PLI SCHEME (Syllabus: GS Paper 3 – Economy)

News-CRUX-10     6th October 2023        

Context: Recently, Asandas and Sons, a major frozen foods exporter in India, filed a case in the Delhi High Court against the central government regarding the Rs 10,900-crore production-linked incentives (PLI) scheme for food processing industries.

Production-Linked Incentives (PLI) Scheme

  • About: PLI scheme is an initiative that provides incentives to domestic industries to boost local production.
  • Through this scheme the Government aims to give companies incentives on incremental sales from products manufactured in domestic units.
  • PLI has been introduced to boost domestic manufacturing and cut down on import bills.
  • Eligibility: A company registered in India that proposes to produce items related to the Target Segments there and submits an application for approval under the Scheme is an applicant for the purposes of the Production Linked Incentives Scheme. 

oThe applicant is permitted to run either brand-new or current production facilities to produce goods for the Target Segments.

  • Sectors Included: Automobile and auto components, electronics and IT hardware, telecom, pharmaceuticals, solar modules, metals and mining, textiles and apparel, white goods, drones, and advanced chemistry cell batteries.
  • Incentives Under the Scheme: The incentives, calculated on the basis of incremental sales, range from as low as 1% for the electronics and technology products to as high as 20% for the manufacturing of critical key starting drugs and certain drug intermediaries.

oIn some sectors such as advanced chemistry cell batteries, textile products and the drone industry, the incentive to be given will be calculated on the basis of sales, performance and local value addition done over the period of five years.