PLI scheme timely, transformational, says India Inc

Industry and experts on Wednesday hailed the government's decision to extend the production-linked incentive (PLI) scheme to 10 more key sectors as timely and transformational which will boost domestic manufacturing.

Industry and experts on Wednesday hailed the government's decision to extend the production-linked incentive (PLI) scheme to 10 more key sectors as timely and transformational which will boost domestic manufacturing. Earlier in the day, the Cabinet approved PLI for 10 more sectors, including auto and pharmaceuticals, with an outlay of about Rs 1,45,980 crore over a period of five years. Under another PLI scheme, an outlay of Rs 51,311 crore has already been approved. "The new PLI policy is transformational and timely and will facilitate India becoming a global manufacturing hub. The policy is strategically targeted and will go a long way to boost production, make Indian goods competitive and expand exports as part of global value chains," said Uday Kotak, President of industry body CII. Assocham Secretary General Deepak Sood said along with the PLI scheme already in operation, the total outlay approved for the flagship programme for making India 'aatmanirbhar' (self-reliant) in the global manufacturing value chain is nearly Rs 2 lakh crore. "This would have a huge multiplier effect on economic activities, with a sizable generation of employment across different sectors such as automobiles, electronics, textiles, food products, and telecom. In sectors like pharmaceuticals, chemicals, solar equipment, the PLI would also give a big leap towards scientific research and development," said Sood. Another leading industry chamber Ficci said extending the PLI scheme to more segments is a major boost for the manufacturing sector. "The sectors covered under the PLI scheme are strategic, technology intensive and also important from the perspective of employment generation in the country. "Indian economy offers huge opportunity for these sectors not just from the domestic market perspective but also to make India an export hub for these products...," Ficci President Sangita Reddy said. The 10 sectors which will be entitled to get the incentives include Advance Chemistry Cell (ACC) battery, which will be entitled to get Rs 18,100 crore. Other sectors are electronics and technology products (Rs 5,000 crore); automobiles and auto components (Rs 57,042 crore); pharmaceuticals and drugs (Rs 15,000 crore); telecom and networking products (Rs 12,195 crore); textiles products (Rs 10,683 crore); food products (Rs 10,900 crore);  high efficiency solar PV modules (Rs 4,500 crore); white goods (Rs 6,238 crore) and speciality steel (Rs 6,322 crore). Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said the scheme will give a big boost to exports, investments, domestic capacity and employment. "The fiscal stimulus of Rs 10,683 crore to the textile sector particularly the manmade fibre (MMF) segment and technical textiles will go a long way in encouraging apparel exporters to foray into MMF garments for which there is a huge demand globally but exports from India is currently low. The impact of this stimulus in generating job opportunities will be maximum in the labour intensive apparel sector," Sakthivel said. Arindam Guha, Partner, Leader - Government and Public Services, Deloitte India, said the PLI scheme is more effective from the government's standpoint than some of the other grant-based schemes like mega food parks which are more input oriented. "It is also targeted towards the larger anchor investors who are capable of mobilising the initial investment for brownfield or greenfield projects by themselves," Guha said. Arvind Sharma, Partner, Shardul Amarchand Mangaldas & Co opined the government was taking critical economic and fiscal measures to bring the economy back on its growth track.   "One of such measures is introducing and extending production linked incentive schemes in various sectors. The recently approved package will boost production, exports, forex earnings and employment," Sharma said. The government said the PLI scheme across these 10 key specific sectors will make Indian manufacturers globally competitive, attract investment in the areas of core competency and cutting-edge technology; ensure efficiencies; create economies of scale; enhance exports and make India an integral part of the global supply chain. Gaurav Dayal, Partner, Lakshmikumaran & Sridharan Attorneys, said it is expected that the PLI scheme will promote domestic manufacturing and exports in these sectors while also generating local employment and reducing imports. "This is likely to invite a share of global manufacturing to India with MNCs looking at having an India base to de-risk their supply chains, which were otherwise solely dependent on China," Dayal said. He further said given the push of the government towards increased adoption of electric vehicles and use of clean energy, inclusion of high efficiency solar PV modules and advanced battery cells in the PLI scheme is a welcome move and should provide these sectors with much needed investments. COAI Director General S P Kochhar said extension of PLI scheme to various sectors including telecom equipment reflects the government's commitment to 'Make In India' to foster inclusive growth in the industry by making it faster, easier and more competitive to conduct business. "This is considering that the Indian telecom industry has been extremely resilient during this ongoing pandemic and has been playing a pivotal role in the survival of several other sectors, especially during the lockdown," Kochhar said. The government has approved an outlay of Rs 12,195 crore for telecom and networking equipment segment.

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