Interim Budget 2024: PLI allocation kept at Rs 6,200 crore for FY25; check details here

Anticipating that the production-linked incentive scheme may take off further in the new fiscal, the Interim Budget 2024-25 has increased allocations by a third under the scheme.  

PLI schemes for toys and leather and footwear have also been given allocations of Rs 3,489 crore and Rs 2,600 crore 

To this effect, the Interim Budget 2024-25 has pegged disbursements from PLI at Rs 6,200 crore next fiscal from an estimated Rs 4,645 crore this fiscal. The government had originally expected PLI disbursements of Rs 11,000 crore this fiscal.

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“This indicates an uptick in targets achieved by PLI beneficiaries, based on Quarterly Review Reports (QRRs) submitted by said beneficiaries.  The increase in allocation would impact disbursements under ongoing PLI Schemes – currently operational in 14 sectors,” said Anjali Malhotra, Partner- Regulatory, Nangia Andersen India.

The scheme had registered investments of over Rs 1.03 lakh crore till November 2023 and disbursed Rs 4,415 crore of incentives till date, according to a recent review by the ministry of commerce and industry.

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Out of the 14 PLI schemes, three to four relating to sectors such as large-scale electronics manufacturing, food processing, and telecom and networking products have seen good response have seen good response. However, three to four schemes are yet to start disbursal and are in the gestation period and are expected to start disbursals from the next fiscal 2024-25.

The scheme, which was launched in 2021, has an overall incentive outlay of Rs 1.97 lakh crore.

“It is pertinent to note that the total allocation under all 14 PLI Schemes is Rs 1.97 lakh crore, the total allocation over the last two years is around Rs 10,845 crore, which is a little over 5% of the total allocation.  Given that these Schemes shall be operational for a period of five to six years, it indicates that a majority of the demand for incentives under PLI Schemes shall be raised in the latter half of the life-cycle of respected Schemes,” Malhotra further noted.

The scheme aims to encourage the setting up of manufacturing facilities in the country as well as the creation of jobs in line with the government’s vision of Make in India and Aatmanirbhar Bharat.

Experts also highlighted that the Interim Budget did not extend the concessional corporate tax regime for new manufacturing facilities that is set to come to an end on March 31, 2024.

“As part of the Make in India initiative, concessional tax rate is available to companies commencing manufacturing up to March 31, 2024.  It was highly expected that this date would be extended in the Interim Budget.  The Finance Bill, 2024 does not extend this date – this could be a big concern for Make In India initiative and governments aim to make India a manufacturing hub,” said Lokesh Shah, Partner, INDUSLAW, adding that all eyes are now on full Union Budget 2024 likely to be announced in July 2024.

To boost domestic manufacturing, the government had offered a 15% corporate tax rate to such units that commence operations by March 2024. The facility was available till March 31, 2023 originally but was extended by a year by the finance minister in the Union Budget 2023-24. Industry had been hoping for a further extension in this Budget.