Global Economy

DPIIT notifies PLI scheme for ACs, LED lights; mere assembly of finished goods not to be incentivised

The government has notified the PLI scheme for ACs and LED lights and said that the selection of companies to avail the incentives would be done to support manufacturing of components such as copper tubes, aluminium foil and compressor, LED chip packaging, resisters, ICs, and fuses.

In a notification, the Department for Promotion of Industry and Internal Trade (DPIIT) said that mere assembly of finished goods would not be incentivised and companies investing in basic/core components would get a higher priority. The Rs 6,238-crore scheme will extend an incentive of 4-6% on incremental sales and be implemented from FY22 to FY29.

“Mere assembly of finished goods shall not be incentivised. 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,” the DPIIT said in the notification.

For AC components, the large minimum cumulative incremental investment is Rs 150 crore while normal minimum cumulative incremental investment is Rs 50 crore. For LED lights core components, the minimum cumulative incremental investment is Rs 100 crore for large investments and Rs 20 crore for normal investments.

Earlier this month, the government approved a PLI scheme for white goods- Air Conditioners and LED Lights.

The Production Linked Incentive Scheme for White Goods (PLIWG) proposes a financial incentive to boost domestic manufacturing and attract large investments in the White Goods manufacturing value chain. Its prime objectives include removing sectoral disabilities, creating economies of scale, enhancing exports, creating a robust component ecosystem and employment generation.

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As per the notification, an Empowered Group of Secretaries chaired by 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 group will be empowered to make any changes in the modalities of the scheme within the overall financial outlay of Rs 6,238 crore. It said that the incentive per beneficiary will be applicable on incremental sales (net of taxes) of manufactured goods (as distinct from traded goods) over the base year (2019-20) subject to ceilings.

Enlisting the eligibility criteria to avail the benefits under the PLI scheme, the notification said incentives would be provided to companies making brownfield (existing facility) or greenfield (new) investments for the manufacturing.

“One entity may apply for one target segment only. However, separate group companies may apply for different target segments. Further, sales by entities to their group companies should be at an arm’s length price as those to outside group companies,” it added.

The applicant will have to fulfill 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.


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