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4 lakh jobs, Rs 7,920 crore investment: The perks of PLI for white goods

Nidhi Singal     April 7, 2021

The cabinet today approved the production linked incentive scheme (PLI) for white goods including air conditioners and LED lights with a budgetary outlay of Rs 6,238 crore. This PLI scheme for white goods will 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 Air Conditioners and LED Lights.

The PLI Scheme is estimated to lead to an incremental investment of Rs 7,920 crore, incremental production worth Rs 1,68,000 crore, exports worth Rs 64,400 crore, earn direct and indirect revenues of Rs 49,300 crore and create additional four lakh direct and indirect employment opportunities.

"The announcement today on PLI scheme for ACs is encouraging. I have always maintained that one of the key pillars to drive up manufacturing and exports is backward integration. As component manufacturing is a key beneficiary of the new policy, indigenous AC manufacturing will get a fillip. This will also enable design led manufacturing, fuel innovation and drive component exports along with finished ACs from India. In foreseeable future, I see a lot of exciting developments in component design capability and growth of the MSMEs and SMEs," says Manish Sharma, President & CEO, Panasonic India & SA, Chair FICCI Electronics & Manufacturing Committee.

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.

According to the press statement issued by cabinet, 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 incentivise manufacturing of components or sub-assemblies which are not manufactured in India presently with sufficient capacity. Mere assembly of finished goods shall not be incentivised.

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. Also, an entity availing benefits under any other PLI scheme will not be eligible under this scheme for the same products but the entity may take benefits under other applicable schemes of government of India or schemes of state governments.

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