Cabinet approves production incentive scheme for white goods

New Delhi: In an important decision in line with the vision of ‘Self-reliant India’, the Union Cabinet chaired by the Prime Minister Shri Narendra Modi has budgeted allocation of Rs 6,238 crores with production related incentives for white goods (air conditioners and LED lights). The plan (PLI) is approved. The major objective of the PLI scheme is to make manufacturing in India globally competitive by removing sector-based inefficiencies, building a large-scale economy and ensuring efficiency. Its design is designed keeping in mind the complete eco-system of equipment and components in India, so that India can be made an important part of the global supply-chain. The scheme is expected to attract global investment, generate large-scale employment opportunities and significantly increase exports.

Under the PLI scheme, companies associated with manufacturing of air conditioners and LED lights will be given incentives at incremental sales of manufactured goods in India at the rate of 4 percent to 6 percent during the next 5 years. In order to attract global investment in the desired sectors, various sectors have been identified keeping in mind the different types of components. The companies for the scheme will be selected on the basis of encouraging the manufacture of components or subassembling of equipment, equipment that is not currently being manufactured to full capacity in India. There will be no incentive to just assemble the finished items.

Companies meeting the pre-eligibility criteria for various target areas will be considered eligible to participate in the scheme. Companies investing brown field and green field will also be considered eligible for the incentive scheme. In order to claim incentives, the condition of incremental investment and incremental sales in respect of goods manufactured on the base year has to be met.

A company availing any other PLI scheme of the Government of India will not be considered eligible under the scheme in respect of similar products, but the company can avail the benefit of other schemes of the Government of India or the State Governments. The scheme will be implemented in the entire country and no place, area or population has been taken into consideration for this. Various companies in the country and abroad, including MSME companies, are likely to benefit from this scheme.

The scheme is expected to play a major role in achieving high growth rates in the AC and LED light industry, developing a complete eco-system of ancillary components in India, and building global companies in the manufacturing sector in India. . These companies must meet mandatory BIS and BEE standards for sales in the domestic market and applicable standards in global markets. This scheme will help in investment in research, development and innovation and in upgrading technology.

It is estimated that the PLI scheme will generate an incremental investment of Rs 7,920 crore during the next 5 years; There will be incremental production of Rs 1,68,000 crore, exports of goods worth Rs 64,400 crore; There will be direct and indirect revenue of Rs 49,300 crore and 4 lakh direct and indirect employment opportunities will be created.

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