.
“The applicant will have to fulfil both criteria of cumulative incremental investment in plant and machinery as well as incremental sales over the base year in that respective year to be eligible for PLI. The first year of investment will be FY 2021-22 and the first year of incremental sale will be FY 2022-23. Actual disbursement of PLI for a respective year will be subsequent to that year,” stated DPIIT.
Companies will be selected so as to incentivize manufacturing of components or sub-assemblies which are not manufactured in India presently with sufficient capacity.
The statement also added that an Empowered Group of Secretaries (EGoS) chaired by the Cabinet Secretary will monitor the PLI scheme, undertake periodic review of the outgo under the scheme, ensure uniformity of all PLIs and take appropriate action to ensure that the expenditure is within the prescribed outlay.
The PLI Scheme for White Goods has a budgetary outlay of Rs 6,238. Incentive under the Scheme shall be provided to companies making brownfield or greenfield Investments for manufacturing in target segments in India The scheme aims to boost domestic manufacturing and attract large investments in the White Goods manufacturing value chain.
DPIIT also informed that the Scheme shall be open for applications for a period of 6 months initially which may be extended.