Estimated disbursement of ₹ 1.46 crore planned over the next five years.
On Wednesday, the government unveiled a production-linked incentive scheme to encourage domestic manufacturing investment in ten more sectors, with an estimated outlay of about Rs 1.46 crore over the next five years.
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The ten sectors, which Finance Minister Nirmala Sitharaman said had been identified on the basis of their potential to create jobs and make India self-sufficient, include food processing, telecommunications, electronics, textiles, specialty steels, automobiles. and automobile components, photovoltaic voltaic modules and electrical appliances such as air conditioners and LEDs.
Previously, the government had announced an incentive plan or PLI linked to production for specific medical devices, mobile phones and active pharmaceutical ingredients, with a proposed outlay of Rs 51,311 crore. Now, several more pharmaceuticals have been listed under the auspices of the PLI scheme, including complex generics, anticancer and diabetic drugs, in vitro diagnostic devices, and special empty capsules.
“We have decided to introduce one more PLI like the one previously announced and got a good response [from investors and producers]. The selection of sectors has been based on job creation, [linkages with] the global value chain, the sunrise sectors and the broader principle of self-sufficient India, ”Sitharaman said, emphasizing that the Cabinet’s decision should be seen as a clear sign that India is not becoming protectionist.
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“This should answer the question ‘¿ Atma Nirbharta does it mean to look inward? No way. We are proving it once again, even at PLI, we want to take advantage of our strengths and link with the global value chain ”, he said.
While the minister and other cabinet ministers set the estimated cost of the PLI scheme at ₹ 2 lakh crore, an official cabinet statement placed the figure at ₹ 1.45,980 crore, with most of the more than ₹ 57,000 crore allocated for automobiles and auto parts production.
The finance minister said that the individual ministries in charge of these sectors are ready to implement the scheme immediately. Applications to take advantage of the benefits will be reviewed by an Empowered Finance Committee, after which they will be taken to Cabinet for final approval. A window has also been kept open for new sectors to be included in the PLI scheme after obtaining new approval from the Cabinet.
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“The PLI scheme in these 10 specific key sectors will make Indian manufacturers globally competitive, attract investment in core competence areas and cutting edge technology; ensure efficiencies; create economies of scale; enhance exports and make India an integral part of the global supply chain, ”the statement said.
The Automotive Component Manufacturers Association of India expressed their hope that the high outlay for the sector under the PLI will encourage the industry to become a net exporter and help reduce dependence on imports. “We look forward to the detailed outlines of the scheme. Although the industry exports more than 25% of its production, our ambition is to capture a significant proportion of world trade, ”said the association’s president, Deepak Jain.
Industry chambers welcomed the move and called for similar ideas to help more sectors of the economy. “The sectors covered by the PLI scheme are strategic, technology-intensive and also important from the perspective of job creation in the country. We also look forward to hearing about these progressive schemes for more sectors, ”said Sangita Reddy, President of the Federation of Chambers of Commerce and Industry of India (FICCI).
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