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Recently, the Union Cabinet has approved two Production-Linked Incentive (PLI) Schemes for White Goods and Solar Photovoltaic Modules. In this article, we will cover all the major points of these two PLI schemes. We will discuss the background of the Production-Linked Incentive (PLI) scheme.
Table of Contents
PLI Scheme for White Goods
The Union Cabinet chaired by PM Modi approved the PLI Scheme for White Goods (Air Conditioners & LEDs). This scheme is another step towards the vision of “Atmanirbhar Bharat”. The scheme has a budgetary outlay of Rs. 6,238 crore.
Before going into the details of this scheme, let’s understand what are white goods.
White Goods are Large home appliances such as refrigerators, washing machines, air conditioners etc. Traditionally, the household goods were available in white colour so they got the name ‘white goods’.
Objective
- To make manufacturing in India globally competitive by removing sectoral disabilities, creating economies of scale, and ensuring efficiencies.
- To create a complete component ecosystem in India and make India an integral part of the global supply chains.
- The scheme will attract global investments, generate large-scale employment opportunities and enhance exports substantially.
Key Points of PLI Scheme for White Goods
- It will extend an incentive of 4% to 6% to the companies manufacturing Air Conditioners and LED lights.
- Moreover, this is a pan-India scheme.
- Different segments are designated for different types of components. Thus it will help to target global investments into desired areas.
- Global and domestic companies, including a number of MSMEs are likely to benefit from the Scheme.
- It will also lead to investments in innovation and research and development and upgradation of technology.
PLI Scheme for White Goods: Benefits
Over the period of five years, the PLI Scheme is expected to show the following benefits:
- As per estimates, the scheme will help to facilitate additional investments of Rs 7,920 crores.
- The scheme is expected to increase production worth Rs 1,68,000 crores and exports worth Rs 64,000 crores.
- It will create additional four lakh direct and indirect employment opportunities.
Now let’s move to the PLI Scheme for Solar PV Modules.
PLI Scheme for Solar PV Modules
The Union Cabinet recently approved the PLI Scheme called the “National Programme on High-Efficiency Solar PV Modules”. The total estimated outlay of the scheme is Rs 4,500 crores. The scheme will support the Atmanirbhar Bharat initiative.
National Programme on High Efficiency Solar PV Modules: Highlights
- Aim: The programme aims to achieve manufacturing capacity in Giga Watt scale in high efficiency solar PV modules.
- The National Programme on High Efficiency Solar PV Modules will reduce import dependence in a strategic sector like electricity.
- Solar PV manufacturers will be selected through a transparent competitive bidding process.
- Post commissioning of solar PV manufacturing plants, PLI will be given for 5 years. The PLI will be on sales of these solar PV modules.
- The scheme will reward manufacturers with higher efficiencies of solar Photovoltaic modules.
- Also, there will be incentive for sourcing their material from the domestic markets.
Significance of National Programme on High Efficiency Solar PV Modules
- It aims to bring an additional 10,000 MW capacity of integrated solar PV manufacturing units in India.
- The program will bring in a direct investment of Rs 17,200 crores in solar Photovoltaic manufacturing projects.
- It will also bring a demand of Rs.17,500 crore over 5 years for ‘Balance of Materials’
- It will generate indirect employment of 1,20,00 and direct employment of 30,000.
- The scheme will stimulate research and development that will achieve higher efficiency in solar PV modules.
Production Linked Incentive (PLI) Scheme: Background
The government announced the PLI scheme in March 2020. The aim is to boost domestic manufacturing and cut down import bills.
- It aims to give companies incentives on incremental sales from products manufactured in domestic units.
- The scheme invites foreign companies to set shop in India. However, it also encourages local companies to set up or expand existing manufacturing units.
- It was launched for the Large Scale Electronics Manufacturing sector in April 2020.
- The scheme was introduced for 10 other sectors towards the end of 2020. t It includes food processing, telecom, electronics, textiles, specialty steel, automobiles, solar photovoltaic modules and white goods.
- In the Union Budget 2021, Nirmala Sitharaman mentioned the inclusion of 13 more sectors under the PLI Scheme. The amount allocated for this scheme is Rs. 1.97 lakh crores.
Conclusion
With this, we come to the end of our article. We have covered the two PLI Schemes for white goods and solar photovoltaic modules in great detail. Additionally, we have also discussed the background of PLI Schemes.
Hope you find this article informative and interesting.
We will be back with another such article soon. Till then, have a look at our previous article on Tribal Health Collaborative- ‘Anamaya’
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