Empowering “Atmanirbhar Bharat” – Enhancements to the PLI Scheme for White Goods

India’s journey towards becoming self-reliant in manufacturing has been marked by a series of visionary steps, with the latest being a pivotal upgrade to the Production Linked Incentive (PLI) Scheme for White Goods. This scheme, aimed at encouraging the production of components and sub-assemblies for Air Conditioners (ACs) and LED Lights, has witnessed further refinements based on inputs from beneficiaries and industry associations. These amendments not only simplify the scheme but also bolster the ease of doing business in India.

The PLI Scheme Unveiled

The PLI Scheme for White Goods was greenlit by the Union Cabinet, chaired by Prime Minister Narendra Modi, on April 7, 2021. This forward-looking initiative underscores the government’s commitment to promoting domestic manufacturing, job creation, and reducing reliance on imports. It’s designed to operate over a seven-year period, from FY 2021-22 to FY 2028-29, with a substantial outlay of Rs 6,238 crore. Notably, the Department for Promotion of Industry and Internal Trade (DPIIT) notified the scheme on April 16, 2021, and the scheme guidelines were published on June 4, 2021.

Progress in the PLI Scheme

The scheme has already taken root and is progressively moving ahead. Out of the 64 selected beneficiaries, 15 have opted for a gestation period up to March 31, 2022, and have commenced commercial production. The remaining beneficiaries, who have opted for a gestation period up to March 31, 2023, are actively engaged at various stages of implementation. This progress underlines the scheme’s effectiveness in stimulating industrial activity and fostering economic growth.

Key Enhancements in the Scheme

The PLI Scheme for White Goods has undergone significant transformations to further its objectives:

1. Adoption of Cost-Plus Method: The scheme has shifted from the comparable uncontrolled price (CUP) method to the cost-plus method for calculating sales prices in cases of captive consumption or supplies to group companies. This change streamlines pricing methods and promotes clarity.

2. Inclusion of Tool Room Investments: Investments in tool rooms for manufacturing molds and dies are now considered eligible investments under Capital Investment. This alteration recognizes the importance of tool rooms in the manufacturing ecosystem.
3. Extended Reporting Period: Beneficiaries are now granted an additional year, beyond the initially stipulated two years, for informing authorities about the establishment of additional manufacturing facilities. This extension facilitates smoother expansion and growth.
4. Revision of Claim and Refund Deadline: The last date for the submission of claims and refunds for excess incentives, owing to discrepancies between statutory compliance and records provided during claim filing, has been revised. This ensures that beneficiaries have ample time to reconcile any discrepancies.
5. Site Visits: The Administrative Ministry can now conduct site visits, enabling better oversight and compliance.
6. Bank Guarantee Roll Over: The scheme allows for the rollover of bank guarantees, providing beneficiaries with financial flexibility.
7. Changes in Annexure: Various changes have been introduced in the annexures to the scheme guidelines, aligning them with the revised procedures and requirements.

Towards Self-Reliance and Global Integration

The PLI Scheme for White Goods is strategically crafted to foster a comprehensive component ecosystem for the ACs and LED Lights industry in India. It aspires to make India an integral part of global supply chains and significantly boost domestic value addition from the existing 15-20% to a remarkable 75-80%. This transformation is pivotal for the country as it strengthens the ‘Atmanirbhar Bharat’ initiative and bolsters India’s positioning in the global manufacturing landscape.

In conclusion, these enhancements to the PLI Scheme for White Goods exemplify the Indian government’s commitment to enhancing ease of business, promoting domestic manufacturing, and driving economic growth. As India continues to march towards self-reliance and global integration, schemes like this play a crucial role in shaping a brighter and more self-sustaining future for the nation.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.